U.S. futures fall as GameStop Frenzy is built

Shares of GameStop rose 100% ahead of the market, after closing 44% on Thursday. AMC Entertainment advanced almost 60% ahead of the opening bell.

Robinhood Markets, a popular site for online traders, said Thursday afternoon that it would resume some stock trading it had previously held back. American Airlines rose about 10% in the market.

“The story of GameStop, where you have retail investors who are a new player in the market, [is] one that people can’t ignore, ”said Luc Filip, head of private banking investments at SYZ Private Banking.“ There are some critical links for hedge funds that don’t have these shares. ”These investors sell other long positions to close short positions that lose money, and weigh markets in general.

Stock markets hit rock bottom in January, hit by headlines over the supply of coronavirus vaccines and toughened blockade measures around the world. The Cboe volatility index, an indicator of market stress, rose 14% on Friday and rose more than 50% in January.

The earnings season continued, with major oil company Chevron and construction team giant Caterpillar scheduled to report ahead of the opening bell. Pharmaceutical company Eli Lilly and aerospace company Honeywell will also post profits early in the morning.

Skyworks Solutions,

a chip maker that Apple supplies,

rose nearly 13% in trading before trading after Thursday’s gains after hours that exceeded analysts ’estimates. His board also approved a $ 2 billion share repurchase.

Megacap tech companies slid in front of the opening bell. Apple fell 1.2%, Microsoft fell 2.1% and Google’s parent company, Alphabet, fell 1.8%.

“These hedge funds that have been affected, will have no choice but to get rid of some favorite holdings to raise these cash,” to hedge their short positions, said Seema Shah, chief strategist at Principal Global Investors, who add that you would see any other decline as a technology stock buying opportunity.

Abroad, the Stoxx Europe 600 pancontinental fell 1.2%. The relatively slow deployment of vaccines in the European Union and recent supply delays are creating concerns about prolonged blockades and burdens on markets, investors said.

Swedish telecommunications company Ericsson jumped 7.7% after posting gains above estimates and said it had gained market share. Meanwhile, Nokia‘s

shares listed in Finland increased by about 5%. The shares listed in the United States by the mobile phone company have been one of those suffered by retail investors in recent days.

In Asia, most major benchmarks declined. The Shanghai composite index fell 0.6% and the Japanese Nikkei 225 fell 1.9%. South Korea’s Kospi index retreated 3%, the biggest daily drop in five months.

In bond markets, the 10-year fixed-income yield on U.S. Treasury bonds stood at 1.071%, up from 1.055% on Thursday. The dollar strengthened, with the WSJ Dollar index rising 0.1% to its highest level in more than five weeks.

The U.S. Bureau of Economic Analysis will release the latest data on consumer spending at 8:30 a.m. ET. Economists expect it to shrink in December for the second month in a row due to the rise in virus cases, indicating a loss of momentum in the economy at the end of the year.

“We expect more prudence from the American consumer in the short term,” said Gero Jung, chief economist at Mirabaud Asset Management, who said this would affect the economic recovery, as consumer spending accounts for two-thirds of gross domestic product. gross of the United States.

Write to Anna Hirtenstein to [email protected]