(DAILY NOTION): Wall Street Bounced Back To Close Higher, Next Mover: What's Next for the GameStop Saga?

NASDAQ 100 (as of Jan 29, 2021 at 10.10 a.m.)

Source: Yahoo Finance

SPX 500 Futures (as of Jan 29, 2021 at 10.10 a.m.)

Source: Yahoo Finance

US30 Futures (as of Jan 29, 2021 at 10.10 a.m.)

Source: Yahoo Finance

Wall Street experienced gains as the US30 led the way when it gained 0.99%, followed by the SPX500, which rose 0.91%. NAS100 followed suit by rising 0.50%.

The U.S. gross domestic product (GDP) recorded a 4% growth in the final quarter of 2020, amidst heightened holiday activity and spending. This report benefited cyclical stocks, which are stocks that move in line with the economy, with prospects of better days ahead.

However, the Wall Street Journal also reported that overall, the U.S. economy experienced a 3.5% contraction, making it the worst year since the post-World War 2 period in the 1940s. The Washington Post also reported that there are still 23.8 million adults struggling to make ends meet, as 9.8 million jobs are still missing. The latest initial jobless claims report shows that another 847,000 Americans filed for unemployment last week.

Looking towards the earnings report, Apple beat estimates for its sales and earnings in the fourth quarter. Similarly, Facebook also reported a higher fourth-quarter profit year-on-year and beat expectations of its earnings and revenues. However, it followed its results with a grim warning of an uncertain 2021.

After a heated battle of ‘Wall Street vs Main Street’ as the GameStop frenzy took the world by storm, it is appearing to be cooling off when shares in GameStop Crop and AMC Entertainment Holdings dropped more than 40% with Robinhood and Interactive Brokers halting trading of GameStop for several hours.

As the world continues to pivot this year, the GameStop saga points towards a truth that is appearing clearer every day: that there are always new players sprouting that has the ability to disrupt the traditional financial market. As the world gets more digitalised and without boundaries, it also shows that the ‘old’ must pivot to survive the times. This applies even to the sturdy Wall Street. David Wilcox, a senior fellow at the Peterson Institute for International Economics and former director of the domestic economics division at the Federal Reserve believes that the year 2020 has no precedent in modern economic history. Wise words, indeed.

FOLLOWME User Sentiment (as of Jan 29, 2021 at 10.10 a.m.)

SPX500

Short – 76.32%

Long – 23.68%

NAS100

Short – 68.46%

Long – 31.54%

US30

Short – 69.60%

Long – 30.40%