Stock futures rise as online traders send money higher

The Cboe volatility index, an indicator of stress in the US stock market, fell nearly 5% on Monday after gaining 45% in January. Some investors expect volatility to drop slightly this week as many hedge funds have already reduced their short positions in stocks that have garnered a lot of attention on the internet.

In pre-market trading, some of the most traded stocks among individual investors have extended recent gains. AMC Entertainment Holdings AMC 53.65%

rose 22% on Monday before the market opened, while headset maker Koss gained 7% and GameStop rose 4.6%.

“There has always been a desire on the part of investors to get rich quick in the financial markets and you may therefore end up with isolated incidents in which you end up with a volatile performance of certain assets,” he said. said Mark Dowding, chief investment officer. agent at BlueBay Asset Management.

The stock market as a whole is expected to continue its rally this year, he added. “We think the markets are going to be doing very well in the short term because you are hopeful that the economies will improve and we have a lot of political support,” Mr Dowding said.

A recent drop in Covid-19 infection rates in the United States will likely support market sentiment and allow stocks to trace some of Friday’s losses, said Patrick Spencer, chief executive of U.S. investment firm Baird. Recently reported coronavirus cases were down on Sunday from the previous day, as were hospitalizations and deaths.

“People were positioned very conservatively heading into the weekend, and news about the coronavirus and continued central bank stimulus will add to the momentum,” Spencer said. “You still have a lot of money on the sidelines who want to come back to the market.”

Silver prices have recovered, fueled by a wave of fresh enthusiasm from online traders. This move indicates that the recent bout of volatility is likely to extend for a second week in at least some pockets of the global financial market.

The most actively traded silver futures rose more than 10% to $ 29.70 per troy ounce, its highest level since February 2013. The precious metal has gained in recent sessions after users of the Reddit’s WallStreetBets forum posted an article about running a “short squeeze” similar to those credited with fueling recent gains in other stocks such as GameStop and AMC. This suggests that individual investors are turning to hedge funds that bet on falling silver prices.

“I totally underestimated this,” said Carsten Fritsch, commodities analyst at Commerzbank. “I couldn’t imagine that this could happen to a serious and important market like silver.”

In bond markets, the yield on the 10-year Treasury bill fell to 1.076% from 1.090% on Friday. Yields fall when prices rise.

Investors continue to monitor the corporate earnings season, with 111 companies in the S&P 500 Index reporting this week. Results from major tech companies, including Amazon.com and Alphabet, are due on Tuesday.

The Institute for Supply Management’s manufacturing index for January, due at 10 a.m. ET, should show US factory activity continued to expand, but perhaps at a slower pace than in previous months.

Overseas, the pan-continental Stoxx Europe 600 index rose 1.3%.

In Asia, benchmarks closed higher. Kospi in South Korea climbed 2.7% and Hang Seng in Hong Kong by 2.2%. China’s Shanghai Composite gained 0.6%.

Write to Caitlin Ostroff at [email protected]