Weekly Market Update 29 Jan 2021 – Gamestop Short Squeeze, Eurozone and Oceanic resiliency
Weekly Market Update 29 Jan 2021 – Gamestop Short Squeeze, Eurozone and Oceanic resiliency
1. Retail traders identified short squeeze opportunities against hedge funds and exchanged ideas over online communities like reddit and discord to push prices of $AMC and $GME up, with the expectation that the hedge funds which have expiring shorts will have no choice but to purchase the stocks at the market price. As market participants no longer see a one way rally with the market disruptions, the subsequent profit taking exacerbated the sharp sell-off this week
2. Eurozone data showed stronger resiliency than expected; Spain and Germany avoided contraction in the fourth quarter of 2020 with Germany reporting a sharper drop in unemployment than an expected increase. Moving forward as more economic data from the rest of the eurozone is released, we can expect similar signs of economic resiliency as well
3. Canadian GDP numbers were better than expected; with its economy growing by 0.7% in November 2020 and prices rising 1.5% On the other side of the Pacific, there was an uncommon divergence in AUD and NZD as the former sold off while the latter rallied. Despite that, the common thread is the positive economic news coming from both countries, as New Zealand showed increased consumer confidence and Australia reported higher price pressures
