GameStop: what it reveals about the US stockmarket | The Economist Description video: The frenzied rise of GameStop’s share price baffled Wall Street and panicked the US Treasury. What does the GameStop story reveal about American stockmarkets? Our experts answer […]
GameStop: what it reveals about the US stockmarket | The Economist
The frenzied rise of GameStop’s share price baffled Wall Street and panicked the US Treasury. What does the GameStop story reveal about American stockmarkets? Our experts answer your questions.\n\nChapter titles:\n\n00:00 – GameStop surge explained\n00:55 – Was Robinhood right to restrict trade?\n01:56 – Short selling and short squeezes\n03:05 – Is the stockmarket fair? \n06:03 – Will it lead to more regulation?\n06:51 – Is the US stockmarket overheated?\n10:09 – Is this a trend? \n\nFurther content:\n\nSign up to The Economist’s newsletter to stay up to date with our coverage: https://econ.st/3tgaHl5 \n\nFind all of our finance and economics coverage: https://econ.st/3pujLQM \n\nRead more about the GameStop frenzy: https://econ.st/2Mz9kwO \n\nWhy retail investors often learn the wrong lessons from success: https://econ.st/36oEdeq \n\nWhy you should ignore the siren call of market timing: https://econ.st/3cmm4S9 \n\nWhat explains investors’ enthusiasm for risky assets? https://econ.st/3afbSID \n\nWhy stocks are still cheap relative to bonds: https://econ.st/2YpjrXw \n\nShould you buy European shares? https://econ.st/2MgUtHp \n\nWhy value investing is struggling to remain relevant: https://econ.st/2KYsZ8S \n\nFirst-time investors are flooding Brazil’s stockmarket: https://econ.st/3acWXPb \n\nShares in emerging markets have hit a record peak: https://econ.st/2NNYbJa \n\nMeet the data firms cashing in on the quant-investing boom: https://econ.st/2M6lvS1 \n\nHave banks now got too much cash? https://econ.st/3acBGFn \n\nIs the financial establishment coming round to bitcoin? https://econ.st/2YpiK0m \n\nWill central-bank digital currencies break the banking system? https://econ.st/2MfkwyS \n\nWhat the Big Mac index tells you about currency wars: https://econ.st/3t8fqF9 \n\nThe market v the real economy: https://econ.st/3af25Cq \n\nWhat is the economic cost of covid-19? https://econ.st/39wsv3w \n\nWhy a surge in inflation looks unlikely: https://econ.st/3r3XSbk
While retail investors inflated the GameStop bubble, big players were buying up tech stocks
Big investors poured a record $ 4.2 billion into big tech stocks last week, BofA data released Friday showed. Professional market participants took advantage of the slight pullback on Wall Street, while retail traders were busy buying stocks of memes like GameStop..
Last month, an army of retail investors clashed with Wall Street professionals by buying up stocks in which hedge funds have plummeted. During the struggle, some funds had to sell their long positions to cover losses, which led to a wider fall in share prices.
«Over the past two weeks, customer sentiment has been unambiguously expressed in purchases amid poor performance in FAANMG (Facebook, Amazon, Apple, Netflix, Microsoft, and Alphabet, which owns Google)», – said Michael Hartnett, Chief Investment Strategist BofA.
Big Tech companies have become one of the main beneficiaries of the pandemic, as their revenues have increased simultaneously with the introduction of lockdowns, in parallel, they have grown in interest from investors who took advantage of the cheap money available..
Meanwhile, a sudden surge in stock market volatility last week also sent investors fleeing in bonds that raised $ 21.2 billion, the largest in four months. This week, however, concerns have eased as major Wall Street indices hit record highs..
Far from the noise of Wall Street, emerging market equities have been a favorite with investors as they put in $ 5.7 billion in the week from Wednesday to Wednesday. This sector has experienced 19 of the last 20 weeks.
The fever among retail investors also saw silver prices jump above $ 30 an ounce for the first time since 2013 before prices fell. The precious metal raised a record $ 2.8 billion in the week before Wednesday, according to BofA.