Market Update (March 1)

Federal Reserve System

The Federal Reserve System may enact on the recent challenges in the market

Last week, a Congressional testimony took place where Federal Reserve Chair Powel declared that the economy is slowly improving. However, Powel said a lot of work was still to be done, and the Federal Reserve System would be patient before removing any accommodations. In recent times, there has been a rise in bond yields, implying that investors are pulling forward on their expectations of policy normalization by the Federal Reserve System. Given the economic effects of COVID-19, policymakers will try and not increase bond rates, which would hurt consumers through increasing borrowing costs and mortgaging rates. Because of this, some industry experts claim that monetary policy will continue to serve as a tailwind as interest-rate peaks are still years away.

SPACs

SPAC market is booming

On Monday, it was reported that the SPAC (Special Purpose Acquisition Company) market is worth around $700 billion. A SPAC is a publicly-traded company where shares don’t represent claims in a business but rather ownership of a pool of capital that will be enacted when acquiring other companies. Through February 26, 175 SPACs debuted on the market. For context, 223 SPACs hit the market, and this number was a record high. Already this week, 12 more SPACs debuted on the market, meaning 2020’s number could be beaten within the next few weeks. As the value of the SPAC market rises, the value of a company taken public via a SPAC also rises. In 2021, the value is $2.9 billion, up from $1.7 billion in 2020.

COVID-19 Relief

Democrats aim to send President Biden a $1.9 trillion COVID-19 relief bill

On Monday, Senate Majority Leader Schumer announced that Democrats would start the debate on a $1.9 trillion COVID-19 relief bill later this week. After 20 hours of debates, the Senate can pass its legislation, and House Majority Leader Hoyer expects the bill to be passed on either Friday or Saturday. If passed, the bill would sen $1,400 in direct payments to most Americans along with a $400 per week unemployment program. The legislation also includes $20 billion to speed up the rate of COVID-19 vaccinations along with $350 billion in aid for local and state governments. Even with the legislation, some Democrats believe that President Biden has to provide more direct relief to the people that are severely impacted by the consequence of COVID-19.

Rocket Stock

The new GameStop?

According to the Wall Street Journal, the people that powered the rise of GameStop have decided that Rocket, the largest mortgage lender in the US, will be their next target. Since last week, shares of Rocket have suggest 28%. The Reddit community, WallStreetBets, has encouraged each other to invest in Rocket and have shared evidence of their gains. Ironically, Rocket was chosen as the stock is “fueled and ready for takeoff”. Although WallStreetBets has encouraged the trading of Rocket shares, trading has halted multiple times due to volatility. Rocket Cos. had its largest one month dividend payment at $1.11 because of its excess capital from Q4 of 2020. Going forward, Rocket Cos. has other upsides due to rising mortgage rates, boosting the earning potential for mortgage lenders.

Works Cited

Kourkafas, Angelo. “Weekly Market Wrap.” Edward Jones, 26 Feb. 2021, www.edwardjones.com/us-en/market-news-insights/stock-market-news/stock-market-weekly-update. 

McCaffrey, Orla. “Rocket Stock Is the New Meme Trade. Move Over, GameStop.” The Wall Street Journal, Dow Jones & Company, 3 Mar. 2021, www.wsj.com/articles/rocket-is-becoming-the-new-meme-stock-move-over-gamestop-11614782903?mod=markets_lead_pos3. 

Pramuk, Jacob. “Democrats Aim to Send $1.9 Trillion Covid Relief Bill to Biden by the End of next Week.” CNBC, CNBC, 2 Mar. 2021, www.cnbc.com/2021/03/02/stimulus-update-democrats-aim-to-pass-1point9-trillion-covid-relief-bill-next-week.html. 

Udland, Myles. “SPACs Are Now a $700 Billion Market.” Yahoo! Finance, Yahoo!, 3 Mar. 2021, finance.yahoo.com/news/spacs-700-billion-market-2021-goldman-sachs-morning-brief-110126053.html. 

Market Update (February 18)

Healthcare

Winter Storm in Texas a “Significant Problem” according to leading expert Dr. Anthony Fauci

As the country has watched the Midwest get ravaged by the everlasting cold weather, the state of Texas has arguably struggled the most. Texas runs on its own power grid, ERCOT (independent of the two other national power systems). Because of that, they cannot borrow electricity from neighboring states and have suffered as a result. As there is no power, COVID-19 vaccinations have been put at a standstill. Unfortunately for Texans, a great deal of the vaccines sitting in freezers may have to be thrown away, and for a state that houses nearly 10% of all Americans, that is a great loss. According to experts, many vaccine hubs in major Texas cities such as Dallas, San Antonio, Austin, and Houston will have to work double-time to get back on track to meet their goals on vaccinations for the quarter. Nearly three million people have received their first dose of the vaccine so far, and of those three, 1.2 million have received their second dose. Texas has a long way to go, and the struggles from this cold weather will be a great challenge to overcome in the coming weeks and months.

Politics

Stimulus Talks at a Standstill, Senator Ted Cruz Under Fire After Leaving Texas During Storm

On Thursday, little news came from Washington in regards to the third round of stimulus checks coming to Americans. This time around the total is expected to be $1,400 for all Americans who qualify. Since last week, little progression past being approved by the House of Representatives ‘Ways and Means Committee.’ Currently, the stimulus is on pace to be approved by March 14th, but as expected, many are pushing for the house to review it immediately. With the recent storm in the midwest, many are in need of the money on very short notice. On another note, Texas Senator Ted Cruz (R) was spotted fleeing the brutal Texas weather on a flight to Cancun, Mexico. A tweet surfaced with a picture of him on the plane, and he was the subject of a social media attack, with many calling him a coward for leaving his constituents by themselves and leaving the cold weather. As a result, Cruz was pressured into returning to Texas this morning, as he returned to Houston on the first flight of the day.

