What Did the Stock Market Do? Jan. 27, 2021

Latest Updates:

Dow Sheds 600+ Points to Close Wednesday

[Wednesday, January 27, 4:02 pm]
Contributed by Sarah Smith

  • The S&P 500 closed lower by 2.56%
  • The Dow Jones Industrial Average closed lower by 2.05%
  • The Nasdaq Composite closed lower by 2.61%
  • The Russell 2000 closed lower by 2.08%

FOMC Decision Hits Stocks Wednesday

[Wednesday, January 27, 3:20 pm]
Contributed by Sarah Smith

It looks like investors were right this morning. Results today from the Federal Open Market Committee meeting of the Federal Reserve were in line with expectations. The Fed will maintain its near-zero interest rates, and reaffirmed it will not adjust these rates until the economy starts to recover.

So what has stocks slumping? One of the huge catalysts involved in these FOMC meetings is also the commentary. Today, in addition to discussing rates, the Fed had a chance to update investors on the state of the economy and labor market. Building on previous negative comments, committee members shared in a written statement that economic data has recently deteriorated.

All investors want is some meaningful sign of recovery… and a reason to believe a mass Covid-19 reopening is just around the corner. In the absence of that, the stock market slump today makes a whole lot of sense.

Naked Brands (NAKD) Stock Gets a Reddit Boost

[Wednesday, January 27, 3:14 pm]
Contributed by Sarah Smith

Naked Brands (NASDAQ:NAKD) is looking to shake off delisting fears and ride the Reddit wave higher. Today, shares are up 244%, pushing NAKD stock to $1.35.

Importantly, the Nasdaq Exchange requires that companies keep share prices above $1. Thanks to the rally today, Naked Brands looks compliant. How long it can maintain these new prices remains to be seen, however.

So what is behind the meteoric rise? As InvestorPlace contributor William White wrote, it looks like NAKD stock could be one of the next steps on the r/WallStreetBets train. After finding great success with GameStop (NYSE:GME), many investors are looking for the next hit. We have already seen similar moves in AMC Entertainment (NYSE:AMC), Tootsie Roll (NYSE:TR) and even Eastman Kodak (NYSE:KODK). Now, it looks like Naked Brands could be the next winner.

For more, read the InvestorPlace.com brief on NAKD stock here.

Midday Update: Stocks Remain in a Slump

[Wednesday, January 27, 1:14 pm]
Contributed by Sarah Smith

  • The S&P 500 is down 1.53%
  • The Dow Jones Industrial Average is down 1.09%
  • The Nasdaq Composite is down 1.2%
  • The Russell 2000 is down 0.3%

Bitcoin: What Happens Next After Dip to $30,000?

[Wednesday, January 27, 1:12 pm]
Contributed by Sarah Smith

Bitcoin (CCC:BTC) made waves this morning in the crypto world as the leading digital currency neared $30,000. This comes after the crypto doubled in just a matter of weeks, hitting an all-time high above $42,000. Leading up to this point, bulls have been confident in the long-term catalysts. There is growing institutional support for cryptocurrencies. Fears of inflation are also growing stronger, particularly as President Joe Biden recommits to a robust stimulus package. However, some experts are not so sure about where Bitcoin will go next…

InvestorPlace contributor William White rounded up some of the most recent BTC calls today. For more, read that list on InvestorPlace.com here.

AMC Entertainment Shines on Wednesday

[Wednesday, January 27, 10:28 am]
Contributed by Sarah Smith

AMC Entertainment (NYSE:AMC) has completely eliminated its Covid-19 losses. In fact, as of Wednesday morning, AMC stock has surpassed its January 2020 prices. Although the actual movie theater business faces an uphill climb thanks to the pandemic, investors are confident. Whether you belong to the cult or not, there is no denying the role of r/WallStreetBets here. Determined to find the next GameStop (NYSE:GME), investors are flocking to AMC Entertainment.

Why? The movie theater operator shares many of the same turnaround factors. GameStop was similarly hurt by Covid-19, and now many investors are hoping for an e-commerce rebound. AMC Entertainment faced movie delays and business closures. Now, with a vaccine rollout underway and more stimulus coming, theaters could live to see another day. High short interest also supports the case for AMC stock.

Today, AMC stock is up more than 200% as it positions itself to be the next GameStop. Funnily enough, AMC Networks (NASDAQ:AMCX) is also having a curious day in the market. It appears that many Reddit-driven investors bought AMCX instead of AMC.

For more, read the InvestorPlace.com brief on the AMC hype here.

Dow Sheds 300+ Points at Market Open

[Wednesday, January 27, 9:31 am]
Contributed by Sarah Smith

  • The S&P 500 opened lower by 0.98%
  • The Dow Jones Industrial Average opened lower by 0.98%
  • The Nasdaq Composite opened lower by 1.09%
  • The Russell 2000 opened lower by 0.62%

3 Big Stories to Watch Today

[Wednesday, January 27, 9:27 am]
Contributed by Sarah Smith

  1. Boomers learn about Reddit… the hard way. All joking aside, old-school investors and institutions are getting a wake-up call this week. GameStop (NYSE:GME) looks ready to cross $300 at market open, the next leg in its meteoric rise. Behind it is what many have called a cult or an army of Redditors, who claim subreddit r/WallStreetBets as their home base. The latest news on this front is two-fold. On one hand, some big names like Chamath Palihapitiya and Elon Musk are aligning themselves with the GameStop frenzy. On the other hand, old-school firms like Citron Research and Melvin Capital are getting burned. As r/WallStreetBets cheers on news that Melvin Capital closed out its short position at a loss, everyone in Wall Street should be paying attention.
  2. The Federal Reserve. Perhaps less exciting than Reddit, but no doubt important, is the fact that the Federal Reserve will share updates from its Federal Open Market Committee today. Ahead of the decision on monetary policy, the major indices are struggling. In recent months, not much has changed at these meetings. In fact, the Fed has been staunchly committed to keeping rates at near-zero levels to push through the pandemic. However, those reminders of just how much the economy has suffered can feel like a punch in the gut. Keep an eye on the news for Fed updates.
  3. Climate. President Joe Biden is not backing down from tackling issues relating to climate change. In his first few days in office, he rejoined the Paris climate deal and scrapped the permit for the Keystone XL pipeline. Earlier this week, he sent electric vehicle stocks soaring on news he would electrify the federal vehicle fleet. Today, Biden is set to sign even more climate-related executive orders to make his priorities clear. These orders will establish climate change as a national security priority and cancel new oil and gas leases on federal land. Alternate energy stocks are stumbling in pre-market trading, but the long-term picture looks bright.

Stock Market Futures Point to Negative Open

[Wednesday, January 27, 8:00 am]
Contributed by Sarah Smith

  • S&P 500 futures are down 1.09%
  • Dow Jones Industrial Average futures are down 0.96%
  • Nasdaq Composite futures are down 0.64%
  • Russell 2000 futures are down 2.38%

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