CNN Business/Matt Egan
Silver surges as Reddit army targets precious metals
Move over GameStop, Reddit mania is spreading to the precious metals market.
Silver futures surged as much as 8.5% to above $29 Sunday evening, touching five-month highs. That follows a 6% rally last week.
Meanwhile, retail sites warned customers over the weekend they could not meet skyrocketing demand for silver bars and coins. And “#silversqueeze” is trending on Twitter.
In more recent trading, silver futures were up 6.5%.
The moves provide another example of the power of a group that has captivated Wall Street and Main Street: WallStreetBets. The Reddit forum sent GameStop (GME), AMC (AMC) and other heavily shorted stocks skyrocketing last week, roiling markets and crushing some hedge funds that had bet against those stocks. Robinhood, the free-trading app, came under fire after restricting trades in GameStop and other stocks.
People on WallStreetBets set their sights on silver and the iShares Silver Trust ETF (SLV) last week, with some suggesting it could be a way to hurt big banks they believe are artificially suppressing prices.
“SLV will destroy the biggest banks, not just some little hedge funds,” one WallStreetBets user wrote.
Another claimed JPMorgan Chase has been “suppressing metals for a long time. This should be epic. LOAD UP.”
Fox Business/Wall Street Journal
Vaccination delays put global rebound at risk
Timetables for vaccinating enough people to effectively curb Covid-19 are slipping in many countries, raising fears that a large portion of the world will still be battling the pandemic and its economic effects well into 2022 or beyond.
While the U.S. and some other mostly small countries are making progress toward vaccinating most of their populations by late summer, health experts and economists are concluding that much of the planet—including parts of Europe, Asia and Latin America—face a longer slog.
Places from Germany to Mexico are running into serious problems sourcing sufficient vaccines. Other countries with low caseloads are less pressed to start vaccination campaigns and aren’t eager to reopen borders anytime soon.
At the current rates of vaccination, only about 10% of the world will be inoculated by the end of the year and 21% by the close of 2022, UBS says. Just 10 countries are on track to vaccinate more than a third of their population this year.
The UBS data includes hard-hit middle-income countries like South Africa where vaccination rates are expected to be painfully slow, though some countries it measured are expected to increase the pace of vaccinations soon.
But richer regions like Europe are also facing delays. European officials in recent days watched as their goal of vaccinating 70% of the population by summer looked unachievable after doses ran out in some places with just 2% of EU residents covered so far.
The differing pace in vaccine roll outs world-wide raises the prospect of divergent economic fortunes for the world’s main economic blocs, at least in the near term. The U.S. economy could grow by 5.1% this year, according to International Monetary Fund forecasts, but recoveries of the eurozone and developing economies have become more uncertain given vaccination delays.
The U.S. and a few other countries could wind up enjoying many benefits of herd immunity but still be unable to fully mend their economies because they are waiting on other places to catch up. With borders shut globally, some businesses even in vaccinated countries will have to rely on domestic demand.
“So long as the pandemic terrorizes part of the world, normality will not be restored anywhere,” said Erik Nielsen, chief economist at UniCredit Bank.
CNBC/Evelyn Cheng and Yen Nee Lee
New chart shows China could overtake the U.S. as the world’s largest economy earlier than expected
China is set to overtake the United States as the world’s largest economy a few years earlier than anticipated due to the coronavirus pandemic, analysts said.
The U.S. reported last week that gross domestic product in 2020 contracted by 2.3% to $20.93 trillion in current-dollar terms, based on a preliminary government estimate.
In contrast, China said its GDP expanded by 2.3% last year to 101.6 trillion yuan. That’s about $14.7 trillion, based on an average exchange rate of 6.9 yuan per U.S. dollar, according to Wind Information data.
That puts China’s economy at only $6.2 trillion behind the U.S., down from $7.1 trillion in 2019.
“This (divergence in growth) is consistent with our view that the pandemic has been a much larger blow to the US economy than China’s economy,” Rob Subbaraman of Nomura said in an email Friday. “We believe that on reasonable growth projections the size of China’s economy in USD terms will overtake the US in 2028.”
If the Chinese currency strengthens further to around 6 yuan per U.S. dollar, China could surpass the U.S. two years earlier than anticipated — in 2026, Subbaraman said.
The yuan began strengthening against the U.S. dollar in the last six months to levels not seen in more than two years.
Stocks could see a near-term pullback on loss of momentum, strategist says
Stocks could be in for some near-term pain.
Surging trading volumes have caused wild swings in the stock market in a week packed with earnings, and there could be more downside in store, strategist Katie Stockton told CNBC’s “Trading Nation” on Thursday.
The last week of trading has created some “concerning” divergences in the market, said Stockton, founder and managing partner of Fairlead Strategies.
“Equal-weight benchmarks have started to really peter off in terms of momentum and now, of course, the major indices reflecting mostly large caps, like the S&P 500, have come off from their highs on a loss of short-term momentum as well,” she said. “We’re starting to see, really, a chink in the armor of the market.”
Post-earnings declines in heavyweight stocks such as Apple and Tesla also suggest that some of the market’s most popular names may be getting overbought, Stockton said.