US futures fall as the GameStop Frenzy grows

GameStop shares rose more than 100% premarket, after closing 44% on Thursday. AMC Entertainment rose nearly 60 percent before the opening bell.

Robinhood Markets, a popular place for online retailers, said late Thursday that it would restore some stock transactions that it had restricted earlier. American Airlines rose almost 10% of the premarket.

“The GameStop story, where you have retail investors who are a new player in the market, [is] one that people cannot ignore, ”said Luc Filip, head of private banking at SYZ Private Banking. “There are some key links to hedge funds that are short for those stocks.” These investors sell other long positions to close short positions that lose money, weighing the markets in general.

Stock markets shifted in January, hit by headlines about coronavirus vaccine supplies and stricter blockchains around the world. The Cboe Volatility Index, an indicator of market stress, rose 14% on Friday and rose more than 50% in January.

The earnings season continued, with most Chevron oil and construction equipment giant Caterpillar scheduled to report before the opening bell. Pharmaceutical company Eli Lilly and aerospace company Honeywell are also expected to make gains early in the morning.

Skyworks solutions,

a chip maker that supplies Apple,

rose nearly 13% in premarket trading after reporting gains after hours on Thursday that exceeded analysts’ estimates. Its board also approved a $ 2 billion share buyback.

Megacap technology companies slipped before the opening bell. Apple was down 1.2%, Microsoft was down 2.1%, and Google’s parent company, Alphabet, was down 1.8%.

“Those hedge funds that have been hit will have no choice but to get rid of some preferred holdings to raise this money,” to cover their short positions, said Seema Shah, chief strategist at Principal Global Investors, adding that it will see any other declines as a buying opportunity for technology stocks.

Abroad, the pan-continental Stoxx Europe 600 fell 1.2%. The relatively slow release of vaccines by the European Union and recent supply delays are raising concerns about prolonged blockages and weighing on markets, investors said.

Swedish telecommunications company Ericsson rose 7.7% after exceeding earnings and said it had gained market share. Meanwhile, Nokia‘s

shares listed in Finland increased by almost 5%. The US-listed shares of the mobile phone company have been among those affected by retail investors in recent days.

In Asia, most major landmarks have declined. The Shanghai Composite Index fell 0.6% and the Japanese Nikkei 225 fell 1.9%. The Kospi index in South Korea retreated 3%, the biggest daily decline in five months.

In the bond markets, the yield on 10-year US Treasury bonds rose to 1.071% from 1.055% on Thursday. The dollar strengthened, with the WSJ Dollar rising 0.1% to its highest level in five weeks.

The US Bureau of Economic Analysis will release the latest consumer spending data at 8:30 AM ET. Economists expect it to decline in December for the second month in a row due to rising virus cases, signaling a loss of momentum in the economy at the end of the year.

“We expect greater caution from the US consumer in the short term,” said Gero Jung, chief economist at Mirabaud Asset Management, saying this would affect the economic recovery, as consumer spending accounts for two-thirds of the country’s gross domestic product US.

Write to Anna Hirtenstein at [email protected]