Pull Your Head Out – It’s been a turbulent and fascinating week (Month? Year? How long is January again?) and given there’s still 2 hours left, who knows what’s still yet to come. January looked set to cruise (too soon?) to a comfortable monthly gain but that’s before the online army went nuclear. We’ll get to that but to quote an online daily, “The market needs to get a grip. GME and AMC are amusing to watch and created performance headwinds for some, but they are both meaningless distractions rather than an actual news story. On the busiest week of the Q4 season where companies are crushing expectations all anyone wants to talk about is the video game equivalent of Tower Records – people need to get their priorities in order.” About 1/3 of the way through earnings we’ve seen the standard top and bottom line beats but more encouragingly is earnings growth above 3% in aggregate and it’s not only tech doing the heavy lifting. There are a host of moving parts to juggle, with hedgies growing down exposure while others yell Buy the Dip! Earnings seemingly getting lost in the shuffle but perhaps they’re holding up a market that would be much worse off if the results weren’t as strong. And yet despite the stresses the market is feeling (a 76% jump in volatility this week), it’s largely held in there. That said, the market has broken its 50dma, a close of the futures below 3600 and 40 on VIX could portend trouble to come.
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