UK house prices dip as stamp duty holiday nears end – business live – The Guardian

A GameStop store in the Manhattan borough of New York City, New York, last week

Show

After wild volatility earlier, GameStop shares are looking more stable.

But they’re still down over 50% today, currently trading around $104, in a blow to retail traders who bought the stock at its highs last week.

John Kicklighter
(@JohnKicklighter)

Between the gap and additional losses, GameStop ($GME) is down 50% from Monday’s close. Overall, from Thursday’s record intraday high, we are down over 75%. Volume is also fading, which may show appetite to keep the stock up may be waning pic.twitter.com/vvAXLpGEII

February 2, 2021

Here’s CBS News’s take:

The GameStop drop followed a large reduction in short interest on the stock, which measures how many of the company’s shares have been borrowed to sell. Many had pointed to that previously high short interest, and the fact that hedge funds and others betting against the video game retailer had been squeezed, as a reason GameStop’s shares had soared.

The drop may also result in significant loses for some of the individual investors who had ridden the positive stock market suggestions posted on WallStreetBets, which has soared in popularity in the past week to 8 million members. GameStop’s shares hit an all-time high of $483 on Thursday.

Updated
at 7.24pm GMT

7.14pm GMT
19:14

Senator Warren seeks answers over Robinhood’s GameStop trading curbs

Senator Elizabeth Warren has written to Vladimir Tenev, the CEO of Robinhood, asking why his service restricted trading in shares such as GameStop last week.

Senator Warren says:

In addition to putting customers’ finances at risk, Robinhood’s actions revealed a new set of questions about its relationship with large hedge funds and other financial institutions, and follows past criticisms of Robinhood’s insufficient investor protections.

Robinhood has a responsibility to treat its investors honestly and fairly, and provide them with access to the market under a transparent and consistent set of rules. It is deeply troubling that the company may not be doing so.

Last week, Robinhood blamed the increased deposit requirements from its clearinghouse for the curbs.

Senator Warren, though, is concerned about the firm’s links with Citadel Securities, the electronic-trading firm owned by hedge-fund billionaire Ken Griffin, which executes Robinhood’s trades.

That link has put Citadel in the spotlight, as the firm bailed out Melvyn Capital Management after its short-selling bets against GameStop went sour.

Senator Warren asks:

Did Robinhood engage in any discussions with any Citadel businesses or affiliates prior to Robinhood reaching its decision to institute restrictions on trading for GameStop and other stocks?

The letter is online here.

Elizabeth Warren
(@SenWarren)

I have questions for @RobinhoodApp on why they restricted GameStop trades and changed the rules on investors with no warning, their cozy relationship with hedge funds, and their forced arbitration clauses that block users from suing them. We need answers. https://t.co/z7CizGPM5y

February 2, 2021

Sonali Basak
(@sonalibasak)

Elizabeth Warren writes to Robinhood’s CEO. Her main concerns:

* Details on why trading was curbed
* The ability for customers to pursue claims outside of forced arbitrations
* Transparency regarding its relationship to Citadel Securities https://t.co/UIFKdx4GUm

February 2, 2021

6.23pm GMT
18:23

Here’s our news story about today’s eurozone GDP figures, and the rising fears of a double-dip recession:

5.26pm GMT
17:26

Back in London, the FTSE 100 index of blue-chip shares has closed 50 points higher at 6516 points, up 0.8%.

That’s its second day of gains, as stocks recover from last week’s selloff during the short squeeze frenzy (when volatility spiked amid worries that hedge funds would sell assets to cover their losses on shorted stocks).

Travel and hospitality companies rallied, with hotel groups Intercontinental and Whitbread both gaining 5.8%, and airline group IAG up 5%.

Oil giant BP fell 4.5%, though, after posting its first annual loss in a decade after a “brutal” year in which the Covid-19 pandemic took its toll on the global oil industry.

Silver miner Fresnillo was the top faller, down 4.8%, due to the fall in the silver price today.

Silver is currently down 8.8% at $26.43 per ounce, having briefly hit $30 yesterday in a rally attributed to retail investors (although many on WallStreetBets insist they weren’t involved).

5.05pm GMT
17:05

Today’s moves suggest that the ‘short squeeze frenzy’ that gripped investors last week is cooling, explains David Madden of CMC Markets.

