As the saying goes, the market can remain irrational longer than it can remain solvent. And what’s happening now is that big players are being pushed (e.g., David who intimidates Goliath) by legions of day traders, who use services like the Robinhood investment app to increase stocks.
This is the theory proposed by Michael Batnick, research director at Ritholtz Wealth Management and author of the blog Irrelevant Investor. “These traders go from stock to stock. They squeeze all the juice until there’s nothing left and then move on to the next one, ”says Batnick.
Note this JPMorgan chart showing the shortest companies in the Russell 300 RUA,
increasing more. “I can’t prove that digital marketers are to blame, but I don’t think it takes a titanic-sized leap of faith to establish the connection,” he said.
Batnick included this viral video of a young couple sharing their investment strategy on TikTok. (If you don’t click on the link, the man says he buys stocks when they start to go up and sells when they stop doing so. In other words, momentum trading).
What’s different this time? The network effect. “This is a gigantic community now, and if we’ve learned anything over the last decade, it’s that we should take care of short-circuit networks. Here are non-monetary considerations at stake, such as membership. And fun. I mentioned are they having fun? ”says Batnick. “I don’t think these people can continue to make money forever, but this idea that ends with their demise is not something to see coming.”
The buzz
Supreme Court Chief Justice John Roberts will swear Joe Biden as the 46th president of the United States. The inauguration will be a smaller issue due to the COVID-19 pandemic, with some 200,000 flags replacing people at the national mall. Vice President Mike Pence will represent the administration that is leaving. Biden also announced a series of executive actions from the first day he will take, including the meeting of the Paris climate agreement and the World Health Organization, and the halt of construction of the US-Mexico border wall.
In one of his last acts in office, President Donald Trump pardoned 73 and commuted the sentences of 70, including former adviser Stephen Bannon, Republican fundraiser Elliott Broidy and rappers Lil Wayne and Kodak Black. From the business world, Anthony Levandowski was pardoned after stealing trade secrets from Google’s technology giant GOOG,
autonomous driving program, as did Gregory Reyes, the former executive director of Brocade Communications, who was the first to be convicted of unlawfully reversing stock options.
Any member of his family was absent from Trump’s list. Joe Exotic, the star of Netflix series Tiger King, was not forgiven either, after hiring a limousine in anticipation of being released from prison.
Netflix NFLX,
shares jumped 13% in premarket trading after the broadcast service reported 8.5 million new subscribers in the fourth quarter and said it will no longer have to finance programming with debt. Consumer Product Giant Procter & Gamble PG,
exceeded earnings estimates, such as Morgan Stanley MS,
Wall Street banks’ profit season ends.
Internet giant Alibaba BABA,
9988,
rose in Hong Kong trade after founder Jack Ma made his first public appearance, at a charity event, since his meeting with Chinese authorities over the cancellation of Ant Financial’s initial public offering.
Tesla TSLA,
increased when Oppenheimer reported raising its price target for the electric car maker to $ 1,036.
Short-selling research firm Citron Research makes a presentation to video game retailer GameStop GME,
which has doubled in price in 2021. In a tweet, Citron said GameStop buyers at this level “are a fool of this poker game.”
The markets
US stock futures ES00,
they signaled a stronger start, with the Nasdaq-100 NQ00, which was a very heavy technology,
contract at the head.
The performance of the TMUBMUSD10Y three years from the Treasury,
it was 1.10%.
The graph
Ned Davis, senior investment strategist for his eponymous research Ned Davis, says the market looks boisterous, but the rise will continue. The percentage of stocks that record weekly highs has risen, while the percentage of stocks that record new lows has remained low, he said. Historically, new highs reached a maximum of 36.5 weeks before the market arrived. He agrees that the market seems to be expanding in relation to its long-term trend. But it’s not as widespread as it was in 1929 or 2000, he says.
Random readings
The pink seesaws on the U.S.-Mexico border won a design award.
A stolen 500-year-old painting that may have been created by Leonardo da Vinci was returned to a museum, which he did not know was missing from the artwork.
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