Global stocks rise as Wall Street braces for more turbulence
Global stocks and US futures advanced Monday as Wall Street prepared for what could be another week of rocky trading fueled by small investors on Reddit. Silver futures surged as online attention shifted to the precious metal.
Dow futures were last up 177 points, or 0.6%, reversing course from a 0.8% tumble earlier. S&P 500 futures were up 0.8%, while Nasdaq futures climbed nearly 1%. European markets opened with gains, while major Asian indexes advanced.
Some investors are once again turning their attention to vaccine rollouts and a stimulus deal in the United States, chief global markets strategist at Axi, Stephen Innes, wrote in a research note Monday. “Risk is trying to regain its footing but Covid vaccine efficacy concerns and the Reddit Red Raider [are] still on investors’ minds,” he added.
US markets are coming off of their worst week since October. Investors were captivated by stock moves spurred by traders coordinating their buys on a message board called WallStreetBets. The Reddit forum sent GameStop, AMC and other heavily shorted stocks skyrocketing, roiling markets and crushing some hedge funds that had bet against the stocks.
Questions about whether President Joe Biden’s proposed $1.9 trillion stimulus package can actually get passed, along with uncertainty over the coronavirus vaccine rollout, also kept investors on edge. “The good thing is that most market forecast anticipates a smaller package that happens sooner,” said Innes.
Global markets moved higher on Monday. London’s FTSE 100 gained 0.6% in early morning trade. Germany’s DAX was 1.1% higher, while France’s CAC 40 was up 0.9%. Hong Kong’s Hang Seng finished 2.2% higher, while South Korea’s Kospi rose 2.7%. Japan’s Nikkei gained 1.6% and Australia’s S&P/ASX 200 added 0.8%.
China’s Shanghai Composite added 0.6%. The country’s manufacturing activity expanded in January, a closely watched private survey showed Monday — albeit at the slowest pace in seven months. Recent survey data from the Chinese government showed similar slow growth in manufacturing and services activity. It’s a sign that fresh coronavirus outbreaks in the country may be hampering the recovery of the world’s second largest economy, though not derailing it entirely.
Meanwhile, there were signs of Redditors targeting precious metals. Silver futures surged as much as 8.5% to above $29 late Sunday, touching five-month highs. That follows a 6% rally last week.
Retail sites warned customers over the weekend they could not meet skyrocketing demand for silver bars and coins. And “#silversqueeze” is trending on Twitter.
Silver producers jumped in Asia as futures for the precious metal surged. China Silver Group soared nearly 30% in Hong Kong, for example. Chinese silver futures also jumped nearly 9% in Shanghai.
— Anneken Tappe and Matt Egan contributed to this report.