COvid-19

Study reveals that Pfizer and Moderna Vaccines have a lower effectiveness level on the South African strain of COVID-19

As reported by the New England Journal of Medicine, the Pfizer and Moderna vaccines showed that they could create antibodies, but representatives from both companies claim that a booster shot in development would help provide added protection against new strains. A cause of worry amongst scientists is that while antibodies may be generated to fight the new strains, the level of antibodies needed to be effective is still completely unknown. The new Johnson & Johnson vaccine is said to be more effective as compared to the Moderna, Pfizer vaccine when fighting the new strains, so many consumers would like to wait until their approval from the Food and Drug Administration.

Gamestop hearing

Robinhood CEO among other companies at GameStop hearing today

Today, Robinhood CEO Vlad Tenev appeared in front of the House of Representatives Financial Services Committee during their meeting. He apologized to the committee for Robinhood’s performance two weeks ago during the ‘reddit trades’ events wherein stocks such as GameStop, AMC and NAKD, experienced sharp increases and declines shortly thereafter. Robinhood chose to restrict trading of these (and various other) volatile stocks during that week under pressure from other investors. One representative called for a conflict of interest, wherein Robinhood disadvantaged their customers during a week of high volatility.

Citi Bank

Citi Bank loses court battle to regain the $504 million dollar check sent to Revlon

On thursday, citigroup lost a court case which they started to reclaim the 504 million dollar which they mistakenly loaned to Revlon. The judge ruled that the transfer of funds was intentional and non refundable. In this scenario, the law is that if a creditor accidentally sends funds for a loan, the recipient actually has the right to keep the money. Although it usually is not in such high amounts, such as this case, the law would not be modified. Also, the court believed that a bank as sophisticated as CitiBank has enough internal control measures to prevent a ‘mistake’ like this from occurring. Although Citigroup intends to appeal the decision, it is unlikely that any superior court would come to a different decision, as mentioned before with their internal security measures.

Works Cited

BerkeleyJr. “Dr. Fauci Says Winter Storm in Texas Is a 'Significant' Problem for Covid Vaccine Distribution.” CNBC, CNBC, 18 Feb. 2021, www.cnbc.com/2021/02/18/texas-weather-fauci-says-winter-storm-is-a-significant-problem-for-covid-vaccine-distribution.html.

Goodwin, Jazmin. “Citi Made a $500 Million Mistake. Here's How That Would Play out for Regular People.” CNN, Cable News Network, 18 Feb. 2021, www.cnn.com/2021/02/18/business/citigroup-revlon-lawsuit/index.html.

Mengle, Rocky. “Third Stimulus Check Update: The Current Plan for $1,400 Payments.” Kiplinger, Kiplinger, 18 Feb. 2021, www.kiplinger.com/taxes/602268/third-stimulus-check-update-the-current-plan-for-1400-payments.

Market Update (February 17)

Written By: Emily Vo

Utilities

Texas’ winter storm exposes inequalities in the state’s power grid

Texas produces the most electricity in the United States, however, many underprivileged residents found themselves without power during this unprecedented winter storm. Millions of people across Texas found themselves in the dark and cold amid this winter storm. However, images of city skylines, such as those in Houston, revealed how disadvantaged families and people of color were disproportionately affected during this time. Their neighborhoods were revealed to be dark during the storm, while the city’s skyline lit up. It has been pointed out that disparities like these have always existed, the winter storm just amplified them. In an attempt to combat the outages, the Electric Reliability Council of Texas initiated outages to try to redirect power to areas that needed it the most. However, this only revealed issues with infrastructure that allows denser and more affluent communities to receive and benefit from the power. Inequalities in cities such as Austin and Dallas were also revealed during blackouts in this winter storm. These cities, like Houston, saw their downtown areas shining while the communities around them were dark. This issue has led many to turn to life-threatening methods of staying warm such as using cars for heat. A woman and a girl in Houston passed away from carbon monoxide poisoning after they left their car running in their garage to try to generate heat. This utility inequality in Texas has been amplified by the winter storm and has greater consequences than we believe.

Winter Storm

This unprecedented winter storm threatens millions of Americans across the United States

This winter storm has blanketed large parts of the South with snow and freezing rain. As a result, millions of Americans have been left without power and running water. The storm is predicted to clear out and move towards the East Coast later this week, however, it is currently prolonging freezing conditions across many states such as Texas, Oklahoma, and Tennessee. Other states, such as North Carolina, Virginia, and Mississippi, are also predicted to be affected. The icy weather poses a real threat for widespread power outages, which has already began in Texas. According to the Associated Press, without power and in freezing conditions, more than two dozen people have died due to weather-related issues. Many states such as North Carolina have even declared a state of emergency in response to this storm. Utility and electricity companies are aware of these power outages and have been working to try to restore electricity and redirect power to those who need it most. Conditions are predicted to return to normal or at least improve by the end of the week. However, vaccinations have been postponed in these areas, further slowing the vaccination rate in the United States.

Bitcoin

Bitcoin has crossed the $50,000 price barrier

Bitcoin first tentatively passed the $50,000 price barrier on Tuesday. But on Wednesday, February 17th, it definitely passed this barrier. This barrier is a crucial threshold and Bitcoin has surpassed many predictions. Today, the driver of Bitcoin’s price is largely speculation. Tesla’s purchase of $1.5 billion worth of Bitcoin on February 8th is believed to have been the final push Bitcoin needed to pass the $50,000 barrier. Tesla, along with other big-name investors, are betting on Bitcoin’s “store of value” for its demand. Though Bitcoin transactions may be too expensive for everyday transactions such as buying a cup of coffee, it makes a good bank account. This is due to the fact that Bitcoin is debatably uncorrelated with other asset prices. Many are buying Bitcoin on the assumption that demand for bitcoin from new investors will continue to push its price up. However, at this point, the only thing that will likely push Bitcoin’s price up is more large-scale buying by institutions or individuals.

