Tag Archives: air

Business

Amid the GameStop-led frenzy, Jefferies says ‘plenty of air’ to come out of riskier assets. Another strategist says wait to buy the dip

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Markets are buckled into the fighting chair as another day of the retail-led feeding frenzy on shorted stocks is about to come online.

In case you thought the trading mania was a limited battle between internet day traders and Wall Street hedge funds: videogame retailer GameStop was one of the most traded stocks by value in the U.S. on Wednesday. 

Amateur investors, many based on the Reddit group WallStreetBets, are jumping into heavily-shorted stocks, driving prices to astronomical levels and forcing hedge funds to sell bigger, safer bets to cover losses.

Selloff is creeping to other investments and spooking sentiment. Major indexes took a 2% to 3% ride down on Wednesday and are set to continue surfing.

A must-read: Tendies? Diamond hands? Your guide to the lingo on WallStreetBets, the Reddit forum fueling Gamestop’s wild rise

Our call of the day comes from the U.S. equity researchers at Jefferies, led by global equity strategist Sean Darby, with a bonus call from Sébastien Galy, a strategist at Nordea Asset Management.

The team at Jefferies is clear that the correction in share prices has little to do with fundamentals. Rather, what’s happening is a reflection of a “sentiment shift within some of the more overbought and speculative parts of the market.”

The group’s retail speculative index, measuring the deviation from trend of assets where value is hard to determine, is high at 4 standard deviations. “Hence, there is plenty of air to come out of the riskier financial assets,” the team said.

Darby’s team noted that the short-term worry is whether the “popping” of riskier parts of the market will create a domino effect, as mainstream equities are liquidated to stem losses.

Galy, of the Nordic asset manager Nordea, echoes Jefferies’ caution about a wider selloff. He also says it’s too early to buy the dip, because there’s more to come.

The big moves to cover shorts at a time of high leverage typically forces more deleveraging, Galy said. This is because the constraint on capital from the risk of losses on investments is ratcheting up.

“As a consequence, the cost of hedging downside risk has sharply increased,” Galy said. “This risk reduction could last a few days followed by a sharp liquidity driven rebound in U.S. and to a lesser extent European stocks.”

Galy said that even a dovish Federal Reserve meeting on Wednesday couldn’t turn around this market, which is another signal that it may last.

The buzz

Shares in GameStop
GME,
+134.84%
touched the $500 level in the premarket before pulling back. The stock was just $19 heading into 2021. Fashion brand Nakd
NAKD,
+252.31%
is another stock making a big leap in the premarket, up 130%.

In a Securities and Exchange Commission filing this morning, cinema-theater chain AMC
AMC,
+301.21%
revealed that holders of the company’s convertible bonds have chosen to convert the notes into stock, as shares in the company have rallied around 330% since Tuesday. 

Apple
AAPL,
-0.77%,
Facebook
FB,
-3.51%,
and Tesla
TSLA,
-2.14%
posted earnings after the close yesterday. Technology giant Apple topped $100 billion in quarterly revenue for the first time, crushing expectations, as social-media company Facebook also beat estimates, with sales soaring 156% from “other revenue” — like virtual-reality headsets and video-chat devices. Electric-car maker Tesla reported its sixth straight quarter of profit, but it was a miss on expectations.

But if you can peel your eyes away from the stock market, it is a big day on the economic front. Initial and continuing jobless claims are due at 8:30 a.m. EST, with around 875,000 people expected to have filed for unemployment last week. Gross domestic product figures for the fourth quarter of 2020 will come at the same time, before new home-sales figures for December are reported at 10 a.m.

After the Federal Open Market Committee decided to hold monetary policy steady yesterday, Fed Chair Jerome Powell gave dovish signals that the central bank wasn’t done restoring the COVID-19 pandemic-ravaged economy to health. “We have not won this yet,” he said.

