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U.S. Jobless Claims Remain Low Following Prior Week’s Plunge

Wall St. heads for mixed start, eyes GDP, short-selling

EconomyJan 28, 2021 08:16AM ET
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2/2 © Reuters. A man wearing a mask, following the coronavirus disease (COVID-19) outbreak, stands on an overpass with an electronic board showing Shanghai and Shenzhen stock indexes, at the Lujiazui financial district in Shanghai 2/2

By Huw Jones

LONDON (Reuters) - Wall Street headed for mixed start on Thursday with investors preparing for the latest snapshot of economic growth and any signs that a big squeeze in shorted stocks has more to run.

Dow E-minis were up 52 points, or 0.19%, S&P 500 E-minis were off 5 points, or 0.12%. Nasdaq 100 E-minis were off 50 points, or 0.5%.

U.S. shares saw their sharpest falls in three months on Wednesday amid a squeeze on hedge funds holding short positions in stocks like GameStop (NYSE:GME) that are being targetted by an army of retail buyers.

Investors were seeking refuge in U.S. dollar, with its index up at 90.72 from a January low of 89.206. Yields on the 10-year U.S. Treasury bond were flat. [US/]

The market "smells a bit of blood", but it was unclear how far the squeeze has to go, said Ned Rumpeltin, European head of currency strategy at TD Securities. "It does feel like markets are trying to find a bit of a floor here," he said.

The wait during Wednesday for a statement from the U.S. Federal Reserve probably kept some investors on the sidelines, but they would be freer to join in on Thursday, Rumpeltin said.

"What happens as we head into the weekend? All these retail investors have some spectacular gains on paper - will they be induced to cut and run and take profits?"

The Commerce Department's snapshot at 1330 GMT of fourth- quarter gross domestic product in the United States is expected to show the recovery from the pandemic losing steam as 2020 came to a close.

U.S. jobless claims for the latest week were also due at 1330 GMT.

Earnings are due from American Airlines (NASDAQ:AAL), Mastercard (NYSE:MA), Macdonalds, Dow Chemicals, JetBlue Airways (NASDAQ:JBLU), Amazon (NASDAQ:AMZN), Mondelez (NASDAQ:MDLZ), and Visa (NYSE:V).

Southwest Airlines (NYSE:LUV) Co's shares fell in pre-trading after it reported an annual loss of $3.1 billion, its first since 1972 as the pandemic stalled demand.

BACK TO SQUARE ONE

European shares wiped out their gains in Europe for the year, soured by Wednesday's sell-off on Wall Street, no end in sight to pandemic lockdowns and the squeeze in short positions.

The pan-European STOXX benchmark was down 0.5% at 400.9 points, after hitting its lowest point since December. London, Paris and Frankfurt were flat to lower.

"The initial optimism of early this year is starting to dissipate because of the prospects of tighter pandemic restrictions for longer, and concerns over 'vaccine nationalism'," said Michael Hewson, chief market analyst at CMC Markets.

The European Union, locked in a public spat with vaccine producer AstraZeneca (NASDAQ:AZN), wants a shortfall in the company's supplies to the bloc topped up from production in Britain.

"We could see much more choppiness and much more volatility. We have a bit of a perfect storm heading into the month end, which is weighing on equity markets, but I don't think at the moment we are in a place where it's going to come crashing off," Hewson said.

Asian shares slid on Thursday while the safe-haven dollar rallied as Wall Street's sell-off and delays in coronavirus vaccines provided an excuse to book profits on recent gains.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 2%, with valuations looking stretched after the index rose more than 6% just this month.

The euro eased to $1.2102 amid reports the European Central Bank felt markets were under-pricing the risk of more rate cuts.

The bounce in the dollar kept gold prices soft around $1,840 an ounce. [GOL/]

Global demand concerns restrained oil prices despite a drop in U.S. crude stocks. U.S. crude fell 15 cents to $52.71 a barrel. Brent crude futures dropped to $55.74. [O/R]

 