Oil Prices

Saudi Arabia plans to reverse its recent cut in oil production

In the coming months, Saudi Arabia plans to increase its oil production, a reversal of its recent cut in production. This is a sign of growing confidence in an oil-price recovery. Oil markets were surprised last month when Saudi Arabia, the world’s largest oil exporter, cut 1 million barrels a day of crude oil production. This cut was made in an effort to raise oil prices. Now, as Saudi Arabia plans to reverse its decision and increase production, there is growing confidence that oil prices will recover. Their decision to cut production was planned to be in effect until March, so this rise in price and production likely won’t be seen until April. Saudi Arabia has warned that its plans to increase oil output could be changed in circumstances change as well. Saudi Arabia also has not communicated this plan to the Organization of the Petroleum Exporting Countries (OPEC) either. Prince Abdulaziz bin Salman warns that though they are in a better place in terms of oil and price, there is still lots of uncertainty and Saudi Arabia has to be cautious with its plans. This week, oil prices returned to levels that were not seen since the COVID-19 pandemic began in early 2020. However, there is still much uncertainty, resulting in the caution taken by Saudi Arabia.

COVID-19 Vaccine Stocks

Insiders at COVID-19 vaccine makers such as Pfizer and Moderna sold nearly $500 million of stock last year. Executives and insiders at these companies have repeated the biggest rewards from the production of the vaccine. In 2020, more than 8.5 million shares were sold. While in 2019, only around 4.7 million shares were sold. Much of these sales came from one company, Moderna, which manufactured one of the two vaccines authorized for use in the United States. Executives and a director at Modern sold more than $321 million worth of their stock in over 700 different transactions, making up most of the stock sales. Companies such as Pfizer, Merck, and Novavax also made up this $500 million in sales of stock. Some of these sales have drawn the attention of government officials, with the head of the Securities and Exchange Commission calling for new restrictions on the trading plans under which many of the sales were made. However, some say that this aggressive selling behavior is not unusual for companies that have seen dramatic growth. Some of the selling was established before the pandemic, however, most was done while the vaccine was in development. There is debate on whether or not it is ethical for executives at pharmaceutical companies such as these to reap the benefits of a vaccine. There is also debate if tighter restrictions in buying and selling securities for insiders of a company are needed. In response, Novavax has released a statement claiming its executives adhered to laws of company stock sales. While a spokesman for Moderna also claimed all executive sales are made under 10b5-1 trading plans, which are passive investment schemes that allow corporate insiders to buy and sell company stocks.

Retail Sales

Retail sales rose nearly 5.3% after months of decline in 2020

On the path to economic recovery in the United States, retail sales have risen strongly with stimulus checks in January. On Wednesday, February 17th, the government has said that retail sales rose 5.3% in January from the month before. Manufacturing output has also nearly reached pre-pandemic levels. Though the COVID-19 pandemic is still affecting the economy and the recent winter storm is also causing disruptions, this growth is a good sign for the U.S. economy. Government stimulus, as well as eased COVID-19 restrictions on businesses, has contributed to this growth. Consumer spending has also been described by economist James Knightley for the Wall Street Journal as “firing on all cylinders.” This increase in retail sales comes after three months of a decline during the holiday season. Spending across the board, such as at bars and restaurants, has also been rising. The Federal Reserve Bank of Atlanta has predicted that the economy will grow 9.5% annually in the first quarter. This is more than double the 4.5% estimate from a week ago. All these signs point in a positive direction for the U.S. economy and it seems to be on the way to recovery.

Works Cited

Ansari, Talal, and Katherine Blunt. “New Winter Storm Threatens Fragile Power Grids in Texas, Other Parts of U.S.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/new-winter-storm-threatens-fragile-electrical-grids-in-texas-other-parts-of-u-s-11613588298?mod=hp_lead_pos1.

Faucon, Benoit, and Summer Said. “WSJ News Exclusive | Saudi Arabia Set to Raise Oil Output Amid Recovery in Prices.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/saudi-arabia-set-to-raise-oil-output-amid-recovery-in-prices-11613570923?mod=hp_lead_pos6.

Morris, David Z. “This Isn't the $50,000 Bitcoin You're Looking For.” Fortune, Fortune, 17 Feb. 2021, fortune.com/2021/02/17/this-isnt-the-50000-bitcoin-we-predicted/.

Pacheco, Inti. “Insiders at Covid-19 Vaccine Makers Sold Nearly $500 Million of Stock Last Year.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/insiders-at-covid-19-vaccine-makers-sold-nearly-500-million-of-stock-last-year-11613557801?mod=hp_lead_pos3.

Torry, Harriet. “U.S. Retail Sales Rose Strongly on Stimulus in January.” The Wall Street Journal, Dow Jones & Company, 17 Feb. 2021, www.wsj.com/articles/us-economy-january-retail-sales-coronavirus-recovery-11613503145?mod=hp_lead_pos2.

“Winter Storm Amplifies Power Grid Inequalities for Disadvantaged Texans.” The Guardian, Guardian News and Media, 17 Feb. 2021, www.theguardian.com/us-news/2021/feb/17/texas-winter-storm-power-outages.

Market Update (February 16)

Written By: Nayan Bandaru, Junior Analyst, Technology

Alaska is Warmer than Texas???

Massive cold front along with snow and ice sweeps the southern United States

This week a massive winter storm descended on the southern United states and is causing crazy power issues for millions upon millions of people. It seems that the storm is going to continue for a few more days with ice and snow on the way. The largest issue from the storm is that the Texas power grid was not able to hold up to the demand of electricity and crashed. This means lots of parts in the state are currently without power or are doing things called rotating power outages, where it's 30-45 minutes of electricity for a part of a city which then shuts off and moves to a different part of the city.  We should all be doing our part in conserving as much energy as possible to help out those who are in need at the moment. 

