Live Markets: FANGDD! Stock market or casino?

Fangdd Network

10/06/2020 09:25

* European shares edge higher
    * Banks lead gains
    * Fed wraps up its two-day meeting later in the day

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters. You can share your thoughts Joice Alves (joice.alves@thomsonreuters.com) and
Julien Ponthus (julien.ponthus@thomsonreuters.com) in London and Stefano Rebaudo
(stefano.rebaudo@thomsonreuters.com) in Milan.
    
    FANGDD! STOCK MARKET OR CASINO? (0810 GMT)
    With the retail frenzy in stock markets getting crazier day by day, a little known
U.S.-listed Chinese real estate company with the ticker  DUO.O  soared as much as 1200% on New
York's Nasdaq on Tuesday before calming down a bit and closing a mere 400% higher.
    You know why? It's the name, FANGDD Network. That name was enough for retail traders to
chase this stock on a day when FANG stocks powered Nasdaq above 10,000 points for the first time
ever.
    A London-based trader writes: "This particular 'FAANG proxy' has revs of $708 mln, net
profits of $62 mln and operates solely in China selling and renting houses. It does have a nice
picture of a kitten (image below) on its website though."
    It was likely "mistaken by Robinhood punters as a FAANG proxy", the trader adds. Robinhood
is an online brokerage.
    Apart from the incident being reminiscent of recent years in which punters chased any
company with "blockchain" in its name, the DUO stock move also reminds us of a recent tweet. 
    "There are two rules to investing: Stocks only go up, and if you have any problems, see rule
No. 1," Dave Portnoy, a widely followed person on Twitter recently posted.
    He claims to be a stock market trader. Portnoy has 1.5 million followers on Twitter, Reuters
has however not independently verified his identity.
    Here's a screenshot from the company's website (note the kitten):   
    

    (Thyagaraju Adinarayan)
    *****
    
    
    OPENING SNAPSHOT: RISK-ON MOOD IS BACK, FOR NOW (0733 GMT)
    European stocks are in positive territory after a two-days break, in a typical risk-on
session with cyclicals taking the stage.
    The STOXX 600 index is up 0.7% with banks  .SX7P  leading the gains up 1.5% as ECB officials
are drawing up a scheme to cope with potentially hundreds of billions of euros of unpaid loans.
 urn:newsml:reuters.com:*:nL8N2DM1R6
    Travel and leisure shares  .SXRTP , financial service sector  .SXFP  and insurers  .SXIP 
are also among the best performers.
    But investors are cautious about further medium-term gains, after the recent rally on
expectations of a quick economic recovery from the coronavirus crisis.
    The focus is on today's Fed meeting which is expected to give forecast about the U.S.
economy.  urn:newsml:reuters.com:*:nL1N2DM0J7
    In terms of single stocks, Commerzbank rises 3.9%, after investor Cerberus sent a letter
calling for changes to the board and strategy.  urn:newsml:reuters.com:*:nL8N2DN140
    
    (Stefano Rebaudo)
    *****

    
    
    
    ON THE RADAR: BANKS IN SPOTLIGHT (0640 GMT)
    European stocks are set to open slightly higher ahead of today's Fed meeting which will give
first projections about the U.S. economy since the coronavirus outbreak.
    On the corporate front, banks will be in the spotlight, as ECB officials are drawing up a
scheme to cope with potentially hundreds of billions of euros of unpaid loans, in a move aimed
at shielding commercial banks from any second fallout from the coronavirus crisis.  urn:newsml:reuters.com:*:nL8N2DM1R6
    Shares in Commerzbank  CBKG.DE  are up 2% in premarket trade, after investor Cerberus sent a
letter to the bank's supervisory board chairman calling for changes to the board and strategy.
 urn:newsml:reuters.com:*:nL8N2DN0OF
    U.S. Secretary of State Mike Pompeo chided British bank HSBC  HASBA.L  for backing moves by
China to end Hong Kong's autonomy, saying such "corporate kowtows" got little in return from
Beijing.  urn:newsml:reuters.com:*:nL1N2DM2HM
    Continental  CONG.DE  must save hundreds of millions of euros in costs and will probably
have to lay off workers due to a slump in demand caused by the coronavirus pandemic,
WirtschaftsWoche cited the CEO as saying.  urn:newsml:reuters.com:*:nL8N2DN0FW
    Shares in GAM Holding  GAMH.S  up 2% in premarket trade, after Chief Executive Peter
Henderson said in a newspaper interview that the asset manager was no longer actively looking
for a buyer or major strategic investor.
    Shares in Lufthansa fall 3.8% in early Frankfurt trade as the German government is planning
to extend the travel warning for tourists to third countries outside of Europe until August 3.
    Pandemic blows: Zara owner Inditex  ITX.MC  booked its first-ever quarterly loss.
 urn:newsml:reuters.com:*:nL8N2DN104 British fashion retailer Quiz will place its stores unit into administration and
then buy the business back so it can try to renegotiate better rental terms.
    Swedish private equity firm EQT aims to step up investments in France in areas such as
healthcare and energy infrastructure as it sets up a base in Paris despite the coronavirus
crisis.  urn:newsml:reuters.com:*:nL8N2DM5VT
    
    (Stefano Rebaudo)
    *****    
    
    
    
    MORNING CALL: CAUTION AHEAD OF FED ECONOMIC OUTLOOK (0532 GMT)
    European futures are in the black along with their U.S. peers, but investors remain cautious
after two weeks of gains turbocharged by last Friday's stronger than expected U.S. job data and
ahead of a Fed meeting tonight.
    No action is expected from the U.S. central bank, but market focuses on its economic outlook
as the Fed will publish first projections since the coronavirus pandemic set off a recession in
February.
    Asian stocks closed in positive territory overnight. On Wall Street, while the Nasdaq added
to its gains, the S&P 500 lost ground toward the end of trading.
    
    (Stefano Rebaudo)
    *****

    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Cyclical stocks    https://tmsnrt.rs/2YmFtdo
liquidity    https://tmsnrt.rs/2AMFP4J
banks    https://tmsnrt.rs/3h8uEE1
FANGDD    https://tmsnrt.rs/2UuXAwj
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Stefano Rebaudo, Joice Alves and Julien Ponthus)