The daily business briefing: February 1, 2021
Robinhood continues limiting trading of GameStop shares, Biden invites GOP senators to discuss coronavirus relief, and more
Robinhood to continue limiting GameStop trades
Robinhood plans to continue limiting trading of shares of GameStop, AMC Entertainment, and several other previously struggling stocks that have surged with a boost from Reddit's WallStreetBets forum. Investors will be allowed to buy just one share of GameStop stock on Robinhood, and five options contracts. The stock trading app previously limited trading of 50 stocks, but starting Monday the list will include only eight — GameStop, AMC Entertainment, and Nokia. GameStop shares gained 400 percent last week in volatile trading, capping a 1,625 percent rally for the struggling brick-and-mortar video game retailer as the Reddit forum urged people to buy the stock to defeat hedge funds betting that the stock would drop. Melvin Capital Management, one of the hardest hit funds, lost 53 percent in January.
Biden invites GOP senators to meeting on coronavirus relief
President Biden on Sunday invited a group of Republican senators to meet with him Monday to discuss his $1.9 trillion coronavirus relief plan and their $600 billion counterproposal. A White House official said Biden was open to negotiations, but the 10 Republican senators' relief package was "not going to scratch the itch." The White House said Biden would consider scaling down stimulus checks for families with incomes above $150,000 per year. One official said that Biden would not accept slashing months of unemployment insurance or spending to help schools reopen, as the GOP senators proposed. Vermont Sen. Bernie Sanders said earlier Sunday that Democrats appear to have the votes to approve Biden's COVID-19 relief package through a process known as reconciliation, which requires a simple majority.
Maine company tests rocket designed to put tiny satellites in orbit
Maine company bluShift Aerospace on Sunday launched a 20-foot prototype rocket in the first major test of the system it is developing to put small satellites into orbit. The rocket reached an altitude of 4,000 feet carrying a science project by Fallmouth High School students that will measure barometric pressure and other flight metrics. The payload also will include a special alloy being tested by a New Hampshire company, and a Dutch stroopwafel dessert in honor of bluShift's Amsterdam-based parent company. The firm is among dozens trying to offer affordable ways to send so-called nano satellites into space. "There's a lot of companies out there that are like freight trains to space," said bluShift CEO Sascha Deri. "We are going to be the Uber to space."
Stock futures rise after last week's losses
U.S. stock index futures gained early Monday after volatile overnight trading. Futures for the Dow Jones Industrial Average were up by 0.7 percent several hours before the opening bell, after being down by as much as 1 percent. Futures for the S&P 500 and the tech-heavy Nasdaq rose by 0.9 percent and 1 percent, respectively. Wall Street last week suffered its biggest losses since October. Tobias Levkovich, Citigroup's chief U.S. equity strategist, said many stocks are overvalued and something like the recent volatility driven by retail traders could trigger a correction. "We think that the vulnerabilities are there," Levkovich said. The Dow dropped by 2 percent on Friday, closing below 30,000 for the first time since December.
Silver prices surge as Reddit squeeze spreads
Silver futures jumped by more than 8 percent early Monday, hitting five-month highs as the Reddit-fueled surge of downtrodden stocks spread to the precious metals market. It was the biggest rise for silver since 2013. Silver rose by 6 percent last week after people in the WallStreetBets Reddit chat room targeted the metal and the iShares Silver Trust ETF (SLV), saying that buying them would hurt big banks that were allegedly artificially keeping prices down. "SLV will destroy the biggest banks, not just some little hedge funds," one user posted. Some retail sites warned customers over the weekend they could not keep up with soaring demand for silver bars and coins.