Gamestop, Blackberry, AMC Entertainment and Bed Bath & Beyond are nursing large losses today. The stock experienced massive rallies last week as they were caught up in the short squeeze frenzy that was carried out by a hoard of retail traders.

It seems the heat has come off the shares.

AMC shares are currently down 38% today, with BlackBerry off 21% and Bed Bath & Beyond down 14%.

4.46pm GMT
16:46

GameStop shares are now recovering some ground, after Robinhood eased its restrictions on share purchases.

They’re now risen back up to $129, triggering another brief trading halt due to volatility. That still leaves from down around 40% today, though.

First Squawk
(@FirstSquawk)

GAMESTOP BUYING SURGE, HALTED BY NYSE; AFTER ROBINHOOD SAYS RAISING TRADING LIMIT ON GAMESTOP SHARES TO 100 FROM 20

February 2, 2021

Trading Nation
(@TradingNation)

GameStop off its session lows after dropping more than 60% this morning, rebounding after Robinhood rolled back some of its trading restrictions on the stock. $GME pic.twitter.com/gYk17aH6ll

February 2, 2021

4.38pm GMT
16:38

Robinhood raises limit on GameStop share purchases

Trading app Robinhood has relaxed its restrictions on buying GameStop shares.

It will now let customers buy up to 100, up from 20 (including shares already owned).

Back on Friday, customers were limited to just one share, having been temporarily restricted from buying any last Thursday.

That ban sparked anger from customers, and claims that Robinhood was trying to protect the hedge funds who had shorted GameStop – and were facing huge losses.

Robinhood, though, blamed demands for higher deposits from its clearinghouses due to stock volatility.

It has also lifted restrictions on other stocks popular with the Reddit trading community, including cinema chain AMC.

CNBC has more details:

Clients can now buy 1,250 shares of AMC Entertainment, up from the 350 earlier in the trading day.

Robinhood clients can now buy 3,000 shares of Express, up from the 1,000 share limit. Investors can buy up to 12,000 shares of Naked Brand Group up from the previous restrictions of 6,500. Nokia’s buying cap is the same at 2,000 shares.

Maggie Kate Fitzgerald
(@mkmfitzgerald)

Robinhood raises trading limits on restricted stocks, customers can buy 100 GameStop shares now $GME https://t.co/bpYDx6jk4H

February 2, 2021

4.13pm GMT
16:13

GameStop shares are trading below $100 for the first time since last Tuesday.

GameStop shares closed at $325 on Friday night, at the end of an extremely volatile week (on Thursday alone, it traded as high as $482.95, and as low as $113.5).

3.51pm GMT
15:51

The selloff is gathering pace, with GameStop shares now down nearly 60% today at around $90.

2.57pm GMT
14:57

GameStop shares slump in early trading

Shares in GameStop have tumbled in early trading, and are currently down around 49% at $114.

Trading in the videogame retailer were briefly halted at the open, due to high volatility, as it continues to fall away from last week’s highs.

Other heavily shorted stocks which surged last week, such as cinema chain AMC and headphone manufacturer Koss Corporation, are also falling in early trading.

2.44pm GMT
14:44

Wall Street has opened higher, with the Dow Jones industrial average gaining around 339 points, or 1.1%, to 30,551 points.

The technology-focused Nasdaq index is up 1.3%, as shares continue to recover from last week’s selloff.

Reuters says:

Wall Street’s main indexes opened higher on Tuesday, building on the previous session’s momentum, as investors anticipated strong results from Amazon and Google-parent Alphabet while also looking for signs of progress on a pandemic-relief package.

2.23pm GMT
14:23

Here’s Bloomberg’s take on GameStop’s shares, as we wait for the US stock market to begin trading (at 9.30am in New York, or 2.30pm UK time).

GameStop’s retreat has coincided with a sharp reduction in short interest after bearish investors appeared to cover their positions. That has loosened a squeeze on the stock caused by day traders who used Reddit forums to tout and bid up out-of-favor stocks that also included movie-theater chain AMC Entertainment Holdings Inc. and American Airlines Group Inc.

“It looks like the unwind of the short squeeze, where prices will start to reflect economic reality again,” said Maarten Geerdink, head of European equities at NN Investment Partners.

Other stocks recently favored by the Reddit community are also rapidly losing air: AMC slid 25% in premarket trading and at $10 is more than 50% below last week’s intraday high. Express Inc. declined 18% and has lost about 70% of its value since peaking on Wednesday.

