Good morning. Happy Friday.
The Asian/Pacific markets were very weak. Japan, China, Hong Kong, South Korea, India, Australia, Thailand and the Philippines posted big losses. Europe, Africa and the Middle East currently lean down. Denmark, the UAE, Russia, South Africa, Norway, Hungary, Austria, Sweden and Saudi Arabia are down the most. Futures in the States point towards a moderate gap down open for the cash market.
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The dollar is up. Oil is down; copper is up. Gold and silver are up. Bonds are flat. Bitcoin is flat.
Stories/News from Seeking Alpha…
The magic returns
Closed since March 2020 due to the coronavirus pandemic, Disney’s (NYSE:DIS) two California theme parks are getting ready for their grand reopening today. Things will still look a little different with guests required to wear masks and Mickey Mouse maintaining social distancing, though the company has called back more than 10,000 cast members. The reopening of Disneyland and California Adventure will also be restricted to California residents, at least initially, despite California allowing vaccinated out-of-state visitors to visit its theme parks.
By the numbers: The stringent guidelines have been quite costly. Disney’s “Parks, Experiences and Consumer Products” division accounted for 37% of its $69.6B in total revenue in 2019, or around $26.2B, but a year later, revenue shrank to $16.5B, or around 25% of the company’s $65.4B total revenue. The rules have also been controversial. While California officials only began allowing theme parks to reopen from April 1, Disney had petitioned to unlock its property gates starting in November. Company executives even cited successful reopenings at some of its other theme parks, including Disney World in Florida.
Technology is at the forefront of the reopening. Guests are being urged to use cashless pay options – via the parks’ MagicBands or their smartphones – and to use the parks’ mobile ordering system to buy food. Virtual ride queues will also help maintain social distancing, while an online reservation system will assist with crowd control. “Genie,” a new digital offering from Disney, will additionally optimize park trips for guests by creating a clear itinerary of what they want to do and eat during their stay.
Stock price: Given the strain on live entertainment, a greater focus on Disney’s streaming efforts has been factored into DIS shares over the past year, with the stock rising 75% to $185. “There’s a lot more at play,” Michael Wiggins De Oliveira writes in a recent SA article, saying that “while Disney+ makes the biggest headlines, it’s not the whole Disney story.” Others like Trapping Value say while the “reopening economy should also benefit Disney’s theme parks and boost earning potential in 2021-2022, at the current valuations, all of this (and more) is being discounted.” “Disney now trades at 19X the most optimistic 2025 estimates,” according to the SA author, who calls the stock the “best short hedge on the market.”
Inflation and earnings
U.S. stock index futures ticked lower overnight, dipping 0.4%, as investors continue to digest the latest downpour of earnings and economic data. While Amazon (AMZN) was the last of Wall Street’s mega-cap tech companies to publish results on Thursday (see below), the party is not over yet. U.S. oil majors take the stage this morning as investors see if Exxon Mobil (XOM) and Chevron (CVX) recovered from last year’s pandemic-driven losses.
Bigger picture: Yesterday, the S&P 500 closed at another record high following robust U.S. growth data. The first snapshot of first-quarter GDP detailed an expansion of 6.4%, beating estimates of a 6.1% annualized rate, as households and the government shelled out big bucks on retail items, vaccines and aid to businesses. That left the world’s largest economy within 1% of its peak reached in late 2019, just before the coronavirus pandemic came to the U.S. The Labor Department also revealed that 553,000 new weekly jobless claims were filed in its latest report, marking another pandemic low.
On the radar today is fresh data on the American consumer including personal income, spending and sentiment. The information could also provide investors, as well as the Federal Reserve, with a useful gauge of how quickly prices are rising across the U.S. Earlier this week, Fed Chair Jerome Powell reiterated that any increases in inflation are likely to be transitory – and would ease after supply chain issues subside – but others see possible consequences.
Analyst commentary: “All arrows are pointing to another increase in inflationary pressures. Keep in mind, the Fed knows this; they are prepared for it,” wrote Patrick Leary, chief market strategist at Incapital. “While I won’t say whether or not the inflation we are seeing right now will indeed be transitory or more sustained, I am willing to bet that it will go higher and persist longer than the market will tolerate.”