What’s going on with Oil?

Oil prices surge to highs near the beginning of Covid

Over the weekend Oil prices (WTI) surged to highs of over $60 a barrel. Prices like that for oil haven’t been seen since the beginning of the pandemic. Part of the hike in price is due to the rising tensions in oil rich countries in the Middle East. Particularly the Houthi rebel group in Yemen mobilized on the Yemen government causing tensions to spike as if the rebel group attacks it could millions of lives in danger. On top of that the cold storms in the south combined with stimulus hype drove up the price of Oil. 

Earnings this week

Keep an eye for some big gains 

The earnings train continues this week with a bunch more companies to look out for. Two really big companies to take a look at are Walmart and Shopify. Wall street analysts are looking at Walmart to turn a higher profit per-share number than last quarter for the stock price to see a hike. Most of Walmart's 21% returns last year were during the early retake of the market after the beginning of the pandemic and the stock plateaued after late August. Shopify is a gem of a stock during the pandemic with many people taking the extra time on their hand to start some businesses and hobbies of their own. Shop within the last 2 weeks has seen a 34% stock price surge and last year in 2020 they grew over 200%. Shopify is a monster of a stock especially with their earnings predicted to be favorable once again, watch out for some big moves. Other large cap companies to keep an out for this week are CVS, Roku, Marriot, etc….

The Acquittal 

Donald Trump was acquitted of his impeachment 

Donald Trump was acquitted by a vote of 57-43 with 7 republicans joining 50 democrats to vote yes on his impeachment which fell 10 short of the 67 needed votes. Regardless Trump becomes the first president in history to be impeached by the House of Representative twice and acquitted by the Senate twice. Most of the republicans that voted no most likely did so as they would be afraid of stepping on Trump’s toes and going after him. Many also cited that the vote was one that was extremely uncomfortable and had no good outcome for anyone involved. That being said there were 6 more votes to impeach Donald Trump this time around than in 2020, marking that more of the Senate understood that the crimes he committed while in office were punishable by impeachment. Impeachment would have prevented Donald Trump from ever running for office again, which now is still a possibility in the air. The ability to mobilize a group of people to riot on the capital is a highly dangerous ability. Trump affected the markets by making them highly volatile all the time through social media. Will Biden be able to do the same thing through twitter or is the era of the POTUS stock movement over?

Sources 

https://markets.businessinsider.com/earnings-calendar#date=02/15/2021-02/21/2021&name=&countries=&eventtypes=103,99&tab=L

https://www.aljazeera.com/news/2021/2/16/un-alarmed-as-battle-for-marib-threatens-millions-of-yemenis

https://oilprice.com/

https://www.marketwatch.com/story/big-city-flight-led-to-surging-suburban-home-prices-will-it-outlast-the-pandemic-11613510270?mod=newsviewer_click

https://www.cnn.com/2021/02/14/politics/donald-trump-impeachment-republican-vote/index.html

https://www.marketwatch.com/investing/stock/shop

Market Update (February 12)

Disney

Disney released its earnings report for Q1 of 2021

Disney released its earnings report on Thursday afternoon. The earnings per share (EPS) sat at $0.32 at the end of the fiscal quarter compared to an expected loss of $0.34 per share. Additionally, Disney’s revenue sat at $16.25 billion compared to the $15.9 billion expected as predicted by Refinitiv. Overall, Disney representatives have claimed that the company’s Q1 reports have been drastically impacted by COVID-19 as people are unable to go to the parks. According to CEO Bob Chapek, the reopening of Disney parks is fully dependent on the public’s rate of vaccination. Chapek believes that parts of the parks will be open by the end of the year with adequate social distancing taking place. However, Disney posted stronger than expected numbers for streaming subscribers. Disney claims to know have a total of 146 million subscribers, and the number can only go up with the launch of the Star-branded general entertainment offering.

Cannabis

Cannabis stocks heads for largest one day selloff

Unlike the past few weeks, Cannabis stocks took a nosedive due to the halt of reforms on the strict US laws. Although President Joe Biden and Vice President Kamala Harris are in favor of reforming the US cannabis laws, the drug is still being considered a Schedule 1 drug alongside heroin. As such, the cannabis market is confined to the states that have legalized the drug and has kept many companies out of the federally insured banking system. As such, there have been larger purchases of Canadian cannabis stocks while the US continues to keep strict cannabis laws. However, interest in the cannabis industry is expected to continue as more states add legalization to their ballots in November.

Medicine

Diabetes drug makes breakthrough for weight loss

According to a recent study, a drug used to treat diabetes has led to noticeable weight losses in the average participant. One of the researchers in the study claimed that the majority of patients saw a 10% weight loss while a third saw up to 20% weight loss. There were 1,961 adults from North America, South America, Asia, and Europe that took part in the 68-week trial. During the trial, some participants were given a placebo shot while the others received a shot of semaglutide underneath their skin. The participants who received semaglutide experienced weight loss in the range from 5% to 20%. Currently, semaglutide is sold under the names Ozempic and Rybelsus by Novo Nordisk, a Danish drug company. Since this article was published, the price of Novo Nordisk (NVO) stock has increased 2.56% with the price continuing to increase after hours.

FinTech

MoneyLion goes public through a SPAC

MoneyLion, America’s leading digital platform, is set to be publicly traded after its merge with Fusion Acquisition (FUSE). Fusion Acquisition is a special purpose acquisition company (SPAC) that raises capital through IPOs. As a part of the merger, MoneyLion is also set to receive a $250 million private investment from BlackRock and Apollo Global Management. MoneyLion’s equity value will jump to $2.9 billion and will receive $526 million in net proceedings. Once the merger is complete, Fusion Acquisition will be renamed MoneyLion and traded on the NYSE. By going public, MoneyLion hopes to raise awareness of its service to the many Americans who are disadvantaged through the current financial system. MoneyLion looked at different ways to go public, but ultimately decided that a SPAC would lead to the most efficient way of going public.

