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- U.S. stocks slipped on Friday as investors braced for increased volatility fueled by day trader and hesitated over data on the Johnson & Johnson COVID-19 vaccine.
- Reddit traders took GameStop, AMC and others higher after brokers removed some trading restrictions.
- Johnson & Johnson said their vaccine was 66% effective, but data suggests the vaccine is less beneficial against the strain of virus first identified in South Africa.
- Sign up for our daily newsletter, 10 things before the opening bell here.
U.S. stocks fell on Friday as investors avoided speculative bets from retail traders and disappointing vaccine data from Johnson & Johnson.
GameStop, AMC and other favorite Reddit stocks rebounded as day traders resumed their risky positions. Highly volatile names have taken center stage in the market, and moves by Robinhood, Interactive Brokers and other platforms to restrict trade have been met with calls for hearings and Congressional reforms.
Market participants are concerned that the targeting of shorts by retail traders will force hedge funds to hedge their bearish bets by selling their long positions. While the phenomenon has rocked only some funds, strategists have expressed concern about growing market disruption.
Here’s where the U.S. indices were soon after the Friday opening at 9:30 a.m. (ET):
Read more: GameStop jumped over 600% last week. 3 experts break down where the stock could go from here as Reddit’s army of traders takes profits and searches for their next targets.
“It was already becoming clear that the stock markets had lost their buzz,” said Craig Erlam, senior market analyst at Oanda. “Suddenly, the discussions turned to whether we see sparkling markets, bubble-like behavior and the pullback was underway.”
Johnson & Johnson announced on Friday that its single-dose COVID-19 vaccine was 66% effective, well below the effectiveness demonstrated by other companies’ two-dose programs. Johnson & Johnson said its vaccine was also less effective in South Africa, suggesting the vaccine is less beneficial in protecting against the more contagious strain of the virus first identified in that country.
Shares hit record highs throughout January in hopes that vaccine deployments and the Biden administration’s stimulus measures could accelerate the rebound in the U.S. economy. Johnson & Johnson’s announcement highlights the difficulty of ending the pandemic and achieving collective immunity.
Johnson & Johnson has sunk into the news.
Read more: Wall Street firm altered the Shiller PE ratio to create an upper gauge of the strongest stock returns – and explained why the beloved metric wouldn’t lower it anymore
Bitcoin topped $ 38,500 for the first time since Jan. 15 after Tesla CEO Elon Musk added “#bitcoin” to his Twitter bio. The most popular cryptocurrency has hovered around $ 32,000 for about a week after hitting record highs at the start of the new year.
Spot gold climbed 1.6% to $ 1,874.08 an ounce. The US dollar weakened slightly against a basket of comparable Group of 20 currencies, and yields on Treasuries edged up.
Oil prices have gone up. West Texas Intermediate crude rose 1.1% to $ 52.92 per barrel. Brent, the international benchmark for oil, fell 1.1% to $ 56.15 per barrel.
Now read more market coverage from Markets Insider and Business Insider:
U.S. GDP grew 4% weaker than expected in Q4 as COVID-19 cases soared
How Reddit Day Traders Are Using The Platform To Shake The Stock Market And Make Money In The Process
MORGAN STANLEY: Buy These 8 Shares To Crush Their Next Q4 Earnings
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