Thursday's session in the United States, although it ended with increases in major stock indices, failed to convince bulls to continue buying. Today, declines once again reign on the trading floors in both Europe and the US.
Futures in the United States seem to be down about 1 percent at the end of a very turbulent week in the local market.
The stock market turmoil has affected the silver market
The case may end up in the United States Senate and the prosecutor's office. We are talking about the reaction to increased volatility on individual stocks in the USA and the blocking of trading opportunities on individual platforms, as well as huge losses for hedge funds, which will long remember January 2021. This, in turn, could cause fears of even more regulation for hedge funds, which could make it difficult for them to do business. From there, the industry is expected to liquidate positions in all sorts of stocks, and this in turn could cause volatility to rise, as we wrote about yesterday. This in turn spoils the mood and may cause further declines of stock indices.
The turmoil on the American stock market also hit the silver market. Yesterday, investors on the largest group on Reddit were told to start investing in silver-based products, including individual companies and ETFs. As a result, the silver price jumped the strongest since August, breaking through the $26 per ounce level. Today, the price is trying to overcome the $27 level and thus is at its highest since the first week of January.
Has the German economy escaped recession?
In Europe, investors seem to be waiting for new economic data from major economies. Germany is expected to report fourth quarter GDP data. Recent data showed that France's GDP fell less than expected and Spain escaped recession.
Rising coronavirus infections and restrictions continue to weigh on investor sentiment, and the pace of vaccine introduction has been slower than expected. Vaccine suppliers AstraZeneca and Pfizer have announced a halt to shipments in recent weeks.
Elon Musk posted: #bitcoin
The price of bitcoin is also fluctuating strongly. It recently rose over $4,000 from $32,000 to over $36,000. This happened a few dozen minutes after... Elon Musk changed his description in Twitter to "#bitcoin". That was all it took for BTC/USD to make up most of its losses after an earlier 30% correction.
What happens in the second half of January 2021 will surely go down in financial market history, as these are unprecedented events where groups of investors on the internet or individual tweets are able to change the market picture in a matter of moments. It seems that all this is also a consequence of the fact that 2020 was the year of the largest inflow of individual investors into the financial markets.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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