US stock market fell sharply… All of the gains this year in the S&P500 index are returned
Personal purchases such as Gamestop and AMC continue… Hedge Fund’Surrender’
Photo = Getty Image Bank
The New York Stock Market fell sharply. Disappointment with the results of the Federal Open Market Committee (FOMC) meeting of the US Central Bank (Fed), poor corporate performance, unstable stock market conditions caused by speculative trading, and fatigue from soaring stock prices. Even in the midst of this, Game Stop surged by more than 130%, and the fluctuations of individual events were mixed.
On the 27th (local time) on the New York Stock Exchange (NYSE), the Dow Jones 30 Industrial Average fell 633.87 points (2.05%) from the previous trading day to 30,303.17. The Standard & Poor’s (S&P) 500 index fell 98.85 points (2.57%) to 3750.77, while the technology stock-oriented Nasdaq index plunged 355.47 points (2.61%) to 13,270.60. The Dow Index has suffered the largest decline in one day since the end of October last year, and the S&P 500 has returned all the gains this year.
The surge in prices of some stocks was a burden on the market. Gamestop, a game-related retailer, jumped more than 130% on the day, and AMC, a movie theater chain, ran more than 300%. Recently, as individual investors intensively bought Gamestop and AMC, the hedge fund, which took a short short position with the company, withdrew from the short position. The problem is that a hedge fund, which lost through short selling, has to sell other stocks to make up for the loss. There are concerns over a series of share price declines.
FOMC results did not alleviate market anxiety. The Fed did not change interest rates or asset purchases as expected at FOMC on the day. There was no change in guidance on the policy. Fed chairman Jerome Powell said it was too early to discuss the reduction of asset purchases (tapering), and said that he would fully inform the market before tapering. However, no opinion was presented on the possibility of further mitigation.
The fact that the supply of vaccines for the novel coronavirus infection (Corona 19) was disrupted was also a factor that suppressed the stock price. It is argued that the vaccine supply may not be smooth, as it is expected that AstraZeneca will supply less than planned supply to Europe.
White House spokesman Jen Saki also undermined investor sentiment, saying that he wants a strong and clear investigation into the theory of the origin of Corona 19 in China, and that it is necessary to restrict the use of Chinese products such as Huawei.
Seo Sang-young, a researcher at Kiwoom Securities, said, “The US stock market has declined due to complex reasons such as poor performance of companies, speculative trading, and disappointing FOMC results.” It was a burden on the stock market because it could be ordered.”
Photo = AP
Some stocks surged in individual buying. GameStop closed the deal at $347.51, up 199.53 (134.84%) per share from the previous day. AMC Entertainment also closed the deal at $19.90, up 14.94 dollars (301.24%) per share from the previous day.
These are stocks that hedge funds have recently focused on short selling. They have engaged in intense battles with individual investors. However, the news that some hedge funds withdrew their short-selling positions on the stock served as a catalyst for the stock price hike. These hedge funds are said to have lost at least billions of dollars.
Share prices of companies that performed poorly fell. Boeing closed for $194.03, down $8.03 (3.97%) per share from the previous day. Boeing announced that it recorded a net loss of $11.4 billion (about 1.32 trillion won) last year. This is the effect of a long-term suspension of operation of the 737 Max, which caused a series of crash accidents, and the demand for airliners plunged due to the Corona 19 incident.
Starbucks also plummeted. Starbucks closed at $97.87, down $6.82 per share (6.51%) from the previous day. Starbucks announced that its sales in the fourth quarter of last year recorded $6.75 billion, down 5% from the same period last year. It was below the market forecast ($6.93 billion). Earnings per share (EPS) was 61 cents, down from the same period last year.
AMD, a US semiconductor company, fell despite good performance. AMD closed the deal at $88.84, down $5.87 (6.2%) per share from the previous day. During the intraday, it fell more than 9%. The day before, AMD announced that its sales in the fourth quarter of last year increased by 53% compared to the previous year to $3.24 billion (about 3.5 trillion won). It surpassed the market estimate ($3.30 billion). The fact that profit-taking sales were poured out despite favorable performance is considered the background of the stock price decline.
Lee Song-ryul, reporter of Hankyung.com [email protected]