Plus, GameStop shares are down, Tesla got a price target boost, and Virgin Galactic shares skyrocket after the company announced it will soon redo its December test flight.
Stocks were higher to start Monday with the Dow adding 110 points, or 0.4%. The S&P 500 gained 0.9%, while the Nasdaq rose 1.4%.
Redditors have moved on to Silver. Spot silver prices jumped as much as 13% this morning to $30.35 an ounce, marking the biggest one-day pop in silver on NYMEX since a 13% spike in March 2009 following a weekend buying binge that overwhelmed online sellers of silver coins and bars globally. Like last week’s buying stampede in GameStop and other heavily-shorted small cap stocks, the rise in silver can be traced to Reddit’s WallStreetBets forum, with one post declaring the metal “THE BIGGEST SHORT IN THE WORLD.” Silver mining stocks like Coeur Mining and Pan American Silver surged alongside the metal. “It’s a very different target, but the fact that you can move silver, such a large market, is an indication to everybody that they have to take these new technicals seriously,” said Allianz chief economic advisor Mohamed El-Erian.
Speaking of GameStop, the stock that captivated the market last week dropped as much as 34% this morning after rising more than 1,587% over the last month amid the frenzy driven by the WallStreetBets subreddit. Last month’s astronomical rally has inflicted a mark-to-market loss of nearly $20 billion to hedge funds with short positions against the stock, according to data from S3 Partners, though many short sellers continue to hang on to their bearish bets. Robinhood and other trading platforms are continuing to limit buying of GameStop shares and options contracts, with limitations also in place for AMC Entertainment, BlackBerry, Koss, Express, Nokia, Genius Brands, and Naked Brand Group.
President Joe Biden will meet with 10 Republican senators today as he decides whether to reduce his coronavirus relief proposal to win GOP support or forge ahead without them. Over the weekend, the group of Republicans put forward a counterproposal to Biden’s $1.9 trillion plan, with a $618 billion package that includes smaller direct payments to most Americans, reduced federal unemployment benefits, a smaller $20 billion for a national vaccine program, and doesn’t include any state and local government support. “I support passing COVID relief with support from Republicans if we can get it,” Biden said on Friday. “But the COVID relief has to pass, there’s no ifs, ands or buts.”
Tesla shares are up more than 4% at the time of writing following Piper Sandler analyst Alexander Potter doubling his price target on the stock to a Street-high of $1,200 from $515. In a 103-page report, Potter said the “fireworks aren’t over” for Tesla, with the company targeting multi-trillion dollar markets. “With Tesla’s target industries still embracing outdated business models, it may be decades before this company runs out of new opportunities to pursue,” Potter said in the report, while maintaining his Buy rating on the stock.
And Virgin Galactic shares are up nearly 17% this morning after the company announced that it will redo its aborted December flight test as early as February 13. The space tourism company noted one of the spaceflight tests’ key objectives “will be to test the remedial work that has been completed since… the onboard computer halted ignition of the rocket motor.” Virgin Galactic said in a press release, “The team has since conducted the root cause analysis, completed he corrective work required, and carried out extensive ground testing. The next stage will be to assess and verify this work during a rocket-powered flight.”
Stocks We’re Watching
SOS Limited (NYSE: SOS): SOS shares gained as much as 35% on Friday after the company announced that it has completed the initial steps of the execution of its blockchain strategy, and successfully developed cutting-edge firewall system, personal biological information storage system, and antivirus system all of which are based on blockchain and AI. “R&D is our lifeblood and our growth engine,” said SOS Chairman Yandai Wang in a statement. “We anticipate investing 15% of our revenue in R&D and the annual growth of R&D budget to be over 10% in each of the next 5 years.”