Oil prices strongly up: Gamestop share continues to lose ground

Tuesday, February 02, 2021

Oil prices up strongly
Gamestop shares continue to lose ground

The recovery on Wall Street continues thanks to strong quarterly results. The "gamestop rush" seems to have evaporated. The share, which is hyped by private investors, continues to drop.

The recovery rally on Wall Street has continued – at a slightly increased pace. With this, a large part of the taxes from the previous week was made up again. Above all, convincing quarterly figures of important US companies and falling coronavirus case numbers gave investors courage again, it said. In addition, there is hope for a further aid package from the US government, even if a meeting of the new US President Joe Biden with senators from the opposition Republicans did not bring about a breakthrough. However, there should be further discussions.

The prices of the stocks, most recently Gamestop, which had recently been massively boosted in the competition between hedge funds and private investors, were under selling pressure. After a loss of almost 31 percent on Monday, they have now fallen 60 percent. With Blackberry (-21 percent) and AMC Entertainment (-41.2 percent), two other titles that have been celebrated on the Redditt Internet platform and have recently risen sharply were sold. Traders spoke of a further normalization.

"There were fears that the 'gamestop frenzy' would spill over into the broader marketplace. It doesn't appear to have been," said Michael Reynolds, investment strategy officer at Glenmede Trust.

The silver price, which was also recently fueled by speculative investors, also came back. After rising to over $ 30 an ounce, it has now fallen back to $ 26.45. The Chicago Stock Exchange has also increased requirements for trading silver futures contracts following the recent volatility. Craig Erlam, Senior Market Analyst at Oanda, spoke of a "reality check" on the silver price.

The Dow Jones Index increased by 1.6 percent to 30,687 points. The S&P 500 climbed 1.4 percent to 3,826 points. For the tech-savvy Nasdaq Composite it went up 1.6 percent to 13,613 points.

Alibaba and Pfizer with strong business figures

The focus was again on the quarterly reports of the companies. Even before the starting bell had among other things United Parcel Service (UPS), Pfizer, Exxon Mobil and Alibaba presented their business figures. After the end of trading, the technology heavyweights Alphabet and Amazon as well as the biotechnology company Amgen will follow.

Despite the Corona crisis, the last calendar quarter of 2020, which companies are currently reporting on, mostly went better than feared. Of the 189 companies from the S&P 500-Index, which published figures by Monday evening, exceeded analysts' expectations by 81 percent, according to Factset.

Today's numbers also seemed to confirm this trend. So had Alibaba Thanks to the strong online trade, profits and sales increased unexpectedly significantly in the months from October to December. The share lost 3.8 percent, but had recently gained more significantly.

The logistics company is also benefiting from the increased online trade due to the shop closings UPS with a sales increase of 21 percent in the final quarter. UPS slipped into the red due to special charges, but on an adjusted basis the company posted a profit that was well above analyst consensus. The share gained 2.6 percent.

The oil company's figures also turned out to be positive Exxon Mobil recorded. The share price rose 1.6 percent after the company also beat expectations on an adjusted basis.

Pfizer Although earned less than expected in the fourth quarter, its sales exceeded expectations and increased its annual targets for 2021. The titles fell 2.3 percent.

Dollar puts a damper on the gold price

Oil prices recorded a strong plus. You benefit from the fact that important oil-producing countries such as Saudi Arabia and Russia actually make the promised production cuts. A barrel of the US grade WTI rose 2.3 percent to $ 54.80, Brent gained 2.1 percent to $ 57.55.

On the foreign exchange market he gave Euro to the dollar again significantly and was quoted in late US trade at 1.2036 dollars near its daily low. At Monday's high, the common currency was still above $ 1.2150. Analysts pointed to the hope that the US will recover from the pandemic faster than Europe.

"The growth disparities are taking their toll on the euro and adding to the pull we are seeing for the US currency this year," said Joe Manimbo, senior market analyst at Western Union Business Solutions. "Europe could be about a year behind the US in terms of a full recovery," the participant added.

The firmer dollar, combined with a return to investor risk appetite, dampened interest gold. The troy ounce fell 1.3 percent to $ 1,836. Government bonds were also not in demand, which drove yields up further, especially at the long end of the yield curve. The ten-year return climbed 2.7 basis points to 1.10 percent.