Friday, January 29, 2021
What About GameStop?
The surge in GameStop and other highly shorted stocks has taken the country’s imagination by storm. These parabolic moves probably don’t reflect an overall unhealthy market, but institutions covering shorts at sizable losses may be removing capital from some big cap names. Is this a sign of a broader market bubble? Find out more in the LPL Research Blog.
Up and down week for stocks with retail trades in focus
- US stocks opened lower today after Thursday’s strong rebound.
- European markets are firmly lower in midday trading.
- Asian stocks sold off overnight with Korea underperforming.
US economic growth moderated in Q4 2020
The high-water mark and holiday surge in COVID-19 cases weighed on US gross domestic product (GDP) growth in the fourth quarter, but the US economy was able to avoid a double-dip like Europe. We look at what’s in store for the economy in the first quarter of 2021 in today’s LPL Research blog.
Stocks attempted to bounce back on Thursday but closed well off session highs. The S&P 500 Index gained 1%, holding above support from the January 15 lows at 3749. However, the Russell 2000 Index lost ground, and breadth was poor for such a strong headline gain, as advancers outnumbered decliners by less than 2:1 on the NYSE.
The United States reported 165,000 new COVID-19 cases Thursday as the rate of decline is now leveling off (source: Johns Hopkins).
- New case growth in Western Europe remains bifurcated, with growth declining in the United Kingdom but trending upward in Spain and France.
- Johnson and Johnson’s vaccine candidate produced strong protection against COVID-19 in a late-stage trial; the company will apply for emergency use authorization.
Positive Trends Send Strong Signals
This week’s Market Signals podcast discusses why positive COVID-19 news, solid small caps performance, high stock valuations, and more positive data trends are sending strong signals for 2021. Watch Market Signals: Positive Trends Send Strong Signals for 2021.
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