The Monday Market Minute
- Global stocks rebound, with silver prices rising to the highest in seven years, as the Reddit retail army turns its sights on commodities markets.
- Robinhood trims list of restricted stocks to eight, including GameStop, AMC Entertainment, Blackberry, Koss Corp and Nokia.
- Silver prices surge more than 12% to pass $30 per ounce, with fund flows approaching $1 billion following high-profile discussions on the Wallstreetbets chartroom.
- Market volatility remains elevated at multi-week highs, while the dollar creeps higher and Treasury yields dip amid investment fund hedging.
- U.S. equity futures suggest a firmer open on Wall Street heading into another busy earnings week highlighted by reports from Amazon, Alphabet, Pfizer and Exxon.
U.S. equity futures rebounded firmly Monday, with silver prices rising to a seven-month high, as retail investors continue to push certain assets as part of a broader effort to challenge Wall Street amid a renewed spike in market volatility.
With nearly a billion dollars of new money flowing into silver-targeted investment funds last week, the precious metal looks to have become the latest target of the Wallstreetbets group, which has successfully lifted shares in money-losing stocks such as GameStop (GME) - Get Report, AMC Entertainment (AMC) - Get Report and Bed Bath and Beyond (BBBY) - Get Report in recent weeks.
Weekend moves have lifted silver futures prices past the $30 mark, pulling mining company shares in Europe higher and once again illustrating the power of collective momentum from small investors.
BlackRock's iShares Silver Trust, the world's biggest silver ETF, was marked 9.25% higher at $27.29 in pre-market trading, while spot silver prices were marked 8.9% higher at $29.40 per ounce.
Some of Wallstreetbets earliest targets, including GameStop and AMC, were marked higher again in pre-market trading Monday despite some limited restrictions on dealing in those, and six other names, kept in place by the online trading app Robinhood, which came under fire last week for imposing caps on certain stocks at the peak of the Reddit-fueled frenzy.
Several U.S. based hedge funds with short positions on those and other stocks were left nursing nearly $20 billion in loses over the month of January, according to data from S3 Partners, with broader liquidity concerns boosting defensive assets such as the U.S. dollar in response.
Market volatility, meanwhile, remains elevated at multi-week highs, with the VIX index trading at 31.7 points in overnight dealing.
U.S. equity futures, however, look set to start the week on solid footing, with contracts tied to the Dow Jones Industrial Average priced for a 2300 point opening bell gain and those linked to the S&P 500 indicating a 30 point advance. Nasdaq Composite futures, meanwhile, suggest a 1250 point head start for the tech-focused benchmark.
The fourth quarter earnings season will continue to dictate trading ranges again this week, with 112 S&P 500 set to update on profits over the net five days, including Amazon (AMZN) - Get Report, Alphabet (GOOGL) - Get Report, Pfizer (PFE) - Get Report, Exxon (XOM) - Get Report, Bristol-Myers (BMY) - Get Report and Merck (MRK) - Get Report.
Sticking with fundamental market drivers, President Joe Biden is expected to meet with a group of Republican Senators later today in an effort to find support for his $1.9 stimulus package, with some GOP lawmakers urging him to reduce the overall total to $600 billion.
European stocks were firmly in the green Monday, as well, with the Stoxx 600 rising 1.3% and Britain's FTSE 100 added 1.05%. Overnight in Asia, the Nikkei 225 in Tokyo added 1.55% to close at 28,091.05 points while solid factory output data from China helped the region-side ex-Japan benchmark rise 1.92% heading into the final hours of trading.
Elsewhere, oil prices shrugged of the stronger U.S. dollar, which was marked 0.32% higher at 90.875 against a basket of its global peers, to recoup some of last week's losses in early Monday trading amid a broader surge in global commodity prices.
WTI crude futures for March delivery were marked 39 cents higher at $52.59 per barrel while Brent contracts for April, the global benchmark, rose 56 cents per to $55.60 per barrel.