The markets

It looks like another wild day on Wall Street. Yesterday’s tumult saw the Dow Jones Industrial Average
DJIA,
-2.05%
tumble more than 630 points, and stock market futures
YM00,
-0.07%

ES00,
-0.31%

NQ00,
-0.90%
are pointing down, set to continue the selloff. Asian markets
NIK,
-1.53%

HSI,
-2.55%

HSI,
-2.55%
fell across the board and European indexes
SXXP,
-0.76%

UKX,
-1.13%

DAX,
-0.86%

PX1,
-0.17%
are firmly in the red.

The chart

Our chart of the day, from Marshall Gittler at BDSwiss, shows how the S&P 500
SPX,
-2.57%
dropped by the most since October 2020, and the VIX index of expected volatility saw its biggest one-day rise since the COVID-19 pandemic hit in March 2020. 

The tweet

When the sharks root for the fish. Billionaire entrepreneur and investor Mark Cuban — of “Shark Tank” fame — is rooting for Reddit’s WallStreetBets traders.

Random reads

An Oklahoma lawmaker has proposed a ‘Bigfoot’ hunting season with a new bill.

Key West wants to ban people from feeding fat, feral, free-roaming chickens.

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Health

Air pollution linked to increased risk of irreversible sight loss

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Researchers from University College London (UCL) found that even low exposure to air pollution across England, Scotland and Wales appears to impact the risk of age-related macular degeneration (AMD).

AMD is the leading cause of irreversible blindness among people over 50 in high-income countries. AMD is linked to the loss of central vision — needed for reading, performing fine detailed tasks and recognizing faces — and the biggest risk factors for the disease are genetics, old age and smoking.

Researchers found that people living in the most polluted areas were at least 8% more likely to report having the condition, in a study published Monday in the British Journal of Ophthalmology.

The team studied data from 115,954 people aged between 40-69, who had participated in the UK Biobank, a large study of half a million people focusing on the medical diagnoses and biological measurements of participants.

Using eye measurements and data from questionnaires, experts studied those who said they did and did not have macular degeneration, and then compared the results to the amount of pollutants estimated to be at their residential addresses.

“People who live in a more polluted area report macular degeneration more frequently,” Paul Foster, a professor of glaucoma studies and ophthalmic epidemiology at UCL and senior author of the paper, told CNN.

Foster said that the main pollutants linked to macular degeneration were particulate matter PM2.5, nitrogen dioxide and oxide nitrogen.

PM2.5 is tiny particulate pollution that can move deep into the lungs when inhaled and enter the bloodstream. The particles, made up of dust, dirt, soot or smoke, originate from construction sites, unpaved roads, fields, smokestacks or fires, and can contain different chemicals. But most particles are a mix of pollutants from power plants, industrial and vehicle emissions.

Nitrogen oxides refers to nitric oxide gas and nitrogen dioxide gas, as well as other gaseous oxides containing nitrogen. The main source of these gases in urban areas are motor vehicle exhausts, indoor gas stoves and kerosene heaters.

Foster told CNN that the pollutants enter the body through the lungs, and seem to cause particular damage to the eyes because of high blood flow in the eye wall.

“It’s people breathing the stuff in, and it going down into the lungs, being absorbed into the blood, carried round in the blood,” he said.

“There’s definitely a relationship between the more disadvantaged members of society and higher risk of getting this condition,” he added.

Air pollution kills an estimated seven million people worldwide every year, according to the World Health Organization (WHO), which says such deaths occur largely as a result of increased mortality from stroke, heart disease, chronic obstructive pulmonary disease, lung cancer and acute respiratory infections.

WHO data shows that nine out of 10 people breathe air that exceeds guideline limits on high levels of pollutants.

Chris Inglehearn, a professor of molecular ophthalmology at the University of Leeds said that the UCL research is similar to a 2019 study from Taiwan. “Both show a link between air pollution and age-related macular degeneration, a common cause of blindness in older people,” he told the Science Media Centre.