The declines come as short sellers reduce their interest, having sustained multi-billion dollar losses. The short interest in GameStop shares has tumbled to 39% of its freefloat, according to data from IHS Markit.

More here.

David Jones
(@JonesTheMarkets)

$GME GameStop now 70% below last Thursday’s high. https://t.co/yPRYuYJc9B

February 2, 2021

1.40pm GMT
13:40

GameStop shares slump in pre-market trading

Shares in GameStop are slumping in pre-market trading, falling sharply below the highs seen during last week’s ‘short squeeze’ surge.

GameStop is currently down around 40% in US pre-market trading, at around $133.

They had already fallen 30% during Monday’s trading session to $225, having traded over $400 at one stage last Thursday.

The GameStop share price as of last night

Cinema chain AMC Entertainment Holdings, another company popular with the WallStreetBets group on Reddit, is also down 30% in pre-market trading.

The tumble in GameStop’s shares suggests that some of the hedge funds who had been caught in last week’s ‘short squeeze’ have now closed their short positions.

On Monday, analytics firm S3 Partners reported that the number of GameStop shares that were shorted had fallen by over half in a week, as short sellers covered their bets.

That would mean that fewer hedge funds who had shorted the stock would now be trying to buy back GameStop shares to cover their losses.

CNBC explains:

GameStop’s shares have traded wildly in recent weeks after retail traders on Reddit sparked a short squeeze in the stock, a phenomenon where traders who had bet against the stock are forced to buy it to limit their losses, pushing the price even higher.

Short interest in GameStop as a percentage of shares available for trading dropped to about 53% from over 110% a week ago, according to data from S3 Partners.

“Both fundamental and momentum short sellers have found opportunities and price exit points to trim their positions in the face of these losses as the GME short squeeze is in full force,” said Ihor Dusaniwsky, S3 managing director of predictive analytics.

And here’s Reuters take: Number of GameStop shares shorted falls by over half in week -S3 Partners

Yesterday, stock trading app Robinhood lifted its restrictions on buying GameStop shares, letting users buy up to 20.

Robinhood made the move after raising another $2.4bn from investors. That will help it meet demands for higher margin deposits by the clearing houses who handle its trades in shares and options, following last week’s stock volatility.

Updated
at 2.07pm GMT

12.17pm GMT
12:17

Pound hits nine-month high vs euro

The euro has fallen to a nine-month low against the pound today, as fears of a eurozone double-dip recession rise.

Sterling rose to €1.1365 this morning, for the first time since last May, as this morning’s GDP report showed the eurozone shrank by 0.7% in the last quarter of 2020, and will probably keep shrinking in the current quarter.

It means one euro is worth 88p.

The euro has also dropped to a seven-week low against the US dollar today.

Raffi Boyadjian, senior investment analyst at XM, says:

Persisting doubts about the EU’s ability to clean up its vaccine mess and the prospect of prolonged lockdowns continues to put a dampener on the currency.

Jeffrey Halley, senior market analyst at OANDA, agrees that fears of a double-dip recession are weighing on the euro:

The Euro continues to bear the brunt of Dollar strength, with fears of a double-dip recession caused by its poor vaccine rollouts and ham-fisted policy response to that problem.

With criticism of the EU’s vaccine strategy rising, commission president Ursula von der Leyen has claimed today the vaccination programme in the UK has enjoyed a head start through compromising on “safety and efficacy” safeguards.

My colleague Daniel Boffey explains:

The former German defence minister, who took command of the EU’s executive branch in 2019, said she had a responsibility to take time to ensure the success of the bloc’s mass vaccination programme.

In the face of heavy criticism, including from her predecessor, Jean-Claude Juncker, Von der Leyen said she was committed to her role and should be judged at the end of her term in 2024.

“Some countries started to vaccinate a little before Europe, it is true,” she said, asked about the UK. “But they resorted to emergency, 24-hour marketing authorisation procedures.

Just 2.84% of the EU’s adult population having received a jab against 14.41% in the UK as of Tuesday, Daniel adds. More here:

11.58am GMT
11:58

CEBR: Europe’s slower vaccine rollout could mean slower recovery

The slow start to Europe’s Covid-19 vaccination programme could weigh on its recovery from the pandemic, says Sam Miley, economist at the Centre for Economics and Business Research.