Bolstered by sustained demand, Amazon’s (AMZN) first quarter earnings blew through expectations, but a rumored stock split was not announced. Shares gained 2.4% to reach the $3,550 level as Q1 profits more than tripled to $8.1B, while revenues topped $100B for the second straight quarter. A bullish forecast was also issued for Q2, with Amazon predicting sales of between $110B and $116B (24%-30% growth), exceeding analysts’ expectations.
By the numbers: Almost half of Amazon’s operating income came from AWS – the company’s cloud services division – which got a boost from recent work-from-home trends, while Prime Video’s streaming hours were up over 70% on the year. “Two of our kids are now 10 and 15 years old – and after years of being nurtured, they’re growing up fast and coming into their own,” said CEO Jeff Bezos, referring to the two divisions. Amazon’s “Other” category, which is primarily made up of advertising, also notched a bumper quarter, logging revenue growth of 77% Y/Y to $6.9B.
Meanwhile, the company confirmed that this year’s Prime Day will take place in June, which should help lift year-over-year comparisons for Q2 revenue. Amazon’s two-day shopping bonanza typically takes place in July, but the retail giant postponed the event to October last year due to pandemic-related uncertainty. “In many areas, July is vacation month, so it might be better for customers, sellers and vendors to experiment with a different time period,” noted CFO Brian Olsavsky.
Other happenings: Before it published its earnings, Amazon detailed it would spend more than $1B on raising wages for over half a million of its U.S. operations workers. That translates into a pay boost of at least 50 cents to up to $3 an hour, and was initiated early, as “volumes remain just as strong as they were at the beginning of the pandemic.” Company executives declined to comment on the CEO transition plan, however, which will see cloud chief Andy Jassy replace Jeff Bezos as head of all of Amazon.
The “Woodstock of Capitalism” is going virtual for a second year, as the company run by 90-year-old billionaire Warren Buffett continues to take precautions to prevent the spread of COVID-19. Berkshire Hathaway’s (BRK.A, BRK.B) annual meeting will take place on Saturday, and move to Los Angeles, enabling Warren Buffett’s 97-year-old business partner Charlie Munger to attend without traveling. Also sharing the virtual stage with the two nonagenarians will be vice chairmen Gregory Abel and Ajit Jain.
Snapshot: Last year, Buffett and Abel gave shareholders some sense of how the company’s businesses were handling the downturn caused by the pandemic. A year on, shareholders will likely get more details on which businesses are hurting and which are profiting.
Berkshire Hathaway’s businesses span the economy, owning businesses in transportation, utilities and energy, retail, and insurance and reinsurance. A perennial topic of interest is where Buffett plans to spend the cash sitting on the company’s balance sheet. As of Dec. 31, 2020, Berkshire had cash, cash equivalents, and short-term investments of $138.3B.
“We expect capital management will again be a key topic at this year’s annual meeting,” UBS analysts led by Brian Meredith wrote in an April 26 note, estimating that the company bought back ~$5B of shares in Q1. Questions about potential acquisitions are also sure to come up, but amid increased competition from SPACs, Buffett already eased up on talk about an “elephant-sized” acquisition in his annual letter to shareholders. Instead, he’s content to take stakes in large well-run companies like Apple (AAPL), the biggest holding in its stock portfolio.
Go deeper: Not known for friction with its shareholders, Berkshire also faces two shareholder proposals this year – one on diversity and inclusion and the other on climate change. Glass Lewis, a proxy advisory firm, is recommending that shareholders approve both. Another shareholder advisory firm, ISS, is recommending that shareholders withhold votes for four board members due to concern over executive pay policies.
China widens fintech crackdown
Taking a page from the Ant Group playbook, China has imposed sweeping restrictions on the fast-growing financial divisions of 13 companies including Tencent (OTCPK:TCEHY), ByteDance (BDNCE), JD.com (NASDAQ:JD), Meituan (OTCPK:MPNGF) and Didi (DIDI). The requirements include stricter compliance when listing abroad, as well as curbs on information monopolies and the gathering of personal data. Companies must also restructure their financial units into holding companies and sever “improper links” between their existing payments services and financial products.
