Stocks Decline As Traders Focus On Europes Vaccination Problems

Stocks Lose Ground In Premarket Trading

S&P 500 futures are losing ground in premarket trading after yesterdays strong upside move. On Thursday, stocks received material support after the release of better-than-expected Initial Jobless Claims and Continuing Jobless Claims reports which showed that the job market had started to stabilize after the blow dealt by the second wave of the virus.

Today, traders focus shifted to the problems on the mass vaccination front, which are especially visible in Europe, and the uncertainty regarding timing and size of the new U.S. stimulus package.

It should be noted that S&P 500 is located close to all-time highs despite the recent pullback so stocks may need additional catalysts in order to get to the test of the 3900 level.

GameStop Drama Continues

Yesterday, Robinhood and other brokerages imposed limits on trading in ultra-speculative stocks like GameStop, AMC Entertainment Holdings, Koss Corporation and some others due to increased clearing house requirements. This move caused a sell-off in stocks promoted by retail investors on Reddit and other platforms.

However, traders are expected to be able to buy these shares again today, and these “Reddit stocks” are showing huge gains ahead of the market open.

The GameStop phenomenon will certainly remain an important topic for the market in the upcoming weeks. However, it is not clear whether wild fluctuations in specific shares with strong concentration of short positions will be able to have any notable impact on the general market.

Personal Income Grew By 0.6% In December

The U.S. has just provided Personal Income and Personal Spending reports. Personal Income increased by 0.6% month-over-month in December compared to analyst consensus which called for growth of just 0.1%.

Meanwhile, Personal Spending declined by 0.2% compared to analyst consensus which called for a decline of 0.4%.

The recent economic reports show that the economy may be in a better shape compared to analyst expectations despite the negative impact of the second wave of the virus.