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Yellen to Meet Regulators, Jobless Claims, Earnings Galore - What's up in Markets

EconomyFeb 04, 2021 06:47AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. regulators may huddle to discuss the retail stock frenzy of recent days, a deluge of earnings starts with Merck and BMS and ends with Peloton (NASDAQ:PTON) and Ford, weekly jobless claims are due and the dollar hits a two-month high on brighter prospects for the U.S. economy. Here’s what you need to know in financial markets on Thursday, February 4th.

1. Yellen to meet with regulators on trading frenzy

Treasury Secretary Janet Yellen may meet with U.S. financial regulators to discuss the implications of the frenzied trading in a handful of heavily-shorted stocks over the last couple of weeks.

The meeting, called on Tuesday, will be attended by the heads of the Securities and Exchange Commission, the Federal Reserve, the Federal Reserve Bank of New York and the Commodity Futures Trading Commission, according to Reuters. It still isn't clear exactly when the meeting will start.

The meeting comes after heavy losses in stocks such as GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC), which are down more than 50% from last week’s highs. 

Yellen has sought and received permission from ethics lawyers to chair the meeting, in the light of her accepting $700,000 in speaking fees from Citadel in the past. Citadel is one of the hedge funds at the heart of the ongoing battle between retail traders and Wall Street hedge funds, and has an extensive trading relationship with online brokerage Robinhood, which routes its orders through Citadel.

2. Dollar hits two-month high on U.S. growth prospects

The dollar hit its highest level in two months as a brightening outlook for the U.S. economy pushed bond yields higher.

The dollar gained most against the euro, which fell below $1.20 on perceptions that the two regions’ rollout of vaccines and the extent of their lockdowns both point to U.S. outperformance in the next couple of months.

The greenback was also higher against sterling, which trimmed gains ahead of the Bank of England’s monetary policy committee meeting. The BoE wasn’t expected to change policy, meaning that the market’s main focus will be on what the MPC has to say about the likelihood of negative interest rates this year.

3. Wall Street set to drift higher; jobless claims eyed

U.S. stock markets are set to drift higher at opening ahead of Yellen’s meeting with regulators, with the initial focus likely to be on jobless claims data at 8:30 AM ET (1430 GMT).

The numbers will be a more up-to-the minute snapshot of the labor market than ADP’s much stronger-than-expected private-sector hiring report for January, which only runs through the middle of the month.  Analysts expect a drop in initial jobless claims to 830,000, which would be the lowest number in a month. Durable goods orders for December and data on unit labor costs and productivity are also due.

By 6:35 AM ET, Dow Jones Futures were up 29 points, or 0.1%, while S&P 500 Futures and NASDAQ Futures were up by a similar amount.

4. Earnings torrent due; Qualcomm (NASDAQ:QCOM) disappoints, PayPal cheers

It’s another heavy day for earnings, with Merck and Bristol-Myers Squibb leading the charge early, along with Becton Dickinson and AmerisourceBergen, Cigna, Air Products and InterContinental Exchange Group. Tapestry and Ralph Lauren add a dash of style to the mix.

The lineup after the close is just as heavy, with T-Mobile, Gilead, Ford Motor, Activision Blizzard and Peloton Interactive leading a cast of thousands.

PayPal and Qualcomm presented starkly differing reports late on Wednesday, with the chipmaker set to open down 6.7% after missing on revenue expectations,  and the payments firm up over 5% in premarket after a handsome beat.

5. Oil struggles with resistance after OPEC meeting; 

Oil prices continued to test new highs overnight without actually breaking through, in the wake of an OPEC meeting that delivered no surprises on output policy.

By 6:40 AM ET, U.S. Crude futures were up 0.8% at $56.83 a barrel, while Brent crude futures were up 0.3% at $58.84.  

Overnight, Anglo-Dutch major Royal Dutch Shell reported a heavy net loss for the year and a further rise in its gearing ratio in the fourth quarter, but that didn’t stop it from saying it expected to raise its dividend again in the first quarter of this year. The company is also nearing the point where its net debt is low enough to trigger a new policy on shareholder returns.