Backdrop: China already scuttled the world’s largest IPO last year, when it pulled Ant Group’s (NYSE:BABA) listing, after founder Jack Ma criticized the government for tightening financial regulation. This month, Chinese regulators outlined an overhaul of Ant, which would shake up its business to be supervised more like a bank and cut off any “improper linking of payments with other financial products.” The company would also be required to fold its Jiebei and Huabei lending services into its consumer finance arm, as well as apply for a license for personal credit reporting and improve consumer data protection.
The fintech sector crackdown is another example of the escalating tensions between the state and China’s private sector. President Xi has been exerting tighter control over the economy, concerned by tech companies’ growing influence over every aspect of Chinese life as well as the vast amounts of data they’ve collected. For its part, China says there are “widespread problems” that could jeopardize its financial system, which is already struggling with rising levels of debt. Among the deep-rooted issues are offering banking and other financial services without license, engaging in unfair competition and inadequate corporate governance.
Effects: “Good days have gone,” wrote Jefferies analyst Shujin Chen, adding that the changes will likely hit profits and growth on several fronts. The firms will have to expend more capital to set up holding companies, payment and shopping apps will have to cut links with other financial products, and fintech firms will find it more difficult to get publicly listed. “We reiterate that China has shifted from encouraging personal consumption lending to curbing rapid increases in residential leverage.”
What else is happening…
Copper tops $10,000/ton for the first time since 2011.
UFC parent Endeavor Group (NYSE:EDR) pops following IPO.
Microsoft (NASDAQ:MSFT) cuts online store fees for game developers.
FDA proposes ban on menthol cigarettes and flavored cigars.
Barclays (NYSE:BCS) beats expectations as loan impairment charges slide.
FAA probes electrical issues on Boeing (NYSE:BA) 737 MAX planes.
Report… Forbes weighs SPAC deal or M&A sale at $700M valuation.
AstraZeneca (NASDAQ:AZN) struggles with data needed for FDA approval.
GM (NYSE:GM) to invest $1B in Mexico for electric vehicle production.
Ford (NYSE:F) plunges 10%; Morgan Stanley sees challenges ahead.
Thursday’s Key Earnings
Altria (NYSE:MO) -1.2% posting a set of mixed results.
Amazon (NASDAQ:AMZN) +2.4% AH as Q1 earnings smashed estimates.
Bristol-Myers Squibb (NYSE:BMY) -4.8% missing expectations.
Caterpillar (NYSE:CAT) -2.1% flagging supply chain risks.
Comcast (NASDAQ:CMCSA) +4.3% with Peacock hitting 42M subscribers.
Gilead Sciences (NASDAQ:GILD) -2.5% AH on earnings miss, COVID recovery uncertainty.
Kraft Heinz (NASDAQ:KHC) +3.9% with organic sales growth of 2.5%.
Mastercard (NYSE:MA) -1.7% despite Q1 beats, spending recovery.
McDonald’s (NYSE:MCD) +1.2% smashing comparable sales expectations.
Merck (NYSE:MRK) -4.4% as Q1 trailed estimates.
MicroVision (NASDAQ:MVIS) -19.8% AH plunging further after Q1 misses.
Newmont (NYSE:NEM) -2.9% as COVID disruptions led to lower production.
NIO (NYSE:NIO) +0.7% AH amid Q1 beats, supply chain worries.
Skyworks Solutions (NASDAQ:SWKS) -7.3% AH posting narrow FQ2 beats.
Southern Co. (NYSE:SO) +1.3% as energy demand rebounded.
Twitter (NYSE:TWTR) -11.2% AH on a user miss and low guidance.
Today’s Economic Calendar
8:30 Personal Income and Outlays
8:30 Employment Cost Index
9:45 Fed’s Kaplan Speech
9:45 Chicago PMI
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
3:00 PM Farm Prices
Good morning. Happy Thursday.
The Asian/Pacific markets closed mostly up. China, Hong Kong, New Zealand, Indonesia and Portugal led while South Korea was weak. Europe, Africa and the Middle East lean to the upside. Poland, Turkey, Finland, Hungary and Portugal are up more than 1%; Germany, the UAE and Saudi Arabia are down. Futures in the States point towards a relatively big gap up open for the cash market.
