Global Markets Struggle as Europe Deals with Vaccine Supply Issues, Wall Street Worries about More Regulations

European stocks and U.S. stock index futures are being pressured on Friday as a Wall Street scuffle between hedge funds and retail investors is expected to continue, fueling some concerns over excessive volatility. Meanwhile, in Europe, worries over vaccine supply dampened risk sentiment.

In the cash market, the U.K.’s FTSE 100 Index was off by about 1.7%, putting it in a position to post its worst weekly performance since October.

In the U.S., S&P 500 futures, which track the benchmark cash index, fell 1.5% and NASDAQ 100 futures, which primarily track technology issues are down 1.88%. The weak performances overnight put a dent in yesterday’s gains.

Battle Between Small Traders and Goliath Hedge Funds Raising More Issues

Wall Street will open on Friday with more concerns over a coordinated assault by small traders organizing over online forums, such as Reddit, to force hedge funds to reverse short positions on companies such as GameStop and AMC Entertainment.

Investors, who have enjoyed a free ride to record highs, on central bank and government dimes, are now worried that the speculative actions unveiled in the markets this week will bring more government regulation and supervision that could force the U.S. Federal Reserve to revise their ultra-loose policies that throw liquidity in the middle, and not toward an attainable price target.

Meanwhile, retail brokers seem to be leaning toward the hedge funds, perhaps in an effort to keep the government off their backs. On Thursday, brokers cut off borrowing facilities and restricted trading in some of the hottest names overnight, driving down their prices.

The CEO of popular online broker Robinhood said the curbs were deployed to protect the brokerage and its customers but that some restrictions will be lifted on Friday.

COVID-19 Vaccine Production Delays Snowballing

With new variants of the novel coronavirus prolonging lockdowns and delaying expectations of an economic rebound, traders are worried about the timing of any recovery, economic or social.

Meanwhile, COVID-19 vaccine production delays have snowballed into a spat between Britain, the European Union and drugmakers over how best to direct limited supplies, Reuters said.

Europe’s fight to secure vaccines intensified on Thursday when the EU warned drug companies that it would use all legal means or even block exports unless they agreed to deliver shots as promised, Reuters added.