It’s another busy week of earnings, and stocks seem to be starting well.
Apart from earnings, the expectation that new stimulus will heat up the US economy has sparked optimism. Treasury Secretary Janet Yellen said President Joe Biden’s $ 1.9 trillion aid plan could provide enough growth to give him full employment again next year.
In further signs of optimism about the recovery, Brent crude futures BRN00,
hit $ 60 a barrel for the first time in more than a year on Monday. The yield on the US Treasury TMUBMUSD10Y for ten years,
increased to 1.20%.
The Reddit-powered GameStop GME,
the frenzy seems to have cooled after shares in the retailer with many short players fell 78% over the past week by 1,737% over the past three weeks.
In us call of the day, Deutsche Bank DB,
strategists said the stocks that have been shorted the most are actually outperforming since March last year, long before users on Reddit’s WallStreetBets forum aimed for them.
They said that although short-term stocks usually performed better during broad market marches, the size of the current rally was ‘off the chart’.
Since the market bottom in March, most shorted stocks – defined as the top 10% of short-term interest as a percentage of market capitalization – have risen by 245%, better than the Russell 3000 Index RUA,
with 147 percentage points.
Compustat, Haver, Deutsche Bank Asset Allocation
Led by chief strategist Binky Chadha, they noted that half of the better performance came before the US election in November and positive vaccine developments.
They said the better performance could not be explained by the broad market or ‘everything collapses’, nor could it be entirely attributed to the retail buying trend, which has accelerated performance since November.
“We see this reflects the fact that short exposure has concentrated strongly in equities with low profitability and growth, especially in pandemic-affected industries, even though the unfolding economic recovery has improved the outlook for these businesses,” they said.
Despite the recovery that has begun to recover, shorts are still largely targeted at pandemic-affected industries, they noted, adding that there is skepticism about a strong recovery. “Nine months after the shortest recession we believe ended, the consensus has consistently brought about the real improvement in macro data.”
They also said that the 2021 consensus had crept just a little higher, despite a third consecutive quarter of a ‘huge’ record earnings slump for S&P 500 businesses, and that it was far below its own forecasts.
The markets
US futures contract YM00,
ES00,
NQ00,
at the beginning of another busy week of earnings showed higher before the open. European stocks also gained early trading, despite concerns about the spread of new variants of the coronavirus causing COVID-19. Asian markets were largely higher overnight due to growing optimism about the global economic recovery.
The buzz
The price of Bitcoin BTCUSD,
rose to $ 44,088, reaching a new record after Tesla TSLA,
said he acquired $ 1.5 billion in cryptocurrency in January, the digital asset could be accepted for payment in the future.
Hyundai Motor Co. 005380,
said on Sunday it was not in talks with technology giant Apple AAPL,
to develop an autonomous electric motor, contrary to several reports.
Social media platform Twitter TWTR,
According to FactSet analysts, its second quarter of $ 1 billion in revenue will be recorded when it reports on Tuesday.
The government in Biden will announce this week that it will rejoin the United Nations Human Rights Council, with which then-President Donald Trump withdrew almost three years ago, US officials said on Sunday.
Apple Disk Provider Dialog Semiconductor DLG,
0OLN,
was snapped up by Japan’s Renesas Electronics in a deal worth € 4.9 billion ($ 5.9 billion).
The Tampa Bay Buccaneers dominated the Kansas City Chiefs when fullback Tom Brady won his seventh Super Bowl title and his first with a team other than the New England Patriots.
Random reading
Why do some scientists think that all life began on Mars?
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