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Futures Ramp As Reddit Rally Routed; Italy Soars On “Prime Mario”

World shares and US equity futures rose on Wednesday as volatility caused by a retail trading frenzy on Wall Street subsided on expectations of tougher regulation, while optimism about U.S. fiscal stimulus and the appointment of former ECB-head as Italy’s PM – i.e., Prime Mario – also supported sentiment.

At 7:30 a.m. ET, Dow E-minis were down 16 points, or 0.1% S&P 500 E-minis were up 12.25 points, or 0.32%. Nasdaq 100 E-minis were up 73 points, or 0.55%. The MSCI world equity index was up 0.3% by 1119 GMT, inching closer to its record peak following gains in Asia overnight and a positive open in Europe. Shares are back in rally mode as the speculative short squeeze trades popular with Reddit crowds crumble, easing fears that they could lead to destabilizing swings in the stock market as funds are forced to deleverage. Janet Yellen summoned financial regulators to discuss the recent market turmoil (more below) while GameStop and AMC remained volatile, swinging from losses to gains in pre-market trading.

“Equity markets are fading the retail scare … an indication that this still has a long way to run. And run we shall with two beats on earnings from mega-caps Alphabet and Amazon,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

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