Stock futures rise as online traders increase the amount of silver

The Cboe Volatility Index, an indicator of stress in the US stock market, fell by almost 5% on Monday, after gaining 45% in January. Some investors expect volatility to decline this week, as many hedge funds have already reduced short positions in stocks that have attracted a lot of attention on the Internet.

In the pre-market, some of the most traded shares among individual investors have increased recent gains. AMC Entertainment Holdings AMC 53.65%

rose 22% on Monday before the market opened, while headphone maker Koss gained 7% and GameStop rose 4.6%.

“There has always been a desire in the financial markets for investors to get rich quickly, so you may still end up having isolated incidents that will end the volatile performance of certain assets,” said Mark Dowding, chief investment officer at BlueBay Asset Management.

The broader stock market is expected to continue its recovery this year, he added. “We think the markets will do very well in the short term because you are hopeful that the economies will improve and we have a lot of political support,” said Dowding.

A recent decline in Covid-19 infection rates in the United States is likely to support market sentiment and allow stocks to recover some of Friday’s losses, said Patrick Spencer, managing director of American investment firm Baird. Newly reported coronavirus cases declined on Sunday from the previous day, as did hospitalizations and deaths.

“People were very conservatively positioned over the weekend, and news about the coronavirus and the continued central bank stimulus will increase momentum,” said Spencer. “You still have a lot of money to go back to the market.”

Silver prices have soared, fueled by a wave of new enthusiasm from online merchants. The move indicates that the recent surge in volatility is likely to extend for a second week in at least some pockets of the global financial market.

The most actively traded silver futures rose more than 10% to $ 29.70 a troy ounce, their highest level since February 2013. The precious metal gained in recent sessions after users of Reddit’s WallStreetBets forum posted about the execution of a “short squeeze” similar to those credited fueling recent gains in other stocks, such as GameStop and AMC. This suggests that individual investors are contracting hedge funds that are betting on falling silver prices.

“I totally underestimated that,” said Carsten Fritsch, a commodities analyst at Commerzbank. “I couldn’t imagine that this could happen to a serious and big market like silver.”

In bond markets, the yield on the 10-year Treasury bill fell to 1.076%, from 1.090% on Friday. Yields fall when prices rise.

Investors continue to monitor the corporate earnings season, with 111 S&P 500 companies reporting this week. The results of major technology companies, including Amazon.com and Alphabet, are due to be released on Tuesday.

The Institute for Supply Management manufacturing index for January, forecast at 10 am ET, is expected to show that US manufacturing activity has continued to expand, although perhaps at a slower pace than in previous months.

Abroad, the pan-continental Stoxx Europe 600 advanced 1.3%.

In Asia, benchmark indexes closed higher. South Korea’s Kospi rose 2.7% and Hong Kong’s Hang Seng rose 2.2%. China’s Shanghai Composite gained 0.6%.

Write to Caitlin Ostroff at [email protected]