“The profile of pollutants the two groups looked at is slightly different but the source is the same, combustion. Of course, correlation does not prove causation, but the fact that these two independent studies reach similar conclusions gives greater confidence that the link they make is real,” Inglehearn, who was not involved in the UCL study, said.

Inglehearn said such studies “provide further evidence that links air pollution with detrimental impacts on human health.”

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Science

Groundbreaking New Laser System Cuts Through Earth’s Atmosphere Like It’s Nothing

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To artists and romantics, the twinkling of stars is visual poetry; a dance of distant light as it twists and bends through a turbulent ocean of air above our heads.

Not everybody is so enamoured with our atmosphere’s distortions. To many scientists and engineers, a great deal of research and ground-to-satellite communication would be a whole lot easier if the air simply wasn’t there.

 

Losing our planet’s protective bubble of gases isn’t exactly a popular option. But Australian and French researchers have teamed up to design the next best thing – a system that guides light through the tempestuous currents of rippling air with the flick of a mirror.

The result is a laser link capable of holding its own through the atmosphere with unprecedented stability.

While astronomers have a few tricks up their sleeve to correct for the atmosphere’s distortions on incoming light, it’s been a challenge to emit a coherent beam of photons from the ground to a distant receiver so they keep together and on point.

Keeping transmissions on target and coherent – with their phases remaining neatly in line – through hundreds of kilometres of shifting air would allow us to link highly precise measurement tools and communications systems.

Satellites could probe for ores or evaluate water tables with improved precision. High-speed data transfer could require less power, and contain more information.

Lead author Ben Dix-Matthews, an electrical engineer with the International Centre for Radio Astronomy Research in Australia, explained the technology to ScienceAlert.

 

“The active terminal essentially uses a small four-pixel camera, which measures the sideways movement of the received beam,” says Dix-Matthews.

“This position measurement is then used to actively control a steerable mirror that keeps the received beam centred and removes the sideways movement caused by the atmosphere.”

In effect, the system can be used to compensate for the warping effects of the moving air in three dimensions – not just up and down, or left and right, but along the beam’s trajectory, keeping the link centred and its phases in order.

So far it’s only been tested across a relatively short distance of 265 metres (about 870 feet). About 715 metres (just under half a mile) of optical fibre cable was run underground between the transmitter and receiver to carry a beam for comparison.

The results were so stable they could be used to connect the kinds of optical atomic clocks used to test fundamental physics, such as Einstein’s theories of relativity.

With the proof of concept demonstrated, there’s no reason to think a similar technique won’t one day be aiming for the sky, and beyond. Though there are a few hurdles that need to be overcome first.

 

“During this experiment we had to do the initial alignment by hand, using a visible guide laser that was in line with the stabilised infrared beam,” Dix-Matthews told ScienceAlert.

“When making links between optical atomic clocks, it would be good to have a way of doing this coarse alignment more easily.”

Fortunately Dix-Matthews’ French collaborators are working on a device that will speed up the initial coarse alignment process, promising a second generation of laser link technology that won’t require such an involved set-up.

The team also found temperature variations in the equipment affected the phase’s stability, limiting the duration of the signal to around 100 seconds. This hurdle will also be the focus of future improvements.

We might not need to wait long. The researchers are already making headway on upgrades for their system.

“We have started using a high-power laser amplifier that should help us deal with the larger power losses expected over longer distances, such as to space,” says Dix-Matthews.

“We have also completely rebuilt our active terminal to make it more sensitive to low received powers and make it more effective at cancelling out the movement of the received beam.”

With orbiting technology rapidly becoming a major focus for many data providers, potentially filling our skies with satellites, innovations that make linking communications systems across our atmosphere will only become more sought after.

As useful as our atmosphere is for, well, keeping us all alive, there are certainly some downsides to being buried under a restless blanket of warm gas.

This research was published in Nature Communications.

 

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