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We move from Q2 into Q3 next week, and remember that Friday is a holiday. Because of that, they’ve shifted the monthly jobs report from Friday to Thursday. Considering the shocker of a report last month (to the upside), it’s going to be awfully interesting to see what happens this time. I’m certainly expecting…………..a surprise.
Market overreactions following bad news headlines are usually temporary and can provide the basis for a profitable contrarian trading strategy.
On the 4th of February 2013, a news story broke that the U.S Justice Department was pressing a civil suit against credit rating agency S&P Global for allegedly fraudulently colluding in the subprime mortgage crisis after it failed to rate mortgage bonds adequately prior to the crisis.
In response to the news, S&P Global’s shares tumbled, as can be seen in the price chart below.
Short sellers have been raking it in on their Wirecard shorts, but most haven’t cashed their positions out yet. Analysis from one firm shows that just 12.5% of Wirecard shorts have been covered over the last week, which means most short sellers are letting their position ride in hopes of further declines.
Wirecard stock was already tanking after the company said billions of dollars was missing from its balance sheet. Then the ADR shares of Wirecard plummeted another 74% today into penny stock territory after the Germany company announced that it has begun insolvency proceedings.
The company announced today that it will file for insolvency proceedings in Munich “due to impending insolvency and over-indebtedness.” The announcement comes after Monday’s announcement that the US$2.1 billion that was previously believed to have been missing from the balance sheet probably didn’t exist.
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