1. GameStop.
Keith Gill, better known as Roaring Kitty, published a series of social media posts last weekend, causing a spike up close to 2021 price levels, only to return by Friday close to its previous week price. The chart looks like a classic pump and dump scheme, this time driven by algorithms-trading rather than retail traders. You can see the spike and the almost instant fall of GameStop (ticker: GME).
2. U.S. Inflation Data
The U.S. PPI (producer price index - essentially the inflation from producers’ side) came higher than expected at an accelerating increase of 0.5% month over month versus 0.3% expected. Previous month reading was at -0.1%, therefore it is a sharp uptick. U.S. CPI (consumer price index - essentially the inflation from the consumers’ side) came a little cooler than expected at 0.3% (vs. 0.4% expected) but too far from the Fed (the U.S. central bank) to be in a position to cut interest rates anytime soon. Fed Chairman Powell reiterated that we will have to wait a little longer, because inflation is not moving down quickly enough.
3. Other News
The giant mining company Anglo American (ticker: AAL) refuses yet another large offer of the other giant miner BHP (ticker: BHP): £34 billion! This refusal of Anglo American’s board could potentially pave the way to a hostile takeover1.
The Cocoa Future price continues to decline and closed around $7,250 after a peak of around $11,500 reached mid-April. The price remains significantly higher in relation to the 2023 range of $2600 to $4000 due to a severe drought that affected cocoa production in West Africa. Cocoa production is highly dependent on the amount of rainfall.
Bitcoin seems to regain strength and reconquers the crucial $66,000-$67,000 but has to surpass the strong resistance at the $69,000-$70,000 (psychological level and 2021 high) level to confirm a continued uptrend. The next trading weeks will be crucial for the rest of the year’s price action.
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Definition of a hostile takeover (Investopedia): a hostile takeover occurs when an acquiring company attempts to take over a target company against the wishes of the target company's management. An acquiring company can achieve a hostile takeover by going directly to the target company's shareholders or fighting to replace its management.