Business & Investment

Stocks that were significantly shorted began to rise “off the chart” long before GameStop’s frenzy, according to Deutsche Bank.

Another busy week of earnings, US equities got off to a solid start.

Earnings aside, expectations that new stimulus will heat the US economy have sparked optimism. Treasury Secretary Janet Yellen said President Joe Biden’s $ 1.9 trillion bailout plan Restore full employment By next year.

Brent crude oil futures as a further sign of optimism about recovery
BRN00,
+ 1.85%

Reach $ 60 per barrel on Monday First time in over a year..US Treasury Yield
TMUBMUSD10Y,
1.156%

It rose to 1.20%.

Reddit-fueled GameStop
GME,
-5.47%

The frenzy seems to have cooled after a 78% drop in the share of a significantly short-circuited video game retailer last week and a 1,737% surge in the last three weeks.

In us Today’s call, Deutsche Bank
DB,
+ 2.03%

Strategists said the most deficient stocks have actually outperformed since March last year, long before Reddit’s WallStreetBets forum users aimed.

They said short stocks usually work well in a wide range of market rallies, but the size of the current rallies is “off the chart”.

Since the bottom of the market in March, the shortest stocks (defined as the top 10% of short interests as a percentage of market capitalization) have risen 245%, above the Russell 3000 index.
RUA,
+ 0.49%

147 percentage points.


Asset allocation of Compustat, Haver and Deutsche Bank

Led by chief strategist Binky Chadha, they said half of their outperformance happened before the November US elections and positive vaccine development.

They said outperformance could not be explained by a wide range of markets or “all recovery” and was not entirely due to the retail buying trend that has been accelerating outperformance since November.

“Even though the economic recovery has improved the outlook for these companies, the fact that short-term exposures continue to focus on low-margin and slow-growing equities, especially in pandemic-affected industries. It reflects, “they said.

Despite the beginning of the recovery, they pointed out that the shorts still focused primarily on the pandemic-affected industries, adding that there was strong skepticism about the recovery. “In our view, nine months after the end of the shortest recession, the consensus is persistently lagging behind the actual improvement in macro data.”

They also said that despite the third consecutive quarterly beat of S & P 500 companies’ “huge” record earnings, the 2021 consensus was slightly higher, well below their own forecasts. ..

market

Three major US benchmark indexes
DJIA,
+ 0.39%

SPX,
+ 0.37%

NQ00,
+ 0.23%

At the start of another busy week’s earnings, we made a modest profit in the initial trading.European stocks Climbed againDespite concerns about the spread of a new variant of the coronavirus that causes COVID-19.Asian market Significantly higher overnight This is because optimism about the recovery of the world economy is increasing.

Buzz

Bitcoin price
BTCUSD,
+ 11.75%

After Tesla hit a record high, soaring to $ 44,088
TSLA,
+ 1.50%

Said it has Acquired $ 1.5 billion The value of cryptocurrencies in January may accept digital assets for future payments.

Hyundai motor
005380,
-6.21%

On Sunday, he said he wasn’t talking to tech giant Apple
AAPL,
-0.50%

To Develop an autonomous electric vehicle, Contrary to multiple reports.

Social media platform Twitter
TWTR,
+ 1.87%

It is set to record it Second $ 1 Billion – Revenue Quarter When FactSet reported earnings on Tuesday, according to analysts surveyed.

The Biden administration will announce re-engagement this week United Nations Human Rights Council, US President Donald Trump withdrew almost three years ago, US officials said Sunday.

Apple Chip Supplier Dialog Semiconductor
DLG,
+ 16.04%

0OLN,
+ 16.83%

have Snapped up A € 4.9 billion ($ 5.9 billion) transaction by Renesas Electronics of Japan.

Tampa Bay Buccaneers dominated Kansas City Chiefs as quarterback Tom Brady Won his 7th Super Bowl title And his first with a team other than the New England Patriots.

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Stocks that were significantly shorted began to rise “off the chart” long before GameStop’s frenzy, according to Deutsche Bank.

http://www.marketwatch.com/news/story.asp?guid=%7B21005575-02D4-D4B5-4572-D26BAD28D9F8%7D&siteid=rss&rss=1 Stocks that were significantly shorted began to rise “off the chart” long before GameStop’s frenzy, according to Deutsche Bank.

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