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TOGETHER WITH
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Good morning.
It’s a rare day we include an image in this section, but the US Postal
Service’s new mail truck (going into service in 2023) gave us no choice.
Because everyone's looked at an airport shuttle and thought, 75% more
windshield, please?
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NASDAQ
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13,397.52
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- 1.00%
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S&P
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3,874.36
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- 0.06%
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DOW
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31,532.96
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+ 0.04%
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GOLD
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1,804.00
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- 0.24%
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10-YR
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1.361%
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- 0.20 bps
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OIL
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61.90
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+ 0.32%
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*As of market close.
Here's what these numbers mean.
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Markets: #buythedip trended on Twitter
after stocks took a dive early in the day. Then, the dip turned into an
escalator and the S&P staged its biggest comeback since June to end
in the green.
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Covid: With J&J adding 20 million more vaccine doses next month, the US will be able to fully vaccinate 130 million Americans by the end of March, per Bloomberg.
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Francis Scialabba
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In the past few days, biz news has been dominated
by jitters around your favorite concept from Econ 101. No, not how to
flirt with people in the library using only eye contact—inflation.
When we say
jitters, we mean market shifts. The yield on the 10-year US Treasury
note is at 1.36%, a big jump from the 0.9% where it started the year
(remember, higher yield = lower price = investors are dumping their
bonds), while copper and oil have spiked. Translation: Investors think
economic growth is about to hit ludicrous speed and they're running for
cover in assets that hedge against inflation.
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Inflation? During a pandemic? Some
have sounded the alarm due to the double whammy of 1) Congress's
historically huge relief packages and 2) the Fed's efforts to spur
liquidity. Both are geared toward helping the economy through the Covid
crisis and could theoretically lead to inflation. Plus,
inflation is like a midafternoon snack—once it gets going, it can build
momentum and spiral out of control.
Tech shares
in the US and Europe have slumped in anticipation of potential interest
rate hikes, a move central banks might make to keep inflation at bay.
But many economists say there's no need to worry
Including the ones who actually oversee the economy. Treasury Secretary Janet Yellen and Fed Chair Jerome Powell both said
in recent days they're not worried about inflation, and Powell signaled
yesterday he'll keep interest rates low where Lil Jon wants them. These
soothing words helped stocks mount their big comeback yesterday.
- Both
officials also called for more spending to ease the economic hardships
Americans are facing, noting that millions of people are still
unemployed.
Zoom out: Indicators
of inflation usually show up in the job market; when it overheats,
inflation can start to snowball. But the current job market is like the
frozen burrito you threw in the microwave—hot on the surface (high
yearly wage growth), but icy at the core (elevated unemployment
claims).
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Francis Scialabba
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People really want to get new ones during a pandemic. US home prices jumped 10.1% in December, their biggest monthly gain since 2014, according to S&P CoreLogic Case-Shiller.
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The hottest real estate markets? Phoenix (14.4% price growth year-over-year), Seattle (13.6%), and San Diego (13%).
Prices are
also jumping in more unexpected places. Homes in Atlantic City, NJ,
which has fallen on some tough times since Nucky Thompson roamed the
boardwalk, saw a 30% bump
in Q4 2020. As the WSJ reports, the pandemic has accelerated the city's
shift from gambling resort → liveable seaside community.
Zoom out: A
mix of historically low interest rates, the pandemic pushing people out
of small apartments, and an inventory squeeze have juiced prices to
unaffordable levels for many potential homebuyers. In the past week,
mortgage rates have shot up with bond yields—but they're still well
below last year's levels.
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On Monday evening, electric automaker Lucid Motors confirmed it's going public via SPAC at a valuation of $24 billion. EVs, record-breaking SPAC...is that sound Wall Street drooling?
Not this time
Shares of
Churchill Capital IV (CCIV), the special purpose acquisition company
that is taking Lucid public, fell 39% yesterday. CCIV's shares had
previously risen 472% following January reports of the deal—real
"GameStop vibes," Axios writes.
CCIV's plunge doesn't necessarily mean this is a bad deal.
Lucid's hefty valuation reflects tremendous investor interest in the EV
market and high expectations for its upcoming luxury Air sedan. Lucid
will raise $4.4 billion through the CCIV deal and use that money to help
fund production and expansion into new vehicle lines.
Zoom out: Yesterday's
news pushed Lucid's valuation to $62 billion...even though it hasn't
delivered a single vehicle yet (GM is worth about $74 billion). Sky-high
valuations for other EV startups that have SPAC'd—including Nikola,
Lordstown Motors, and Fisker—have sparked concerns about a bubble approaching its pop.
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When you
spend most of your time reading the news, you find some interesting
stuff. Here's 1 quote, 1 stat, and 1 long read that we discovered
yesterday and had to share.
Quote: "The
strategic monkey reserve is exactly what we needed to deal with Covid,
and we just didn't have it."—Keith Reeves, a principal investigator at
the Center for Virology and Vaccine Research at Harvard Medical School,
told the NYT that a shortage of lab monkeys
hampered Covid-19 vaccine efforts. Now, there's talk of creating a
"strategic monkey reserve," similar to what the US has done with oil and
grain.
Stat: Oat-based dairy product sales tripled in 2020 to overtake soy milk
as the second most popular plant-based milk (almond milk remains king).
Yesterday, the Swedish vegan milk company Oatly filed confidentially
for an IPO, and it's aiming for a valuation of up to $10 billion.
Read: On creativity and TikTok. (Eugene Wei)
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Francis Scialabba
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Every Wednesday, we answer a reader-submitted question about business and the economy. Got something to ask us? Click here.