Works Cited

Beltran, Luisa. “Another Fintech Is Going Public Through a Blank-Check Company, in a $2.9B Deal.” MoneyLion Is Merging With a SPAC in $2.9B Deal, Barrons, 12 Feb. 2021, www.barrons.com/articles/fintech-moneylion-going-public-spac-51613169998. 

Feiner, Lauren, and Sarah Whitten. “Disney Smashes Streaming Subscriber Expectations, Boosting Segments Hurt by Covid.” CNBC, CNBC, 12 Feb. 2021, www.cnbc.com/2021/02/11/disney-dis-q1-2021-earnings.html. 

Kollmeyer, Barbara. “Diabetes Drug Hailed as a Breakthrough for Weight Loss.” MarketWatch, MarketWatch, 11 Feb. 2021, www.marketwatch.com/story/diabetes-drug-hailed-as-a-breakthrough-for-weight-loss-11613041104?mod=home-page. 

Linnane, Ciara, and Tomi Kilgore. “Cannabis Stocks Nosedive as Rally Driven by Hopes for U.S. Legal Reforms Comes to a Screeching Halt.” MarketWatch, MarketWatch, 11 Feb. 2021, www.marketwatch.com/story/cannabis-stocks-nosedive-as-rally-driven-by-hopes-for-u-s-reforms-comes-to-a-screeching-halt-11613069414?mod=mw_more_headlines. 

Market Update (February 10)

Impeachment

Impeachment Trials continue against former President Trump

On Wednesday, House of Representatives Impeachment Managers continued their proceedings against former president Donald J Trump. Many of the accusations are based on the events of January sixth, 2021, wherein rioters attacked the United States Capitol Building. House Impeachment managers claim that Trump himself purposefully incited the insurrection by holding a rally at the exact same time which the confirmation of electoral college votes was to take place. During the proceedings, members of the house played multiple videos as well as heard audio clips from those who were at the Capitol Building or at the rally, in an effort to prove the former President guilty and prevent him from running for office again.

Healthcare

AstraZeneca develops a possible treatment for COVID-19 alongside their vaccine

AstraZeneca’s drug Pulmicort, which was originally designed to help treat asthma, has shown promising effects on COVID-19 patients. A 28-day study was conducted on the efficacy of the drug when combating COVID-19, and the drug appeared to reduce the need for urgent care as well as hospitalization in patients by nearly 90 percent. Although this study was conducted on a smaller scale, it could indicate a possible short term treatment for those who are not vaccinated and possibly contract COVID-19. On top of this treatment, AstraZeneca’s COVID-19 variant vaccine is on track to be ready by the fall according to top executives within the organization. The current vaccine shows strong effectiveness when combatting ‘normal’ COVID-19, but was relatively less effective when combatting variants.

Stimulus package

As reported last week, House of Representatives Democrats have started to begin the voting process to pass President Biden’s relief plan.

Though many in the house and the general public have advocated for a $2,000 stimulus package per person, it does not seem that the $2k figure is attainable at this point, but the Biden administration is arguing for a $1,400 per individuals who earn up to $75k and couples filing for $150k. There has been slow to moderate job growth so far in the calendar year 2021, but the need for another stimulus package is there for many Americans.

Technology

Oracle and Walmart’s joint plan to purchase popular cell phone app TikTok has been put on hold

Months after former President Donald Trump aimed to have the popular app TikTok banned from the United States, Walmart and Oracle struck a partnership deal with TikTok which would allow them to buy a stake in the app and prevent the app from being banned in the United States. TikTok’s ownership group Bytedance would still maintain a controlling share in TikTok, but talks to complete the deal stalled during the later months of Trump’s Presidency, and now the Biden administration will have to take a look into the deal. Since Biden did not agree to the original deal in principle, it is likely to be altered before going forward with approval.

LYFt

Lyft saw shares climb on Wednesday despite a sharp decline in Revenue

On Wednesday, Lyft saw their price per share figure jump up during the day, Lyft had previously reported a decline in revenues of over 40%, but at the same time, their revenue rose 14% sequentially. Although their revenue had declined a good amount, they outperformed Wall Street’s expectations by nearly $10 million. With the company outperforming expectations during COVID-19, many have high hopes for the ride-sharing app as vaccines start to become more widely available and life returns to normal at some point. Lyft also incorporated some cost-cutting measures such as layoffs and payroll processing, which was crucial for them to post a lower than expected quarterly loss of $150 million this past quarter. Wall Street is riding high on the hope that Lyft will improve in the quarters to come as the pandemic slows down.

Works Cited

Investorplace. “What Did the Stock Market Do Yesterday? Feb. 10, 2021.” InvestorPlace, 11 Feb. 2021, investorplace.com/stock-market-live-updates-wednesday-stock-market-today-news-02102021/.

Manskar, Noah. “Lyft Shares Surge on Hopes It Will Turn a Profit This Year.” New York Post, New York Post, 10 Feb. 2021, nypost.com/2021/02/10/lyft-shares-surge-on-hopes-it-will-turn-a-profit-this-year/.

melissa_repko. “Walmart's Use of TikTok Will Likely Continue, Even If Deal with Oracle Falls Apart.” CNBC, CNBC, 10 Feb. 2021, www.cnbc.com/2021/02/10/walmarts-use-of-tiktok-will-likely-continue-even-if-oracle-deal-unravels.html.

“Stock Market News for Feb 10, 2021.” Yahoo! Finance, Yahoo!, finance.yahoo.com/news/stock-market-news-feb-10-145102171.html.