Miley explains:

The downtick in economic output in Q4 reflects the widespread reimplementation of Covid-19 contain measures across the continent, though does mask varying degrees of restriction severity across member states.

This downward pressure on economic output looks set to continue in early 2021 due to the clampdown on new, more virulent strains of coronavirus, while subdued economic activity could continue for an even more protracted period in light of the eurozone’s relatively slower rollout of vaccinations.”

Miley adds:

Though mass vaccination should facilitate the phasing out of restriction measures, the fact that rollout is currently slower in the eurozone suggests that the economic benefits will be somewhat less pronounced than elsewhere. This is reflected in the most recent Cebr forecasts which, although pointing to an annual growth rate of 5.1% across both the eurozone and the UK in 2021, show considerable divergence from 2022 with the former set to grow by just 2.7% compared to 6.6% for the latter.

Indeed, the extent to which the eurozone could suffer from a prolonged period of subdued economic activity is further highlighted by our full year GDP forecasts, which suggest that output in the eurozone will not exceed the levels seen in 2019 until the mid-2020s.

11.42am GMT
11:42

Several more economists are warning that the eurozone is probably in a double-dip recession now – although it won’t be as sharp as last year’s downturn.

Christoph Weil, economist at Commerzbank, predicts that eurozone GDP will keep shrinking in the January-March quarter, following the 0.7% decline recorded in October-December.

“In the first quarter of 2021, the decline is likely to be somewhat steeper.

However, there will not be a slump like the one in the first half of 2020. Instead, a noticeable recovery is likely to set in again from the spring,”

Economist Julian Jessop thinks a double-dip recession (two quarters of negative growth) is ‘almost certain’.

Julian Jessop
(@julianHjessop)

First estimates show #GDP fell 0.5% q/q in Q4 2020 in the EU and by 0.7% in euro area.

This is actually not as bad as feared, but makes it almost certain that the EU is in a double-dip recession.

UK data (12th Feb) should be better (c.+0.5%), partly due to timing of #lockdowns

February 2, 2021

Pantheon Macro
(@PantheonMacro)

“Decent, all things considered, but the EZ is now likely in a double-dip recession.” @ClausVistesen on Eurozone Advance GDP, Q4 #PantheonMacro

February 2, 2021

11.02am GMT
11:02

Here’s Joseph Little, Global Chief Strategist, HSBC Global Asset Management, on the 0.7% drop in eurozone GDP last quarter:

“The negative Q4 GDP print is confirmation of what investors already knew – a double dip recession in Europe at the end of 2020, with that weakness continuing through Q1.

The live question for investors is what the delays in vaccine distribution and virus trends means for the growth outlook as we go through the year. We think the picture should improve through the summer, and that facilitates a “catch-up” phase of growth for Europe in H2.”

11.01am GMT
11:01

Bert Colijn, economist at ING, predicts that the eurozone economy could shrink again this quarter, on top of the 0.7% contraction recorded in the last three months.

That would put the eurozone into another technical recession (two quarters of negative growth), having already suffered one in the first half of 2020.

But, Colijn also points out that the fall in GDP in October-December was less severe than in the first lockdown.

That’s because some eurozone industries kept running, other economies outside Europe were open, and UK firms were stockpiling before the Brexit transition period ended.

Colijn writes:

First of all, restrictive measures have been adapted and have become milder compared to the first wave. Think of countries like France and Spain, for example, where industry and construction have remained largely open over the course of the quarter. This has had a very positive effect on GDP, especially because demand for goods and construction has remained strong despite lockdowns in place. Mobility, the movement of people which was largely correlated to GDP growth in the first wave, was also stronger in the fourth quarter than during the first wave, which also supported economic activity.

What also helps is that the rest of the world is still open. Compared to the first wave, when supply chain problems and lockdowns globally caused a huge drop in external demand, the second wave is quite different. Outside of the eurozone, most economies have remained largely open and 4Q benefited from strong demand from countries like China, and from a stockpiling effect in the UK ahead of the end of the transition period. That has resulted in rather favourable monthly export figures and boosted industrial production.

But while manufacturing has limited the downturn, ongoing lockdowns mean it is “likely that another quarter of falling GDP will follow”, he adds.

ING Economics
(@ING_Economics)

The drop in eurozone GDP was mild in the fourth quarter. @Bertcolijn explains why https://t.co/ERxmdZCyoY

February 2, 2021