The data and earnings calendars are boring in the dog days of summer. Ryan Cohen’s pump-and-dump of Bed Bath & Beyond stock looks to have spilled over into crypto markets, as his retail investor followers had to cover losses. Kohl’s and Xiaomi reported weak profits, sending stocks lower. Deere and Foot Locker reportsAs Rhine water levels rise, European electricity prices fall, but a drought in China reduces Yangtze basin factory output. Here’s everything to know about markets on August 19.
1. Bloodbath
Chewy’s (NYSE:CHWY) creator Ryan Cohen sold his entire share in Bed Bath & Beyond, making an estimated $60 million in five months.
The action ended a three-week short-squeeze on the “meme” stock, which retail investors had aggressively fuelled in the hope that Cohen – who became chairman of GameStop (NYSE:GME) after collecting a stake in a similar manner – would stay on board to supervise a turnaround at the struggling retailer.
This feels hopeless. Still losing consumers, the corporation hasn’t replaced its CEO.
Cryptoliquidations
BBBY stock’s sudden reversal may have contributed to a bad day for cryptocurrencies.
Coinalyze revealed hundreds of millions of dollars in crypto liquidations in the hours after the publication, but that may have included unrelated selling out of Asia. Bitcoin lost 7.6%, while Ethereum fell 6.2%.
Buterin, Ethereum’s founder, warned on Wednesday that the long-awaited switch to a system that needs less energy to generate new currencies won’t reduce so-called “gas costs,’ the payments individuals make to complete a blockchain transaction.
3. Stocks to open lower; Kohl’s, Xiaomi tank; Deere in focus.
Due to the Fed’s hawkishness, U.S. stock indexes are likely to give up most of their gains from the middle of the week right away.
Dow Jones futures were down 205 points (0.6%) at 06:15 ET (10:15 GMT), S&P 500 futures were down 0.8%, and Nasdaq 100 futures were down 0.9% at 06:15 ET (10:15 GMT).
Late Thursday, Applied Materials (NASDAQ: AMAT) reported earnings that exceeded expectations; Deere (NYSE: DE), Foot Locker (NYSE: FL), and Madison Square Garden (NYSE: MSGS) reported before the open.Xiaomi (OTC: XIACY) reported an 83% drop in profit and a 20% drop in revenue overnight, which may have an impact on chipmaking and electronics.Kohl’s (NYSE:KSS) also fell Thursday.
Yangtze dries, Rhine heals
Rainfall late last week allowed German authorities to expect a major rise in Rhine water levels next week. They had fallen so low in recent weeks that several southern German power reactors couldn’t accept coal and heating oil shipments along the key river.
Surging energy prices were noticeable in another set of German producer pricing data, which kept pressure on the ECB to hike rates by 50 basis points in September. Consumer confidence in the U.K. has fallen to a new low.
The European drought isn’t unique. The Yangtze River in China has dipped to half its average depth due to a drought, cutting hydropower supply and prompting enterprises to cut or stop output. The AP said thousands of factories in Sichuan and Chongqing shut down for at least six days this week.
5. Oil loses ground on a strong currency and economic worries.
As worries about the global economy deepen, crude oil prices fell further on Friday. A rising currency makes oil more expensive for non-dollar-based economies.
By 06:30, U.S. crude futures were down 1.8% to $88.93 a barrel, and Brent was down 1.8% to $94.89 a barrel.
As Russia’s threats against the Zaporizhzhya nuclear reactor failed to materialise, tensions subsided. Reports that Russia’s shipments surged in July after being rejected by Europe, Japan, and the U.S. also weighed on prices.