Market Update (February 9)

Written by: Emily Vo

Utilities

Senator Manchin urges President Biden to reverse his stance on the Keystone XL pipeline

One of Biden’s first actions upon taking office on January 20th was revoking the permit for the Keystone XL pipeline. Biden promised to prioritize combating climate change when he took office and has kept to his promise so far. This executive order to revoke the pipeline’s permit was a part of his many executive orders that served to fight climate change. Senator Manchin, the head of the U.S. Senate energy committee, was unhappy with Biden’s decision and wrote him a letter expressing this. Manchin wrote that even without this particular pipeline, oil will still enter the United States by other methods such as railroads and trucks. Manchin pointed out that these methods are more likely to result in oil spills than pipelines. Furthermore, Manchin argued that the pipeline would provide union jobs for Americans. Manchin supports what he calls “responsible” energy infrastructure, which includes the Keystone XL and Mountain Valley pipeline. He urges Biden to reverse his decision on the Keystone XL pipeline.

Minimum Wage

The Congressional Budget Office has released a report with points for both sides of the argument to raise the federal minimum wage to $15

The nonpartisan Congressional Budget Office released a report that has arguments for both sides of the debate to raise the federal minimum wage to $15 per hour. In the report, the Congressional Budget Office concluded that if the minimum wage was raised to $15, approximately 900,000 people would be lifted out of poverty. Millions of Americans’ incomes would also be increased. However, the report also concluded that by 2025 when the minimum wage would reach $15 under a proposal before Congress, there will be 1.4 million fewer people working. This decrease in jobs would be because higher wagers will in turn increase the cost of production for goods and services. As a result, many employers will reduce their workforce and hire fewer people as well. There is debate over whether raising the minimum wage will be a part of President Biden’s COVID-19 package, but Biden conceded last week that this will be unlikely despite the fact that he advocated for it during his presidential campaign. This report has only fueled the debate over whether or not the minimum wage should be raised to $15 per house.

Politics

The United States Senate has voted to proceed with Donald Trumps’ Impeachment Trial

After an afternoon of arguments on whether it was constitutional or not to try a former president, the Senate has officially voted to proceed with the second impeachment trial for Donald Trump. All Democrats voted to proceed, accompanied by six Republican senators who broke with their party to also vote to proceed with this trial. Donald Trump was impeached by the House of Representatives last month due to the capitol riot, making this the second impeachment trial. The vote was 56-44 in favor of preceding with the second impeachment trial and the several days of presentations on the case from both parties will begin on Wednesday. Sixty-seven votes are needed to convict Donald Trump, which means that seventeen Republicans would need to vote to convict him with the fifty Democrats. At this moment, not enough Republicans will or have indicated that they will vote to convict him.

Markets

U.S. stocks finished mixed after S&P 500’s record close

The S&P 500 edged down 4.36 points, or 0.1%, to 3911.23. While Dow Jones fell 9.93 points, or less than 0.1%, to 31375.83. NASDAQ rose 20.06 points, or 0.1%, to 14007.70, which was a record. This was the first time S&P 500 and Dow Jones marked their first down day in more than a week. However, throughout the way, the market has remained relatively flat. Quincy Krosby, the chief market strategist at Prudential Financial, spoke to the WSJ that he believes the market is enjoying the potential new stimulus package. Expectations of new stimulus spending in the United States are believed to contribute to the economic revival, which has helped peel off expectations for turbulence in U.S. stocks. There are expectations that the economy will revive sometime this year, which has prompted money managers to bet stocks will continue to rise. This is driven by sectors such as energy, banks, and other consumer companies. However, there are still some risks. For example, new strains of COVID-19 threaten to push back the reopening of some sectors.

Technology

China’s Huawei Technologies Co. has filed a lawsuit in the United States disputing that it is a security threat

Huawei filed a lawsuit in the U.S. Court of Appeals for the Fifth Circuit asking to review the FCC ruling last year. The FCC found that the company is a threat to national security and blocked American telecommunications operators from buying Huawei-made telecom gear. President Trump’s administration had previously blocked Huawei from accessing American technology and tried to persuade allies that Huawei’s telecom gear posed national security risks. In Huawei’s new lawsuit, it claims that the FCC’s ruling back in December was arbitrary and not supported by substantial evidence. A spokeswoman for the FCC has responded saying that the FCC’s final decision on Huawei was based on substantial evidence developed by the FCC and U.S. national security agencies. The FCC continues to defend their decision. While Huawei hopes that this lawsuit will allow them to access American markets and technology. U.S. officials have said in the past that Beijing could use Huawei’s telecom gear to spy or disrupt telecommunications networks, but there has been no evidence of this happening. Ren Zhengfei, Huawei’s founder, has said that the company would never do this, but there is little trust from the United States on his claim.

Energy and Climate

Airlines plan to move towards more sustainable fuel options to reduce their carbon footprint

Airlines are currently under pressure to reach net-zero greenhouse gas emissions by 2050. In order to meet this, they are currently experimenting with different sustainable aviation fuels (SAF). Biofuel is currently in the lead to replace fuel in the future. It is made from cooking oil, animal fats, crops, and unused wood. However, it comes with high costs and there is a lack of supply of biofuel to use for all flights. However, there is a push to research and innovate biofuel as it reduces emissions by 80% when compared to regular jet fuel. The push towards SAF is still pretty young as less than 0.2% of flights used SAF from 2016 to 2020. But many believe that SAF and biofuel are key to reducing the environmental impact that aviation has on the planet. Aviation currently makes up 3.5% of all human-made greenhouse gas emissions. Air traffic is also expected to rise by more than threefold from 2015 to 2045, likely increasing this percentage. Though the COVID-19 pandemic has slowed the number of flights down, there is still a large push to reduce the impact that the aviation industry has on the planet.

Works Cited

Bugault, Olivia, and Dieter Holger. “Airlines Push to Reduce Carbon Footprint With Greener Fuels.” The Wall Street Journal, Dow Jones & Company, 9 Feb. 2021, www.wsj.com/articles/airlines-push-to-reduce-carbon-footprint-with-greener-fuels-11612893657?mod=hp_lead_pos12.

