GameStop shares surge in extended trading frenzy – as it happened

Rolling coverage of the latest economic and financial news as organised retail traders continue to cause mayhem for Wall Street

• Sending a message': GameStop investors on why they bought shares
• How GameStop found itself at the centre of a groundbreaking battle between Wall Street and small investors

3.24pm GMT

2.55pm GMT

Sushil Kuner, financial services lawyer at Gowling WLG, says:

The FCA is right to issue this stark reminder of the need to adhere to the Market Abuse Regulations. The furore and excitement of share dynamics can soon dispel as the reality of falling foul of the law hits hard.

2.54pm GMT

The Financial Conduct Authority has issued its own statement following the SEC warning:

We're warning UK investors in certain US listed shares which are being discussed online to use extreme caution. Volatile markets are unpredictable and mean you can quickly lose money. Losses are unlikely to be covered by the Financial Services Compensation Scheme #wallstreetbets

2.39pm GMT

Other shares targeted by Reddit traders are surging at the US open:

GameStop, Koss, AMC, other highly-shorted stocks soar at the open after trading apps lift some restrictions https://t.co/Ta31wFLQeG pic.twitter.com/QBb8Paz3aB

2.35pm GMT

Major US indices are tumbling into the red, but the Reddit brigade is piling back into stocks including GameStop:

2.32pm GMT

The US Securities and Exchange Commission has just put out a statement saying that it is keeping a close eye on the extreme price volatility across stock markets.

The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks' trading prices over the past several days....Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.

The Commission will closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.

In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws.

2.13pm GMT

Johnson & Johnson shares are down 3% in pre-market trading at $164.

That's amid fresh reports about the efficacy of its own vaccine, which is lower than those for two others including the Pfizer/BioNTech and Moderna, which were around 95% effective.

A fifth vaccine, made by the US company Johnson & Johnson, has shown efficacy against the coronavirus and could transform prospects for protecting both the UK and the rest of the world, because it needs only a single dose.

The vaccine, made by the US giant's subsidiary Janssen, based in the Netherlands, was trialled in the UK - and the British government has bought 30m doses. The EU has ordered 400m doses.

Related: Johnson & Johnson one-dose Covid vaccine shown to work

1.42pm GMT

DATA FLASH: US consumer spending dropped in December for the second month in a row, as Covid restrictions continued to curb consumer activity.

It slipped 0.2% last month, following a 0.7% drop in November. However, that was better than analyst expectations for a 0.4% fall.

#US data drop

Personal income (MoM Dec) 0.6% v 0.1% exp. (prev -1.1%)

Personal spending (MoM Dec) -0.2% v -0.4% exp. (prev -0.4%)

Core PCE - price index (YoY Dec) 1.5% v 1.3% exp. (prev 1.4%)

1.33pm GMT

US futures are pointing to a negative start on Wall Street, reversing gains made at the end of Thursday's trading session:

12.47pm GMT

Robinhood, the app favoured by small investors who have sent the share price of certain stocks soaring, has secured a $1bn (730m) injection from backers to handle the ongoing market frenzy, our media business correspondent Mark Sweney reports.

12.01pm GMT

Need to catch up on the Wall Street trading frenzy? The folks over at Planet Money have come up with an amusing explanation on their TikTok channel.

Enjoy.

11.46am GMT

Concerns are mounting over whether financial markets have entered into bubble territory, given the stellar rise of some stocks and the never-ending news about new record highs for US indices.

It raises another key question: if we are in a bubble, is it about to burst?

On the surface, U.S. equities appear expensive at 22.3x the 2021 consensus earnings estimate for the S&P 500.

After excluding the five largest technology-driven stocks (Apple, Amazon, Microsoft, Google, and Facebook), which constitute more than 20 percent of the S&P 500's market capitalisation, the forward price-to-earnings (P/E) ratio drops to 17.5x, according to our national research correspondent.

Still, a pullback or correction cannot be ruled out, as much enthusiasm seems discounted in equity prices.

The frothiest, most extended parts of the U.S. market would be most vulnerable, in our opinion.

11.16am GMT

European indices are still solidly in the red:

10.51am GMT

About 22 senior staff at Dr Martens have become paper multimillionaires overnight, receiving share awards worth more than 350m in the flotation.

Related: Dr Martens will make stock market debut at value of 3.7bn

10.24am GMT

Other stocks targeted by Reddit traders including cinema chain AMC and handset company Blackberry are rising in after hours trading:

Keep an eye on silver - the /wallstreetbets thread is laced with mentions of effecting a massive short squeeze on the metal.

