4 pm: Reddit day traders survive rough overall session
The Dow struggled in afternoon trading, falling 633 points, 2.1%, to 30,303. The Nasdaq lost 355 points, 2.6%, to 13,270, and the S&P 500 slid 99 points, 2.6%, to 3,751.
For the S&P, the drop comes a day after the index hit a record hgh and put it in the red for 2021 as a whole.
That hasn't stopped social media-supported stocks like GameStop (NYSE:GME), which more than doubled Wednesday to $344.99 and AMC Entertainment Holdings (NYSE:AMC), which quadrupled to $19.88.
12 pm: Boeing does the Dow no favors
The Dow dropped nearly 400 points, 1.3%, to 30,546, dragged down in part by The Boeing Company (NYSE:BA), which slipped 2.8% to $196.42.The aircraft producer posted a 2020 net loss of $11.9 billion thanks to the COVID-19 pandemic and the shutdown of its 737 Max planes.
The Nasdaq Composite dipped 207 points, 1.5%, to 13,418, and the S&P 500 lost 67 points, 1.8%, to 3,782.
Speculative trading, spearheaded by social media groups such as r/wallstreetbets on reddit, has sent stocks like GameStop Corp (NYSE:GME) and AMC Entertainment (NYSE:AMC) rocketing higher. The premise is to put pressure on short sellers who have targeted those companies in the past, forcing them to cover their losses by purchasing more shares at higher prices.
GME was up 133% to $345.31, and AMC nearly tripled in value to $14.69.
10:05 am: Proactive North America headlines:
Cabral Gold Inc (CVE:CBR) (OTCPINK:CBGZF) (FRA:C3J) releases sampling results from Jerimum Meio target on the Cuiú Cuiú project showing high-grade gold mineralization at surface
Gevo Inc (NASDAQ:GEVO) (FRA:ZGV3) flushed with $535M in cash and no significant debt as it announces key business updates and initiatives for 2021
NetCents Technology Inc (CSE:NC) (FRA:26N) (OTCQB:NCCTF) CEO Clayton Moore says 2020 'hastened' the transformation of cryptocurrency in letter to shareholders
Q BioMed Inc (OTCQB:QBIO) drug receives US Food & Drug Administration orphan drug designation
NexTech AR Solutions Corp (OTCQB:NEXCF) (NEO:NTAR) (FRA:N29) CEO Evan Gappelberg acquires 250,000 NexTech shares
Ascendant Resources Inc (TSE:ASND) (OTCMKTS:ASDRF) (FRA:2D9 starts more drilling at South Zone at Lagoa Salgada in bid to expand resource
Aurania Resources Ltd (CVE:ARU) (OTCQB:AUIAF)(FRA:20Q) bolsters board with experienced investment management executive
Mawson Gold Limited (TSE:MAW) (OTCPINK:MWSNF) (FRA:MXR) aims to have 20,000 metres of resource expansion drilling completed in Finland by mid-April
American Resources Corporation (NASDAQ:AREC) secures U$10 million of non-dilutive financing
Viscount Mining Corp (CVE:VML) (OTCQB:VLMGF) set to start second phase of drilling in Colorado next month
9:40 am: Wall Street starts in the red
The main indices on Wall Street started Wednesday’s session in the red as investors seemed content to stick on their hands ahead of the Federal Reserve meeting and earnings from several tech giants.
In the first minutes of trading, the Dow Jones Industrial Average was down 1.13% at 30,587 while the S&P 500 dropped 1.26% to 3,801 and the Nasdaq fell 1.72% to 13,392.
However, one stock having an excellent start to the day was GameStop, which continued its breakneck ascent at the opening bell with a 291.7% gain to US$300.82.
Meanwhile, another apparent beneficiary of the “short squeeze” phenomenon was cinema chain AMC Entertainment Holdings Inc (NYSE:AMC) which soared 270.6% to US$16.38 in early dealings.
8:25 am: Wall Street to start lower
Wall Street is expected to open lower amid pre-Fed jitters and the ongoing fallout of the GameStop Corp (NYSE:GME) short squeeze, which has seen the stock rise a whopping 93% to US$147.98 at close on Tuesday.
It is also a busy day for quarterly earnings, with Apple Inc (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Tesla Inc (NASDAQ:TSLA) all scheduled for Wednesday.
The first of eight US Federal Reserve policy meetings for the year is not expected by economists to lead to any changes in interest rates or quantitative easing (QE).
With interest rates unchanged since last March’s cut, Fed head Jerome Powell is expected by markets to announce that the US central bank will stand pat, with the headline cost of debt staying at 0.25% and QE running at US$120bn a month.
“Economists will look for commentary on inflation, employment and the US economy but the Fed seems in no rush at all to tighten policy,” noted Russ Mould at AJ Bell, “especially as it is moving to inflation averaging as a target – so that it will tolerate an overshoot in inflation relative to its 2% target after any prolonged period of undershooting it. At the moment, that means a fair portion of the last decade.”
“Whether steamy financial markets, where there are clear signs of asset price inflation, need any further incentive to run hot is open to debate and the Fed has a tricky balancing act to manage as it tries to support the economy and avoid a third market bubble in just over 20 years (something which some argue it is already failing to do).”
Four things to watch for on Wednesday:
- Aside from Big Tech, other big companies reporting earnings today include telecoms firm AT&T Inc (NYSE:T), aircraft maker Boeing Co (NYSE:BA), medical devices group Abbott Laboratories (NYSE:ABT) and software firm Service Now Inc (NYSE:NOW)
- Meanwhile, shares in Walgreens Boots Alliance Inc (NASDAQ:WBA) will be in focus after the company confirmed it has tapped Starbucks exec Roz Brewer to be its new CEO
- Pharma giant Pfizer Inc (NYSE:PFE) may also be eyed amid reports Germany and the rest of the EU could potentially block exports of its COVID-19 vaccine
- On the macro front, while the Fed will be dominating the diary investors may also be keeping an eye on US durable goods orders for December