GameStop stock surge could be upending the stock market, Fundstrat says

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This week's GameStop surge could be upending the stock market as it leads hedge funds to reduce leverage, Fundstrat's Tom Lee says

by the board as part of a push by activist investor Ryan Cohen.

And while many investors are attributing the broad market decline to rising interest rates, with the 10-year US Treasury note moving above 1.5% on Thursday, Lee thinks it could actually be caused by a de-grossing event in which hedge funds are unwinding their leverage by selling stocks. Lee explained that GameStop could still be a popular short among hedge funds, and a surging price in the video game retailer's share price means quant funds require short-covering.

 

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