Yesterday we did see a sharp spike higher but it coincided with a swift reversal for the US dollar and gold also shot higher.

9.54am GMT

Elon Musk has whipped up fresh interest in Bitcoin after changing his Twitter bio to say, well, just Bitcoin.

The cryptocurrency is now trading higher by around 11% at roughly $36,872.

Bitcoin jumps after Elon Musk just changed his Twitter bio to #bitcoin. pic.twitter.com/OR3nMtIF30

9.40am GMT

An update to after hours trading data shows retail investors are not letting GameStop shares flounder, after Robinhood and other online broker platforms eased restrictions on select share trading.

GameStop shares are now up more than 115% at around $417 each.

9.34am GMT

DATA UPDATE: German unemployment and Q4 GDP figures are out.

Economic performance was broadly in line with expectations, with German GDP rising just 0.1% in the final three months 2020 compared to the previous quarter.

German Q4 GDP up 0.1% QoQ, broadly as expected. @destatis notes that household consumption suffered while exports and construction supported the economy. https://t.co/4JYAAym1Zr

9.26am GMT

Speaking of which, US-based Novavax has seen shares jump 26% in after hours trading to $167.50 each.

9.12am GMT

Conor Campbell, a financial analyst at SpreadEx, notes that the retail trading frenzy is overshadowing positive news of the Novavax vaccine, which has been shown to be 90% effective in a UK trial.

He says:

The Reddit revolution has done a number on the European and US markets, scaring investors away from the message board-led volatility.

Of course, it's not the Gamestop-saga alone. The vaccine rollout process in Europe has hit a confidence-undermining road bump this week, with the public spat between the UK, EU and AstraZeneca, while an end to lockdown in the UK appears nowhere in sight.

9.03am GMT

Facebook has taken down the popular Wall Street discussion group, Robinhood Stock Traders, in a move that its founder described as backlash for conversations buoying shares of GameStop Corp and other companies this week, Reuters reports.

Related: Facebook shuts popular Robinhood Stock Traders group amid GameStop frenzy

8.49am GMT

Shares in the classic British boot brand have opened at 425p in their first day of conditional trading, surging past the IPO price of 370p.

8.39am GMT

Time for a round-up of European economic data.

Both Spain and France have performed better than expected in the latest release of fourth quarter GDP.

#Spain eked out #GDP growth of 0.4% quarter-on-quarter in fourth quarter of 2020 despite facing renewed restrictions from November due to COVID. GDP still down 9.1% year-on-year in Q4 & contracted record 11% in 2020 https://t.co/xad9eJ8gFC

#French #economy contracted 8.3% over 2020 as it suffered a smaller than feared #GDP drop of 1.3% quarter-on-quarter in fourth quarter when facing renewed lockdown. #France economy contracts less than expected in fourth-quarter with -1.3% slump https://t.co/QfCiskKljT

8.20am GMT

In other news this morning, fast fashion retailer Boohoo confirmed it has entered into exclusive talks to buy the Dorothy Perkins, Wallis and Burton brands from Sir Philip Green's fashion empire, Arcadia Group, which collapsed into administration last year.

These discussions may or may not result in agreement of a transaction. A further announcement will be made when appropriate.

Related: Boohoo in talks to buy Dorothy Perkins, Wallis and Burton

8.05am GMT

All of Europe's major indexes are on the back foot at the start of trading, falling more than 1%:

7.57am GMT

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Stocks are slipping as investors pulled back from risky bets that could be foiled by an army of small investors intent on propping up some of Wall Street's most-shorted shares.

Starting tomorrow, we plan to allow limited buys of these securities. We'll continue to monitor the situation and make adjustments as needed.

European Opening Calls:#FTSE 6439 -1.34%#DAX 13441 -1.65%#CAC 5439 -1.30%#AEX 642 -1.13%#MIB 21593 -1.47%#IBEX 7840 -1.17%#OMX 1944 -1.37%#STOXX 3501 -1.59%#IGOpeningCall

An added concern is the prospect of a slower vaccine rollout, as well as disruption to vaccine supplies, as the EU weights the prospect of export controls on vaccine supplies, thus raising the political temperature amongst those who have managed to coordinate their vaccine rollout program better.

In a separate development European Council President Charles Michel even raised the prospect of seizing control of vaccine production in an attempt to get its own botched vaccine program back on track, after the likes of parts of Spain, France and Germany ran out of vaccine supplies.