With the broader stock-market indexes in a bit of a coma this week, the talk of financial markets is still the awakening of retail investors to the U.S. stock market.
The impact was massive. Robinhood traders accounted for over 7% of the variation in stock returns during the second quarter of 2020, the researchers found. Without the Robinhood crowd, the aggregate market cap of the smallest quintile of U.S. stocks would have been over 30% lower. Read that last sentence again and think about it. A large portion of the stock market doesn’t care what the price is. Why should they? Wildly popular index funds seek to replicate indexes, at any cost. For all the attention on short sellers, the Robinhood crowd is able to affect the price of big companies that are held mostly by passive institutional investors, the researchers said.
Cloud monitoring service Datadog DDOG, +1.77% fell 5% as it offered a 2021 outlook below Wall Street estimates. Cybersecurity firm Cloudflare NET, +0.41% dropped 6% after its earnings forecast met Wall Street estimates. The University of Michigan’s consumer sentiment index highlights the economics calendar. The U.K. reported a 1% rise in fourth-quarter gross domestic product, that nonetheless capped a 9.9% downturn for 2020, the worst performance in more than 300 years. Read what happened 300 years ago.U.S. stock futures ES00, -0.13% NQ00, -0.05% were lower on Friday morning, with most of Asia closed for new-year celebrations.
Should I leave Robinhood? And if so where should I move to? Asking for a friend
But they didn’t. Hedge funds did. This is a cargo cult