Wall St. heads for mixed start, eyes GDP, short-selling
 

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Comments (17)
Neta Goldberg
Neta Goldberg Jan 28, 2021 3:40PM ET
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Levi & Korsinsky, LLP, National Class Action Law Firm, Announces Class Action Investigation Against Robinhood and other Brokers on Behalf of Investors of KOSS, EXPR, NAKD, and other stocks Who Were Prevented from Trading.
Ell Skware
Ell Skware Jan 28, 2021 10:54AM ET
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When the fat cats were stuffing their faces with profits that were not theirs to take there was hardly any of the usual "BS news narrative" - why not? because there isn't much any one can cover that muck up with. There was no catalyst for the fall- the greedy ******* saw the stock market thriving and thought lets take it all and leave the rest of them some scraps. I haven't been hurt financially by this but it is so blatant and shameless without any effort to hide.  Love what's going on at wall st bets. Part of the revolution- we all don't play the game for a week- see how they do then- they need us for this to work.
John Kelley
John Kelley Jan 28, 2021 8:31AM ET
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💎 👐
Chris Sundo
Chris Sundo Jan 28, 2021 6:47AM ET
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Lets hope for a black swan event during the short seller battle. I'm buying high short float stocks to do my part in the battle. Lets hope prices end up at the other end of the range, maybe Friday or Monday a confirmation low
Daniel Lu
Daniel Lu Jan 28, 2021 1:21AM ET
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This is also a decent opportunity for the empty-handed investors to buy at dip
Mike Chen
Mike Chen Jan 28, 2021 12:44AM ET
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The polar bear has awaken. It is gonna stay for a few years
Js My
Moorok Jan 28, 2021 12:23AM ET
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Load up SKT. This is starting soon! Over 200%+ short float if you account institution holders. Plenty to short squeeze
Chris Sundo
Chris Sundo Jan 28, 2021 12:23AM ET
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Ok. I'm in an Open Buy Order for SKT at 18.33, a floor level, slightly above yesterday's close. My money is placed - For better or for worse .. You can hear my lasso whirring through the air ??
Jo Pa
Jo Pa Jan 28, 2021 12:01AM ET
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Look up high short float stocks and buy them. Squeeze the hedge funds!
Jay West
Jay West Jan 27, 2021 11:21PM ET
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I say this could be the biggest money washing operation going on right in front of our eyes. With all the strange things going on this year and big government and central banks grabbing money, I would not be surprised if this was a prearranged deal among the elites from different country‘s leaderships closing election deal favors. They script it so it seems retail robinhoods are taking down the giant. Sure they are making some money, but very interesting timing with the election and all, ya know? Just food for thought.
Don Blade
Don Blade Jan 27, 2021 11:21PM ET
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I agree retail investors( such as myself) could NOT have the power like this monster funds.. I am sure they had a impact and a STRONG CULT following, but someone helped out!! like you said!! A huge organization silently made a big move and enforced their $$$$ WILL on Mr.Andrew(sure he had it from what i read he was saying for months he was gonna slam GME).. what  a ride.. hel
Dustin Berg
Dustin Berg Jan 27, 2021 11:13PM ET
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amc and nok just getting started.
Jay West
Jay West Jan 27, 2021 10:35PM ET
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Short squeezes all over the board in heavily shorted stocks today. Not just GME and AMC. Market must have equilibrium. Money was pulled from entire market to create multiple squeezes. Other money was pulled to cover shorts. Tons of liquid sitting on the sidelines ready to flood market when conditions are right (within next 4 days). They will let panicking retail sell their shares so they can get them for cheap. Calls will be loaded. Then markets will be pushed up so they can start collecting FAT premiums.
Chris Sundo
Chris Sundo Jan 27, 2021 10:33PM ET
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Could be a 3 wave move, with wave 3 just starting. Action was a bearish 'W' today. $INDU already below its 20 dma and aiming for its 50 dma
Wat The
WhatThe Jan 27, 2021 10:18PM ET
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Funny how the minute a cohort of retail investors make money; suddenly there's talk of regulations. I bet the optics would be: We need to regulate you; it's for your own good.
Lalit Mahajan
Lalit Mahajan Jan 27, 2021 10:18PM ET
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You are right. Rules are for small traders
Jay West
Jay West Jan 27, 2021 9:51PM ET
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Time to load leaps calls on solid companies: PYPL DIS BA COST. Selloff may finish the week. Or a dip at open followed by a huge bounce. Check the futures at 730-800am ET.
The Chad Bull
The Chad Bull Jan 27, 2021 9:31PM ET
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Perfect dip buying opportunity I am going all in on full margin and buying AMC tomorrow
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Jay West
Jay West Jan 27, 2021 9:31PM ET
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If you are serious, please rethink it unless you have much wealth outside of your account. AMC may very well drop 50%+ tomorrow. Good luck.
Stacy Starner
Stacy Starner Jan 27, 2021 9:31PM ET
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Love it lets get it. Burn them hedge funds
Joel Schwartz
Joel Schwartz Jan 27, 2021 9:31PM ET
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AMC is a trap stock to pull investors from GME. Bet on it.
Nunya Business
Nunya Jan 27, 2021 9:31PM ET
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somehow I think he is being sarcastic. for his sake I hope so. but thats his money and in the end of the day, it will be him owning shares of worthless stock.
Jay West
Jay West Jan 27, 2021 9:31PM ET
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Joel Schwartz I can see this.
Casino Crypt
CasinoCrypt Jan 27, 2021 9:30PM ET
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"There was no obvious trigger for the rout, rather many seemed to have rushed for the exits at the same moment in a market that had been priced for perfection.".  Lets bet on anything because reality doesn't matter anymore. Amazing that Gold also tanks with so much political and economic volatility.  . Scary times.
Joel Schwartz
Joel Schwartz Jan 27, 2021 9:12PM ET
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“Investors finally realize bubble is bubble.”
 
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