Archives of “February 4, 2021” day

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Hedge fund made $700 million on GameStop (pro-tip: this is what HFs are supposed to do)

  
  Analysis

Senvest Management began buying stock in GME in September 2020, not getting caught up in the short-selling mania in the company.

Their work included:
  • speaking with management
  • assessed competitors
  • noted the involvement of activists in the stock
  • By the end of October, Senvest owned more than 5% of the company, paying under $10 a share for the bulk of the stock.
  • They thought that if GameStop could hold on until the next generation of videogame consoles came out and stoked demand for games and accessories, the company would get a boost. And they reasoned that if Mr. Cohen could help transform GameStop from a largely bricks-and-mortar operation into an online gaming destination, the company could be worth far more.

China’s PBOC digital yuan may mean the country relies less on SWIFT (and thus the US)

  
  Analysis

The Economist have a brief piece up on the testing of the  People’s Bank of China’s testing out of digital yuan.

It touches on some of the implications but this is of much interest:

 

  • The digital yuan … will also give China a conduit for moving money across its borders without having to rely on swift, a global payments system that comes under American influence.

 

Here is the link to article (may be gated)

Here is what’s on the economic calendar in Asia today – 4 February 2021

  
  Analysis

None of these are likely to move FX much upon release.

2145 GMT New Zealand building permits for December, prior +1.2% m/m

2350 GMT Japan international securities flows for the week

0000 GMT New Zealand ANZ business survey for February, preliminary

  • Business Confidence prior 9.4
  • Activity Outlook prior 21.7

0030 GMT Australia trade balance for December 2020

  • expected surplus AUD8750m
  • prior +AUD5022m
  • exports expected +6%, prior +3%
  • import expected -2%, prior +10%
  • Exports remain a bright spot for the Australian economy

0030 GMT Australia NAB business confidence and business conditions for Q4 2020

 

  • Note, we get this data monthly from the NAB, so today’s data based on q/q change
  • The quarterly survey does have the advantage of more respondents (surveys 600 companies)

Major indices close mixed and give up gains into the close

  
Analysis, US Market

S&P and Dow leads the way higher. NASDAQ closes lower on late day sell off

The major indices are closing mixed, but gave up most of the day gains into the close.

A look at the closing levels shows:
  • S&P index rose 3.77 points or 0.10% at 3830.08. The high price reached 3847.51. The low price extended to 3816.68
  • NASDAQ index fell -2.23 points or -0.02% to 3610.54. The high price reached 13723.83. The low price extended to 13585.34
  • Dow industrial average rose and 35.46 points or 0.12% to 30723.01. The high price reached 30793.41. The low price extended to 30521.31
Some earnings releases after the close include Qualcomm and PayPal.
Qualcomm:
  • adjusted earnings-per-share of $2.17 vs. $2.10 expected. Revenues came in a $8.23 billion vs. 8.27 billion estimate
  • They see 2nd quarter revenues of $7.2 billion – $8 billion which is higher than the 7.1 billion estimate
Shares of Qualcomm are down close to 7% after the close after the revenue miss ($-11.30 to $151.53)..
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