Burton, Amber, and Joe Wallace. “S&P 500, Dow Close Lower After Records.” The Wall Street Journal, Dow Jones & Company, 9 Feb. 2021, www.wsj.com/articles/global-stock-markets-dow-update-02-09-2021-11612860037?mod=hp_lead_pos3.

Collins, Michael, and Paul Davidson. “$15 Minimum Wage Would Boost Pay for Millions but Would Cost 1.4 Million Jobs, Report Says.” USA Today, Gannett Satellite Information Network, 8 Feb. 2021, www.usatoday.com/story/news/politics/2021/02/08/government-report-says-15-minimum-wage-would-cost-1-4-million-jobs/4439482001/.

Hughes, Siobhan, et al. “Senate Votes to Proceed With Trump Impeachment Trial.” The Wall Street Journal, Dow Jones & Company, 10 Feb. 2021, www.wsj.com/articles/second-trump-impeachment-trial-opens-with-debate-over-senates-power-11612866603?mod=hp_lead_pos1.

“Senator Manchin Urges Biden to Reverse Opposition to Keystone XL Pipeline.” Reuters, Thomson Reuters, 9 Feb. 2021, www.reuters.com/article/usa-keystone-manchin/senator-manchin-urges-biden-to-reverse-opposition-to-keystone-xl-pipeline-idUSL1N2KF2UI.

Strumpf, Dan. “Huawei Files U.S. Lawsuit Disputing That It Is a Security Threat.” The Wall Street Journal, Dow Jones & Company, 9 Feb. 2021, www.wsj.com/articles/huawei-files-u-s-lawsuit-disputing-it-is-a-security-threat-11612880705?mod=hp_lead_pos2.

Market Update (February 8)

Written By: Nayan Bandaru, Junior Analyst, Technology

Stimulus Package Updates 

House Democrats continue to push forward with Bidens package amid Republican resistance

The Biden 1.9 trillion Stimulus package seems to be continuing to move forward smoothly even with republicans wanting to allow the benefit for only individuals making 50,000 and families making 100,000. Also, the democrats are buckling down on higher-income individuals and families blocking them from getting any stimulus if they make 100,000 and 200,000 or above (respectively). The new plan also includes a greater child tax credit for millions of American families. For newborn children up to age six, the credit is 3,600 and from ages six - seventeen the credit gets lowered to 3,000 per child. The $15 minimum wage that Biden proposed as part of the package faces long long odds in the senate of being passed. The many aspects of this plan hopefully should be passed within the next few weeks giving the American people some financial relief from the coronavirus which is still rampant throughout the nation. 

Cryptocurrency 

Bitcoin has a huge surge and Ether continues to climb

Bitcoin rose over 20% today after news that Tesla invested 1.5 billion into the cryptocurrency causing it to blast past its last ATH. Swings like these seem common nowadays in such a volatile market with so much hype around cryptocurrency in the last couple of weeks, but this one may have more merit than just a pump and dump. Bitcoin’s value greatly increased in the past due to its halving periods but now Bitcoin increases have more weight with its true future valuation and how much of a staple it could become in the economy such as gold and silver. When large institutions invest money into bitcoin it shows that the market makers and large-cap have an eye on it and think it has a lot of potential for the future, i.e. there are rumors that Apple wants to invest in Bitcoin. There is also the X-Factor of Elon Musk though. If it were another company that invested in bitcoin would we see the same rise in price? Or is it just the Musk magic? The historic rise of Ether is being fueled mainly by the Defi sector which currently has around 36 billion locked up in it, and also the recent large rises in Bitcoin. Following surges in the two essentially most well-known cryptocurrencies, there are a couple of altcoins that also have an upside according to experts (Cardano and XRP) which may see a rotation soon. Also, my personal favorite crypto, Dogecoin, is up over 1000% on the year. Thanks, Elon!

Earnings Updates

Looking at what's to come this week and beyond

As companies roll out their Q4 2020 earnings there are a couple you’ll want to keep your eye out for this week especially. Disney has earnings this week (Q1 2021) and is set to impress investors. In fact, the stock jumped up over 4% today in light of this and is set to potentially continue the rise. With potential stimulus rolling out giving Americans more disposable income and continuation of coronavirus vaccines it's looking good for Disney. There are also other large-cap companies like Zillow, Uber, Coca-Cola, AstraZeneca, Lyft, Twitter, etc…. So keep your eye on these other stocks as earnings can be a slippery slope for investors. 

Technology 

Amazon workers attempting to form a union, Apple EV talks fall through 

Amazon workers in Bessemer, Alabama are attempting to form a workers union. This specific warehouse opened in March right alongside the beginning of the Coronavirus pandemic. Workers feel as if they are being punished for actions that are not their fault such as not maintaining 6 feet of distance when there is not enough space to do so. They are also saying the management is extremely poor with large gaps of communication that are not helping the situation at all. If the union does pass it will be the first of its kind for amazon and be a catalyst for other employees around the nation for organizing unions. Amazon ran into something like this in 2014 but the employee’s efforts back then went nowhere. Amazon feels like this viewpoint is not representative of the majority of the workers and is making attempts to send out flyers and dissuade voting for the union. Apple’s Project Titan (its autonomous electric vehicle) was in talks with Hyundai and Kia. They were said to be close to a deal in which Hyundai would provide the foundation for the electric vehicle but recently it has been said that the companies are in a paused status on the deal. Apple may keep these talks with Hyundai continuing under the table but nothing is certain as Hyundai says Apple is in talks with many global vehicle companies at the moment. 

