Economy Is Rebounding Faster Than Expected, C.B.O. Says: Live Updates

The frantic price swings last week in stocks like GameStop and AMC Entertainment, led by retail traders aiming to take on Wall Street, have spread to a new target: silver.

The price of the precious metal jumped as much as 11.5 percent on Monday to the highest in eight years after online calls to create a “silver squeeze,” before giving up some of those gains later in the day. By midmorning, the price of silver was up 6 percent.

As silver spiked, shares of GameStop fell about 20 percent, retracing a small portion of last month’s surge. In the broader market, the SP 500 and European and Asian markets were all higher.

Retail websites for buying silver coins and bars said they were experiencing high demand and there would be delays in shipping orders. Moneymetals.com, a dealer in precious metals, said it was not taking new orders on most of its silver products on Monday and put some restrictions on gold purchases as well. APMEX, another dealer, said it had a surge of new customers over the weekend.

“We have made strategic decisions to procure additional metal, locking up any metal we can find in the marketplace,” Ken Lewis, APMEX’s chief executive said in a statement on the company’s website. “It is also highly likely that we will need an additional day or two to fill orders based on current order counts.”

Shares in companies that mine for silver surged higher, too. Fresnillo rose 9 percent, though it too was well below its highest point of the day, and Polymetal International was up 5 percent. Both were among the biggest gainers in the FTSE 100 index in Britain.

On the New York Stock Exchange, Silvercorp Metals rose 15 percent and Fortuna Silver Mines rose 12 percent.

But the silver market is fundamentally different than that of beleaguered companies like AMC and GameStop.

The stocks that caught the attention of the army of day traders over the past week, spurred on by memes on Reddit, had been targeted by hedge funds that were betting on its decline. By driving the price of these stocks higher, the traders “squeezed” the firms holding short positions, forcing them to buy the shares.

Silver prices, on the other hand, had already been rising before the recent interest, and some users on Reddit have warned against a “silver squeeze,” saying it would benefit the same hedge funds and investors they toppled last week. Also, silver is a much bigger and deeper market, making it harder to influence.

The price of silver climbed nearly 50 percent last year, and some institutional investors expected it to outperform gold this year.

U.S. markets

• The SP 500 index rose about 1.5 percent, rebounding from a loss of more than 3 percent last week — its worst week since late October.

• GameStop’s shares fell about 20 percent, having gained 400 percent last week and more than 1,600 percent in January. Another target of the trading frenzy, AMC, rose 8 percent, paring its gains from this morning. It gained about 280 percent last week.

Europe

• Most European stock indexes were higher in midday trading. The Stoxx Europe 600 gained more than 1 percent, led by industrial and technology stocks.

Asia

• Shares in Asia closed higher after the Chinese central bank took steps to ease a cash crunch. The Hang Seng Index in Hong Kong rose 2.2 percent, ending a four-day streak of losses.

— Eshe Nelson

Article source: https://www.nytimes.com/live/2021/02/01/business/us-economy-coronavirus/