Yellen to Meet Regulators, Jobless Claims, Earnings Galore - What's up in Markets
 

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Comments (11)
Mark Henline
Mark Henline Feb 04, 2021 6:45PM ET
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need to make hedge fund 1 trillion margin per contract.. and fed stop fraud liquidity.little guy set to 1 dollar margin per contract. now you have achieved equality
Eudon Hickey
Eudon Hickey Feb 04, 2021 11:48AM ET
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Yellen will pick the side of the fund managers, as she is just as crooked as then
Rick Baier
Rick Baier Feb 04, 2021 10:05AM ET
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Yellen, 75 years old how about step out of the way and retire already to help bring these numbers down. The greed of these people is infuriating
DrFunkenstein hayson
DrFunkenstein hayson Feb 04, 2021 8:06AM ET
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the problem isn't the retail investor that's a bunch of bs nonsense. the problem is with the people rigging the system, it's not Capitalism and it's not a free market. too much regulation too much govt end the fed!!!
Alan West
Alan West Feb 04, 2021 8:06AM ET
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Without the Fed it would be unregulated mayhem. Like the late 1800’s. Crashes every few years.
DrFunkenstein hayson
DrFunkenstein hayson Feb 04, 2021 8:00AM ET
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I think is time for us to stop participating in this rigged fraud system the corruption is out of hand.
DrFunkenstein hayson
DrFunkenstein hayson Feb 04, 2021 7:58AM ET
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what a fraud. so the person resonating for "regulations" is owned by the same people that are rigging the system and changing the rules only to benefit them. complete ********
Jelly Fish
Jelly Fish Feb 04, 2021 7:52AM ET
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Yellen received $810k from citadel, not $700k. And a total of $7.2mm in the last 2 years from big banks and big corps. She is a fraud, bought and paid for.
Rolling Home RV Rentals
Rolling Home RV Rentals Feb 04, 2021 7:26AM ET
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Nothing's going to happen to the banks, this chick is bought and paid for.. agent of the system. 👎
Casador Del Oso
Casador Del Oso Feb 04, 2021 7:07AM ET
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Only retail investors will be regulated. Expect more social media censorship.
Edouard Gluck
Edouard Gluck Feb 04, 2021 7:07AM ET
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Not at all: just expect minimum amounts to open accounts and thst is a huge maybe. Ultimately this will all regulate itself once the forces behind these retail investors are eliminated = actually having to pay rent again when moratoriums are lifted in the U.S., colleges are open again = the student loan money cant be used to buy stocks, No stimulus checks = to buy stocks etc, professional sports = distraction. This was just a case of young people trading an xbox for a robinhood account, being sold lies they could have a seat at the table, and its just not so. There were risks they should have never been allowed to take all driven by the pandemic. It will be resolved herr shortly- no pun intended
Edouard Gluck
Edouard Gluck Feb 04, 2021 7:07AM ET
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Edouard Gluck caveat: when i mean minimum amounts I mean like 10, maybe even 15K for a basic trading account. Im good with that. The stock market isnt a right, its a privelege and you have to earn the cheese before demanding wine
joninge kvamme
joninge kvamme Feb 04, 2021 7:07AM ET
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Stockmarket select the ones who can and the ones who can not. No need to regulate.
Nordic Fire
Nordic Fire Feb 04, 2021 7:07AM ET
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Funny how even wallstreet thinks all retail investors are just poor people who cant afford it with bad or no jobs. Its like they know they have all the countrys wealth through welfare for the rich
joninge kvamme
joninge kvamme Feb 04, 2021 7:01AM ET
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Regulate tradingfrenzy ?? Why. They did not regulate the shortingfrenzy. Prime minister in norway say....buy stocks it is good for you. Is she wrong ? Playing bingo is a better thing ?
Nordic Fire
Nordic Fire Feb 04, 2021 7:01AM ET
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And regulating retail wont stop foreign countries from blowing out the market all at once next time. Imagine enemies of the countey hit all 10 of the extreme overshoetrd stocks at once
Kirill Vasili
Kirill Vasili Feb 04, 2021 6:56AM ET
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Crooked woman.
 
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