Spencer Platt / Getty Images
- US equities fell on Friday, with investors bracing for more volatility fueled by day-traders and refusing data from Johnson & Johnson’s COVID-19 vaccine.
- Reddit traders boosted GameStop, AMC and more after brokers removed some trade restrictions.
- Johnson & Johnson said its vaccine was 66% effective, but the data suggest that the injection is less beneficial against the strain of the virus first identified in South Africa.
- Sign up here to receive our daily newsletter, 10 things before the opening bell.
US stocks fell on Friday, with investors avoiding speculative bets from retail traders and disappointing data from the Johnson & Johnson vaccine.
GameStop, AMC and other favorite Reddit stocks rebounded as day traders returned to their risky positions. Highly volatile names took center stage in the market, and moves by Robinhood, Interactive Brokers and other platforms to restrict trading were met with requests for hearings and reforms in Congress.
Market participants fear that the retail traders’ goal of selling short may force hedge funds to hedge their bearish bets by selling their long positions. Although the phenomenon has shaken only a few funds, strategists have raised concerns about a growing market disruption.
This is where the US indices were right after opening at 9:30 am ET on Friday:
Read More: GameStop grew by over 600% last week. Three experts find out where the stock can go from here, as Reddit’s army of brokers make profits and look for its next targets.
“It was already becoming clear that the stock markets had lost their enthusiasm,” said Craig Erlam, senior market analyst at Oanda. “Suddenly, the conversation shifted to whether we are seeing foamy markets, bubble behavior and the pullback was underway.”
Johnson & Johnson announced on Friday that its single-dose vaccine COVID-19 was 66% effective, well below the efficacy shown by other companies’ two-dose programs. Johnson & Johnson said its vaccine was also less effective in South Africa, suggesting that the injection is less beneficial in protecting against the most contagious virus strain initially identified in that country.
Shares soared to record levels throughout January, in the hope that the launch of vaccines and the stimulus of the Biden government could accelerate the US economic recovery. The Johnson & Johnson announcement highlights the difficulty in ending the pandemic and achieving collective immunity.
Johnson & Johnson sank on the news.
Read More: A Wall Street company adjusted the Shiller PE index to create a superior indicator of the strongest stock market returns – and deciphered why the beloved metric doesn’t cut it anymore
Bitcoin rose above $ 38,500 for the first time since Jan. 15, after Tesla CEO Elon Musk added “#bitcoin” to his Twitter bio. The most popular cryptocurrency fluctuated around $ 32,000 for about a week, after reaching record levels at the beginning of the new year.
Spot gold was up 1.6% to $ 1,874.08 an ounce. The US dollar weakened slightly against a Group of 20 currency basket, and Treasury yields rose slightly.
Oil prices have gone up. West Texas Intermediate crude rose up 1.1% to $ 52.92 a barrel. Brent-type oil, the international benchmark for oil, fell 1.1% to $ 56.15 a barrel.
Now read more market coverage on Markets Insider and Business Insider:
US GDP grew 4% weaker than expected in the 4th quarter, as COVID-19 cases skyrocketed
How Reddit day traders are using the platform to turn the stock market and make money in the process
MORGAN STANLEY: Buy these 8 stocks set to crush your fourth quarter earnings