U.S. stocks closed down on Tuesday 2nd March 2021, as the fight between bulls and bears continued after Monday’s hike
S&P 500 range bound?
The S&P 500 is trapped in a range between 3,800 and 3,900 – a close above or below these levels will be important for the future direction of the market. Futures trade higher.
UK tocks moved higher in early trade Wednesday 3rd March 2021, with the FTSE 100 closing in on 6700 – will it stabilise and gain from here?
European stocks also moved higher touching the top of recent ranges. The DAX moved to a record high, boosted by recent comments from the ECB board who indicated that they would act against the rise in bond yields.
Relaxed Fed on bond yield movement
The Fed has remained calm about the recent jump in bond yields – which has stabilised this week – it is not being ignored – but still, Fed chair Jerome Powell didn’t appear unduly worried last week as was apparent in his statement.
Meme stock craze still making waves
Shares in online mortgage firm Rocket Companies (RKT) surged after attracting the Reddit treatment.
It appears short interest in the stock was exposed similar to that we witnessed with GameStop. Comments made on ‘wallstreetbets‘ gained traction driving the price of RKT up – thus creating a short squeeze.
One big gamble?
Is socially driven trading here to stay and will it continue to result in frequent unexplainable stock movements? Is socially driven trading a form of market manipulation?
VanEck Associates will this week launch a new exchange traded fund (ETF) that seeks to track the performance of the top 75 most buzzy companies on the internet.
The VanEck Vectors Social Sentiment ETF (BUZZ) will track the BUZZ NextGen A.I. U.S. Sentiment Leaders Index.
This index is reported to hold the most discussed stocks online.
How interlinked are these companies through social media platforms? Is it a form of ‘frenzied’ market manipulation enabling stock movements through aggressive social media ‘conference’?
The A.I. connection?
Dave Portnoy, the meme stock chief, is a part owner of the business (Buzz Holdings Inc.) which licences the index to VanEck.
This ETF will reportedly hold some 75 large capitalised U.S. stocks which, according to the advertising material will use A.I. to locate, ‘the most positive investor sentiment according to our analytics models. These stocks are selected and scored using artificial intelligence, including machine learning and natural language processing algorithms, applied to millions of data points aggregated from social media, news, and blogs.
All very futuristic and cutting edge. But if it doesn’t play according to the A.I. plan – can it be overridden by human interaction? I assume A.I. will not make all the decisions if humans don’t like what they see?
Bitcoin up gain
Bitcoin risk appetite returned and investors considered the regulatory issues facing cryptocurrencies.
The number one cryptocurrency climbed 7% to trade above $50,000 in early trade Wednesday. On Tuesday, prices slipped 2.9% after Gary Gensler, nominee for chairman of the U.S. Securities and Exchange Commission, said that making sure crypto markets are free of fraud and manipulation is a challenge for the agency.
Buffet fear factor index
The Buffett Indicator currently is at its most extreme bearish level in U.S. market history, and several decades ago Buffett described it as ‘the best single measure of where valuations stand at any given moment.’ Are we at a crossroad, are markets about to tip over?
Has too much stimulus cooked the market?