Market Wrap

Market Wrap: 'Big Short' star makes wild prediction, Amazon Prime Day surprise

Andrew Saks, Friday, 25 June 2021

Estimated reading time: 6 minutes

ETX Capital Market Wrap

Amazon's Prime Day event this week promised to be the company's largest ever after a bumper year. However, a sudden US antitrust probe caused AMZN to fall.

Meme stock rally – but this time for a real reason

'Big Short' star Michael Burry has employed his well-worn theory, which he had previously used to predict the sub-prime mortgage crunch, to predict a potential catastrophe resulting from the massive speculatory interest in meme stocks and cryptocurrency.

Those following the bizarre movements of meme stocks have loosely fallen into two camps: those driving volatility by taking to reddit and resharing the tweets of influencers, and those who steer clear and align themselves with the thought processes of Mr Burry. This time, however, a meme stock managed to move itself. GameStop sold over $1 billion of stock, resulting in their share price rising by 11% in just two hours on June 22. A company's policy determining its own stock price? Now there's a novelty : )

'Fred-in-a-shed' Scouser Mark Radcliffe pulls off £1 billion IPO

Everyone loves a sob story. The tabloid newspapers went to town on Mark Radcliffe, founder of billion retailer Victorian Plumbing which floated for £1 billion on London Stock Exchange's junior market last week – a record for that section of the market.

The amusing stories in the tabloids told of how Mr Radcliffe did odd jobs when he was 10 years old and had to make ends meet. However, the reality is that he is a very astute genius and a top-level business executive who knows exactly how the listing criteria set out by London's city giants works. Shares rallied at the start of trading and hats off to Mr Radcliffe who certainly hasn't seen his efforts go round the U-bend!

Britain's debt-to-GDP ratio approaches 100%

For those of you who wake up in the morning and then nod off again, all while thinking that 'working from home' is some form of new normal, a sobering statistic has emerged this week.

Britain's debt-to-GDP ratio is now very close to 100%, a figure that has not been this closely approached since the dark old days of the early 1960s. This was when the country was still repairing itself from the devastation of fighting the second world war, and socialist politics were rife with riotous workers unions and odd taxpayer-funded projects.

There was a time not too long ago when analysts in London would extend a derisory finger toward Greece and say, "those European Union states are in so much debt that we will pay for it forever." This eventually coined a phrase which has been used as a benchmark for economic inactivity – 'Greek Debt'. Nowadays, 'Greek Debt' is not that much higher than British debt and the finger-pointing has stopped.

In fact, if it were not for the City of London, the UK's debt would easily be as high as that of Greece, considering that the UK borrowed a further £2.4 billion in May 2021 alone.

There are still over 1.5 million people on furlough, with a huge amount of employed personnel doing less than half of their expected daily workload.

Even trade union-led France, with its 30-hour working week and two-month annual shutdown in the summer, is being approached by Britain's figures. France, a country with a high standard of living and short working hours, has a debt-to-GDP ratio of 115.3%. France is open for business as usual and not under lockdown. How long before parity is reached?

Mark your calendar

At 9.30am GMT on Monday June 28, Hong Kong will release its monthly exports figures, expected to be 24.4%. Then at 10.45am GMT, Italy will release its 6-month BOT auction.

On Tuesday, Japan will release its job-to-application ratio for May, which at a predicted 2.8% is not much different to April's figure of 2.9%. This metric will be announced at 12.30am GMT. A few hours later at 7.00am GMT, the island nation will also release its monthly retail sales data, likely to be up by a considerable margin to 11.9% compared to April's 7.9%.

7.45am GMT on Wednesday will reveal France's consumer spending for the month, expected to be down 8.3%. US crude oil inventories are predicted to decrease by 1.83 million barrels, this will be confirmed at 3.30pm GMT.

Thursday will set the stage for the Eurozone's latest unemployment data with an estimated 8% figure to be announced at 10.00am GMT.

And at 3.30pm GMT on Friday, the United States' nonfarm payroll numbers for May will be revealed – 559,000 job gains are expected.


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