Wednesday's Market Recap - The Game Stop Short Squeeze And Weak Earnings From Boeing Tanked Stocks.
- Jan 27, 2021
- 2 min read
What is The Premarket Telling Us?
8:00 AM.
A sea of red, accurately describes the status of US futures at this hour, suggesting markets could be sharply lower at the open. Dow futures are down 360 points, Nasdaq futures down 117 points, and S&P futures down 48 points. The FOMC is set to announce its decision on interest rates this afternoon. A change in interest rates is not anticipated.
On The Bond Desk:
The US 10 Year Bond Yield at
Currency Desk:
Eurodollar: 1.21
UK Pound: 1.37
Crude Oil:
WTI crude oil futures at $52.46/barrel, down 0.29%.
On the Earnings Calendar:
Microsoft reported strong quarterly earnings after the close of trading yesterday.
Boeing reported a disappointing earnings quarter, but also reported European approval for the 737 MAX to fly again.
Chipmaker AMD reported another strong quarter.
In M&A News:
None to report.
What About The Asian And European Markets?
Major Asian markets ended their day mixed. Japan (Nikkei 225) up 0.31%, Shanghai %, Hong Kong (Hang Seng) down 0.32%
Major European markets closed solidly lower today. German (DAX) down1.81%, France CAC 40 down 1.16%, London FTSE 100 1.30%.
Market And Sector Dynamics
As was indicated by the futures, markets plunged at the start of trading. The Dow fell 336 points, Nasdaq fell 195 points, and the S&P fell 49 points. WTI crude oil was off to a lower start at $52.26/barrel, down 0.68%, and the US 10 Year Bond ticked lower at 1.009%. Shares of airplane manufacturer, Boeing are lower after posting disappointing earnings, and that is weighing negatively on the Dow.
Stocks continued to fall, even lower after the opening bell, with the Dow down nearly 600 points, half an hour after the start of trading.
Not even the strong quarterly earnings results from Microsoft and chipmaker, Advanced Micro Devices could stem the negative market sentiment in today's session.
The Game Stop short squeeze phenomenon has dominated markets for the last few trading session, casting a speculative shadow over the markets. Game Stop stock is up 8000% over the last few months, far surpassing any fundamental or intrinsic valuation of the company.
Stocks gradually moved off the morning lows, recovering a third of the earlier losses, and held at that level, until late afternoon, before closing at the low of the day.
All eleven S&P sectors closed with losses in today's session, led by Communication Services, Consumer Discretionary, Healthcare, Basic Materials, Financials, Utilities, Industrials, Technology, Consumer Staples, Energy, and Real Estate.
Factors Influencing Today's Market
The Fed/FOMC left interest rates unchanged after their two-day meeting.
The Game Stop short squeeze phenomenon has cast a negative speculative shadow over the markets.
Strong quarterly earnings result from Microsoft and Advanced Micro Devices (AMD).
US 10 Year Bond Yield closed at 1.023%, down 0.99%.
WTI crude oil closed at $52.41/barrel, down 0.38%.
This week's EIA Petroleum Status Report shows US Oil inventories fell/draw of - 9.9 million barrels vs a build of 4.4 million barrels in the prior week.
Market Close Volume Traded And Advance Decline Ratio
Stocks declined sharply in today's trading. The Dow tumbled 633.87points, Nasdaq plunged 355.47 points, and the S&P sank 98.85 points. Total NYSE volume traded, a very heavy 9.8billion shares. Declining shares outpaced Advancing shares by 5:1.
Data Sources: B,.loomberg, CNBC, CNN Money, Google Finance, Market Watch, TD Ameritrade, Yahoo Finance.
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