Global equities again plunged lower, to close out an extremely volatile week, on the markets. Wall Street has been staggered by the ‘power of the people’. Retail Investors have been coordinated in their market activity and attacked the market ‘Hedge Funds’ short positions. The ‘short’ is inherently a ‘negative instrument’ employed by many over-capitalised/leveraged market players, that has come undone. Retail investors have coordinated actions to BUY against the market shorts and cost them Billions! This has unsettled markets to the point of action, attempting to ban the retail purchasing of targeted stocks. This ground swell market activity is a revolution, into a previously elite investor territory and looks to be the new battle ground. The SEC is investigating.
The Fed reiterated their ‘no interest rate’ monetary policy and refuted any attempt to ‘taper’ their QE. This reassured markets for all of 5 minutes. The cost of money is irrelevant and now Wall Street is seeing another dangerous side-effect. There are worrying signs in the new ‘Biden’ economy. Unemployment is on the rise and confidence is on the decline. Markets are in for a testing year, with the virus mutations and reactionary economic/social lockdowns, set to wreak havoc on global economies. The USD was steady, with the EUR trading 1.2130, while the GBP held above 1.3700.
The coming week will see an avalanche of market data releases, highlighted by Central Bank decisions from the RBA and Bank of England. Non Farm Payrolls and Employment data will dominate later in the week, with rising unemployment a worrying feature, of the shut-down economies. The employment data is not particularly accurate around the world and understates actual unemployment, while operating a camouflage operation with ‘pandemic’ welfare subsidies. Troubled waters lie ahead.