Q from Daniel in Atlanta: What really is a market cap?
Brew's answer: Market
capitalization, aka "market cap," is a measure of a public company's
worth based on the dollar value of outstanding shares. Outstanding
shares = stock that's been issued and is available to investors.
Market cap
is a useful tool to see where a company stacks up against competitors
and how investors feel about its future growth potential. Companies are
typically labeled as small-cap ($300 million–$2 billion), mid-cap
($2–$10 billion), or large-cap ($10+ billion).
- Market cap can fluctuate as share prices move or if the company issues new shares or buys back stock.
- Worth noting: Market cap =/= how much it costs to buy a company.
Real world example: Last year, Tesla's market cap surpassed that of the nine biggest global automakers combined...even though it sells far fewer vehicles. Remember, share price doesn't just reflect the value of a company today, but where investors see it going.
- Tesla is the leading EV producer, and legacy automakers and EV startups are largely playing catch up.
- Even though Tesla only recently became profitable and has had numerous issues meeting production schedules, investors believe that the EV market is going to explode and Tesla along with it.
Ask us something else here.
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Madison Square Garden
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Last night, fans were allowed to watch the NY Knicks lose a basketball game in person for the first time in 352 days.
Across the
East River, the Brooklyn Nets also welcomed back fans for the first time
since the pandemic started. Both arenas (Madison Square Garden and the
Barclays Center) are capped at 10% capacity for now, which means
priority is given to season ticket holders and people who tend to eat
shrimp cocktail while watching basketball.
The backstory: NY
Gov. Andrew Cuomo has allowed attendance at arenas provided that fans
show a negative PCR Covid-19 test 72 hours before the event starts. The
Barclays Center is even sending ticket holders an at-home Covid-19 test
as part of the price of admission. It’s the first major North American sports venue to do so.
Zoom out: The
Knicks and Nets make it 14 NBA teams (out of 30) that are allowing fans
to attend games. No arena is allowing more than 25% attendance.
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Home Depot sales increased 25% in the fourth quarter of 2020, capping a year in which it raked in a record $132 billion in sales.
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Square,
Jack Dorsey’s fintech company, bought $170 million more in bitcoin. It
also doubled its revenue last quarter thanks to more trading on its Cash
App.
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Snap said it was in a position to do "multiple years" of more than 50% revenue growth.
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Microsoft,
SolarWinds, and other cybersecurity firms defended their actions during
the massive breach of government agencies and corporations by suspected
Russian hackers.
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Tiger Woods
suffered serious leg injuries in a car accident in California, but
they're not life-threatening. The golfer underwent surgery in the
afternoon.
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If you gotta wear a shirt, it might as well be the softest tee in town. The Strato Tech Tee by Vuori is a quick-drying, moisture-wicking workout tee that is perfect for everything from running to reading newsletters. Get 20% off your first purchase today.*
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Up your fort game: Children’s
furniture is getting really modular and hip, with brands like Nuggets
(not reconstituted chicken patties) reimagining playtime. Read up on the
growing sector here, from Retail Brew writer Halie LeSavage.
Anti-productivity: Listen to the “ambient” sounds of The Office on this interactive site.
It’s actually cake: Well, pancakes. Here are ten pancake recipes from top chefs.
*This is sponsored advertising content
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Today, McDonald’s is releasing three versions
of its new chicken sandwich, joining every other fast food chain that
released a new chicken sandwich. But can you tell them apart? Match the
chicken sandwiches pictured below with the correct fast food company.
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Options: Chick-fil-A, Wendy's, Burger King, McDonald's, KFC, Popeyes
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When you share the Brew with your network, you earn free swag like our classic Morning Brew t-shirt.
Are
you one of those people who is always going places? Then you probably
need a shirt. Might as well be this bad boy with the Morning Brew logo
plastered across the chest.
Hit the button below to learn more and access your rewards hub.
Click to ShareOr copy & paste your referral link to others:
morningbrew.com/daily/r/?kid=a17a7110
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- KFC
- Wendy’s
- McDonald’s
- Chick-fil-A
- Burger King
- Popeyes
Breaking News: Donald and Melania Trump Under Fire After Unexpected Announcement
They Receive Scrutiny From Politicians And Sponsors For This
{Continue Reading}
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February 24
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| FEATURED BIOGRAPHY
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| Charles V
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| FEATURED EVENT
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| 1868
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| U.S. President Andrew Johnson impeached
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| MORE EVENTS ON THIS DAY
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2020: American film producer Harvey Weinstein,
whose career ended amid numerous allegations of sexual harassment and
assault, was convicted of rape and a criminal sex act; many viewed the
verdict as a victory for the #MeToo movement, which sought to assist
survivors of sexual assault.
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| ADVERTISEMENT |
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Today's
Headlines...
Biden’s
Far-Left Agenda on Full Display in First Month
Daily
Beast Editor Ends Up Putting AOC on Blast after Trying to Smear
Tucker
Trump to Seek His Revenge in 2024? Get Your Gear
Here… (sponsor)
CNN’s
Chris Cuomo Instantly Gets Smeared on Twitter for Posting Ironic Tweet
School
Board Caught Trashing Parents for Wanting Schools to Reopen
February 24th, 2021
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| Show your enthusiasm for re-electing President Donald J. Trump by proudly wearing this FREE Trump 2020 lapel pin!These are the PERFECT gifts for friends and family who support our President Trump's Re-Election for 2020! Read More › | | |
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