Week in a Glance: Wall Street nightmares, the Fed and US GDP

1 de fev. de 2021

The main event of the past week was, of course, organized attacks by retail investors on the shares of a number of companies. We wrote about this in our previous reviews, in fact, absolutely everyone has already written about it, so we will not once again describe the essence of what is happening. Let's talk better about the consequences.

Based on the current situation, we can talk about a local revolution in financial markets that can significantly reshape them. At a minimum, everyone on Wall Street will now monitor the largest forums and chat rooms to earn an extra penny or defend against future attacks.

But on the whole, it is clear that the status quo will be violated. Moreover, both by market methods (for example, a sharp rise in prices for option contracts and a decrease in the potential of gamma squeezes) and non-market (regulators have not yet said their word, but it is obvious what they will say).

In the meantime, retailers are seizing the moment and continue to attack new companies, wreaking havoc and anarchy on Wall Street.

Among other events of the week, it is worth noting the meeting of the FOMC, which finished without surprises: the rate was left unchanged, as well as other parameters of the monetary policy. At the same time, Powell confirmed that this state of things will remain unchanged for the foreseeable future.

The data on US GDP, published on Thursday, came out slightly worse than analysts' forecasts (4%), but on the whole they cannot be called a failure (after all, the country was in a lockdown for half a quarter). Although it is worth noting that the annual GDP fell by 3.5%, which was the worst year for the United States at least since the end of World War II.

The coming week will definitely not be a week of respite after a busy previous one: statistics on the US labor market (including data on NFP), the Bank of England meeting, Eurozone GDP, as well as the further development of the confrontation between Reddit and Wall Street will not let anyone sleep well.