Rise in the Dollar

The value of the Dollar is rising, and why it actually might be good for stocks

Usually, when the dollar is rising in value it reflects that global investors have a bearish outlook on the equity market as a whole and are moving their money into more safe-haven assets like currencies. However, the strength of the dollar this time around is an indication that the United States Economy has a highly positive outlook relative to other countries around the world in the long term as countries open back up from the pandemic. Interest Rates are also said to rise faster than other countries in the United States which makes investing in the dollar more appealing. As the dollar strengthens it seems to be a case of positive economic outlook rather than risk-averse global trades being bearish on the global equity economy. 

Video Games 

EA entering the world of mobile gaming, and Reddit’s New valuation 

The popular video game publisher Electronic Arts just announced that they are going to acquire the mobile video game publisher Glu Mobile for 2.4 billion. This news comes a couple of weeks after EA outbid Take-Two Interactive software for racing game maker Codemasters Software. EA believes that the future is mobile gaming and these two acquisitions back that claim up. The acquisition greatly expands EA’s mobile gaming presence as it seeks to take market share away from Activision as it acquired the popular mobile-video game maker King back in 2016, the maker of candy crush. Reddit also just raised 250 million in a new funding round that doubles their valuation up to 6 billion. Reddit Ceo says they plan to spend that money on advertisements, consumer products, and video. 

Sources 

https://www.marketwatch.com/articles/dollar-is-rising-some-stocks-are-lagging-51612832977?mod=newsviewer_click

https://seekingalpha.com/news/3659783-reddit-raises-250m-in-new-funding-round

https://www.marketwatch.com/articles/electronic-arts-buys-glu-mobile-for-2-4-billion-small-screen-is-big-51612826809?mod=newsviewer_click

https://markets.businessinsider.com/earnings-calendar#date=02/12/2021&name=&countries=&eventtypes=103,99&tab=L

https://www.coindesk.com/cardano-polkadot-xrp-investors-bet-alternatives-ethereum

https://www.morningbrew.com/daily/issues/latest

https://www.washingtonpost.com/us-policy/2021/02/08/democrats-stimulus-checks-covid-relief/

Market Update (February 5)

Disappointing Job Results

January jobs report reflects a recovering, yet sluggish economy

The US Labor Department released the January jobs report, showing the US economy adding 49,000 jobs in the month of January and the unemployment rate falling to 6.3%, the first decrease in two months. This fell short of the 50,000 projected jobs gain, but it is a better than expected performance for the economy against the 6.7% unemployment rate projection. While this is positive news following the job losses incurred in December, Independent Advisor Alliance’s chief investment officer, Chris Zaccarelli has called these numbers “particularly underwhelming”. This jobs report only shows the public how fragile the US economy is at this moment and continued stimulus and cautious reopening of the private sector is still necessary. In spite of all this, investors are shrugging off the weak job results as they look forward to the likeliness of another stimulus relief bill.

Stock Market Hits Record Highs

Amid new potential stimulus, S&P 500 and Nasdaq indexes hit record highs

On Friday, the S&P 500 and Nasdaq indexes closed at record highs as the potential for another stimulus relief bill looms ahead. Friday morning, the US Senate approved a resolution allowing for the passage of a $1.9 trillion relief bill without any Republican support. This comes as news of another additional round of stimulus checks such as $1,400 per adult would be included in the new stimulus bill. It was an overall good day on Wall Street as oil and gold rose and the unemployment rate fell to 6.3%. Today’s gains gave the Dow Jones its best 5-day stretch since November, as the index ended the week up nearly 4%. Investors are feeling more confident about entering the stock market, following modest wage gains over the last month and the Federal Reserve holding rates steady at near zero levels. Corporate earnings have also boosted the market and investor sentiment as companies such as Apple and Microsoft have posted “stunning” results, with Apple earning over $100 billion of revenue over the 4th quarter for the first time. This has been an overall great week for the market and economists now may have to rethink their future economic projections.

COVID-19

Johnson & Johnson, AstraZeneca, & Covid-19

As we start the second month of 2021, Covid-19 still remains the number one issue. In spite of rising cases, progress is being made across the country as pharmaceutical companies Johnson & Johnson and AstraZeneca are moving ahead with their respective vaccines. Johnson & Johnson has officially requested the FDA to grant them emergency authorizations to approve, manufacture and distribute this vaccine, while studies on AstraZeneca show that its vaccine is able to protect against the new, more contagious variant of the virus found in the United Kingdom, also known as variant B.1.1.7. In addition, back home in the United States, the federal government is seeking to ramp up its vaccination efforts as the Pentagon will be deploying over a thousand active duty members to assist vaccination sites. Lastly, there is the increasing likeliness of a massive $1.9 trillion Covid-19 stimulus bill passing. News of these events have been largely influencing the markets these past few weeks, driving the major indexes up and this week and providing the Dow Jones with its best 5-day stretch since last November.

Works Cited

“CL.1: Crude Oil WTI (NYM $/Bbl) Front Month Overview.” MarketWatch, www.marketwatch.com/investing/future/crude%20oil%20-%20electronic.

“Market Summary – US Stock Market Overview.” MarketWatch, www.marketwatch.com/tools/marketsummary.

Monica, Paul R. La. “Stocks Rise Again Even as Jobs Report Shows Slow Recovery.” CNN, Cable News Network, 5 Feb. 2021, www.cnn.com/2021/02/05/investing/dow-stock-market-today-jobs-report/index.html.

Robbins, Benjamin Mueller and Rebecca. “Covid-19 Live Updates: AstraZeneca Shot Found to Be Protective Against Variant First Seen in U.K.” The New York Times, The New York Times, 5 Feb. 2021, www.nytimes.com/live/2021/02/05/world/covid-19-coronavirus.

“S&P 500, Nasdaq Close at Record Highs as $1.9 Trillion Stimulus Package Works Its Way through Congress.” Business Insider, Business Insider, markets.businessinsider.com/news/stocks/stock-market-news-today-record-highs-trillion-stimulus-moves-ahead-2021-2-1030049746.