The New York Stock Exchange, victim of great volatility, concluded its worst week in three months on Friday, shaken by the sling of vigilante stock marketers against hedge funds, forced to sell to cover their losses.
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According to final results at the close, the Dow Jones index lost 2.03%, dropping below the 30,000 point mark to 29,982.62 points.
The Nasdaq, with strong technological coloring, dropped 2.00% to 13,070.69 points and the S&P 500 dropped 1.93% to 3,714.24 points.
Over the week, the three indexes recorded losses of -3.27% for the Dow Jones, -3.48% for the Nasdaq and -3.31% for the S&P.
“We are witnessing a great reduction in risk. These investment funds are facing billions of dollars in losses and to cover these losses they have had to sell stocks where they had profits and long positions
,
”
explained Karl Haeling of LBBW who says there had
"a general directive"
from the "hedge-funds" to reduce their positions.
“It's all about Robinhood, GameStop, etc ... How are the funds going to fare now without creating losses when they still have a lot of short positions in other stocks?”
, asked the analyst.
Stock marketers, meeting in particular on a forum on the Reddit site, have launched for a week a fierce battle with large investment funds having bet down on inefficient companies such as the video game store chain GameStop or that of AMC movie theaters, by practicing short selling.
The SEC and justice get involved
US online brokers, like Robinhood and TD Ameritrade, have had to limit trading in these securities since Thursday to stem the rout.
These transaction restrictions have angered small holders while the policeman of the Stock Exchange - the SEC - justice in some cases such as Texas, and even Congress will look into these measures.
Some limitations imposed by brokerage platforms remained in place on Friday, but transactions had resumed as a whole.
GameStop continued to climb (+ 70% at closing) to 328.24 dollars on Friday as did AMC (+ 54%).
At the same time, the eleven sectors of the S&P 500 all finished in the red, those of energy (- 3.39%) and information technologies (-2.40%) leading the procession.
Usual tech headliners have declined, from Tesla (-5.02%) to Apple (-3.74%) to Facebook (-2.52%) and Microsoft (-2.92%) .
The VIX index, which measures volatility on Wall Street, has skyrocketed above 30%.
"I don't think it's a long-term event, but it will certainly be an important event next week
,
"
Karl Haeling told AFP.
Good news
For Art Hogan of National Securities, other factors were playing down, including the skepticism of some key congressmen over President Joe Biden's massive $ 1.9 trillion support plan.
The results season has also continued to be in full swing, with mixed results for Caterpillar (-0.81%) and Chevron (-4.27%) which are suffering from the crisis and for Colgate (-1.45%) who did better.
To read also: United States: Joe Biden announces a new emergency plan of 1.900 billion dollars
The US government has also published the figure for inflation which accelerated more than expected in December to + 0.4%, even if it is moderate over one year to 1.3%.
Among the good news, the incomes of American households rose in December for the first time since September, in part thanks to the 900 billion dollars aid plan adopted at the end of the year by Congress.
But their spending fell 0.2%.
And consumer confidence, which deteriorated in January, according to the University of Michigan barometer, is not likely to support consumption.
On the vaccine front, investors did not welcome the results of the trials of the Covid-19 vaccine from the American group Johnson and Johnson (-3.56%), with an overall effectiveness of 66% and even less good against the South African variant virus.
In the bond market, the 10-year yield on treasury bills accelerated upward to 1.0757% from 1.0449% the day before.