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30 Jan 2021
3 min read

Week in Review

Week in Review

*OspreyFX would like to state that traders should research extensively before following any information given hereby. Any assumptions made in this article are provided solely for entertainment purposes and not for traders to guide or alter their positions. Please read our Terms & Conditions and Risk Disclosure for more information.

Key Takeaways

  • A very unique week for the markets
  • Elon Musk creates another whirlwind

A wild week of trading shook up the markets. Vaccine shortages across EU member states, a persistent pandemic on the global front, and uncertainty surrounding the $1.9tn stimulus package for the US economy. European markets struggled for gains and ended one of their worst weeks since October. The US broader market also suffered losses. These are only some of the highlights that caught investors’ attention.

The big action centered around individual stocks with a battle taking place between Wall Street money managers and an army of retail traders. Stocks like GameStop, AMC, and BlackBerry surged to all-time highs and posted outsized gains day in and day out as Reddit day traders piled onto them in a joint effort to take on large hedge funds that had positions against these companies. Reportedly, Melvin Capital, a hedge fund managing over $13bn, closed its short position in GameStop on Tuesday, realizing a loss of a few billion dollars. That was not enough for traders and investors who pushed the stock higher as the week unfolded. As a result, some brokers restricted the buying of shares in these companies. The ban was lifted on Friday and the same stocks continued their wild gyrations.

A Frenzied Friday for Crypto

Additionally, on Friday, the cryptocurrency market suddenly became a place of high interest when billionaire entrepreneur Elon Musk changed his Twitter bio to a single word that said: #bitcoin. The seemingly small action by the Tesla CEO was enough to send the number one cryptocurrency higher by nearly 20% less than a few hours after the change. Bitcoin spiked from $32,000 to $37,000 in the moments following Elon Musk’s announcement.

Other assets that witnessed positive momentum were gold and silver. Gold moved higher on the week, along with silver which caught the attention of retail traders, who were calling silver their next short squeeze.

In other news, Tesla, Apple, and Facebook reported their earnings for the fourth quarter of 2020. While they all posted record numbers in some categories, shares of the companies fell in the first session following the reports. The first meeting in 2021 for the FOMC concluded on Wednesday. The US Federal Reserve decided to hold the interest rate unchanged while its monetary policy remains on course.

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