Stockmarkets shrug off turbulence
Stockmarkets have hit their first bout of turbulence of the year, but most are clinging onto January’s gains.

The rampage of the Reddit bulls has made more conventional investors take cover. America’s S&P 500 had its worst week since October, closing down 1.9% last Friday. Perhaps most tellingly, the CBOE VIX volatility index, the stockmarket’s “fear gauge”, registered its biggest weekly gain since June last year. The index had stayed beneath 25 for most of the period since Biden’s election victory, but finished last week at 32.4.
For many institutional investors, the spectacle of “retail investors piling into particular stocks” and pushing prices to absurd levels brings back uncomfortable memories of the dotcom bubble, says Rupert Thompson of Kingswood. The drama helped global shares lose almost 4% last week, erasing their gains for the year so far.
The “skirmishes” between hedge funds and Reddit’s “vengeful legions” may have seized the headlines, but financially speaking the whole thing is a rounding error, says Cormac Mullen on Bloomberg. The shares being shorted in the likes of GameStop and other hedge-fund targets amount to “less than 0.001% of the $43trn stockmarket”, according to figures from Barclays. Yet with US equity valuations so high, anything that makes people forget their “greed and fear” and consider “prudence” is salutary.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Markets have hit their first bout of turbulence of the year, but most are clinging onto January’s gains. China’s CSI 300 is up by 4.4% so far this year, while America’s S&P 500 has climbed more than 3.5%. The major laggard has been Europe, where Germany’s DAX has gained just 0.7% for the year. After a strong start the FTSE 100 is marginally down. Therein lies opportunity: British stocks, as MoneyWeek often points out, are trading at a discount to their global peers, and are worth scooping up.
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Which UK region has the most in savings? Average savings by area
The amount people have in their savings differs from region to region in the UK. How does your nest egg compare to those living nearby?
-
Doug and Mary Perkins: Specsavers’ clear-sighted founders
Helped by the deregulation of the sector in the 1980s and brilliant advertising, Mary Perkins and her husband Doug have taken Specsavers to the top of the optometry market
-
Investment opportunities in the world of Coca-Cola
There is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.
-
Streaming services are the new magic money tree for investors – but for how long?
Opinion Streaming services are in full bloom and laden with profits, but beware – winter is coming, warns Matthew Lynn
-
'Pension funds shouldn't be pushed into private equity sector'
Opinion The private-equity party is over, so don't push pension funds into the sector, says Merryn Somerset Webb.
-
Greg Abel: Warren Buffett’s heir takes the throne
Greg Abel is considered a safe pair of hands as he takes centre stage at Berkshire Hathaway. But he arrives after one of the hardest acts to follow in investment history, Warren Buffett. Can he thrive?
-
Who will be the next Warren Buffett?
Opinion There won’t be another Warren Buffett. Times have changed, and the opportunities are no longer there, says Matthew Lynn.
-
Will Comstock crash – or soar?
Opinion The upside for Comstock, a solar panel-recycling and biomass-refining group, dwarfs the downside, says Dominic Frisby.
-
'As AGMs go digital, firms must offer a new form of scrutiny for shareholders'
Opinion Technology has rendered big AGM meet-ups obsolete, but the board still needs to be held to account, says Matthew Lynn
-
Unilever braces for inflation amid tariff uncertainty – what does it mean for investors?
Consumer-goods giant Unilever has made steady progress simplifying its operations. Will tariffs now cause turbulence?