VIDEO: Recent Trades Discussed – DASH, KOPN, NET, NIO, SKLZ
The dollar is unchanged. Oil and copper are up. Gold and silver are up. Bonds are down. Bitcoin is flat.
Stories/News from Seeking Alpha…
Another strong earnings report is likely on the way from Amazon (NASDAQ:AMZN) amid record profits, surging sales and subscriber growth. Consensus EPS estimates are seen at $9.62 (+92% Y/Y), while revenue expectations are forecast at $104.65B (+38.6% Y/Y). E-commerce has skyrocketed in the U.S. and internationally during the pandemic, while the company’s cloud business, Amazon Web Services, remains a top performer. Amazon’s ad business, which is lumped into the “other category,” is also set to benefit from recent trends in the industry, and has emerged as a growing player in online advertising.
While “shelter in place” benefits may recede over time, Wedbush analyst Michael Pachter expects them to have some “lasting impacts.” “We think that new habits learned during the pandemic may be difficult to break for many Prime customers, namely the convenience of grocery shopping,” he notes. “We think that SIP accelerated the growth of Amazon Fresh and we expect customers won during the pandemic to remain customers.” Pachter has an Outperform rating on the stock and $4,000 target, and values the U.S. grocery market opportunity at $800B.
Other catalysts: Investors will be watching for commentary on the upcoming Prime Day date, as well as updates on Amazon Pharmacy and the CEO transition announced earlier this year.
Stock split? Until the beginning of this week, Amazon shares were up only 5% YTD, the third best-performing component of the closely watched FAANG index (Facebook, Amazon, Apple, Netflix and Google). The advance also trailed the 12% rise of the S&P 500 and 9.5% climb of the Nasdaq Composite. Things have turned around rapidly over the past few days, on word that the company may announce a highly-anticipated stock split. Shares have climbed an additional 5% since Monday, and topped the $3,500 level in premarket trade, as options activity saw Amazon record heavy above average call volumes with about three times as many calls as puts.
Fed Chair Jay Powell painted a rosy picture of the U.S. economy on Wednesday, but showed no sign that the central bank would change monetary policy anytime soon due to the “uneven and far from complete” recovery. That’s good news for investors, who had been watching if the Fed would budge after a series of positive economic reports. “It will take some time before we see substantial further progress,” Powell added, choosing not to focus on steps that would be needed to eventually withdraw monetary support.
Bigger picture: Despite the dovish tone, stocks dipped during the post-FOMC meeting news conference as Powell addressed the topic of financial stability. “You are seeing things in the capital markets that are a bit frothy. That’s a fact. I won’t say it has nothing to do with monetary policy, but it also has a tremendous amount to do with vaccination and reopening of the economy.” He also reiterated that any increases in inflation are likely to be transitory and would ease after supply chain issues subside.
Meanwhile, President Biden delivered is his first address to a joint session of Congress on Wednesday night. “America is ready for takeoff,” he declared, unveiling his $1.8T “American Families Plan” that would expand the social safety net in the U.S. That comes on top of the $2.3T “American Jobs Plan” proposed in March, as well as the $1.9T “American Rescue Plan” that was passed to combat COVID-19. The new spending measures would be funded through corporate tax hikes and taxing the rich, and while details are still being debated, the stimulus is likely to fuel further economic growth. Stock futures rose overnight, but that was also after Apple (AAPL) and Facebook (FB) lifted sentiment with two sets of bumper earnings (see below).
On tap: Thursday is the busiest day of the earnings season, with roughly 11% of the S&P 500 set to report Q1 results. That includes reports from Caterpillar (CAT) and McDonald’s (MCD) before the open, as well as Amazon (AMZN) and Twitter (TWTR) after the close. Don’t forget the latest jobless claims data from the Labor Department (expected to be the lowest level since the pandemic) and the first snapshot of Q1 GDP growth (forecast at a whopping 6.1% annualized rate). “It will be a solid GDP number,” commented Ryan Sweet, senior economist at Moody’s Analytics. “It’s one small milestone in many that we have to hit before we can say we have fully recovered from the recession.”
(Another) tale of two tech giants
Apple (AAPL) shares climbed 2.5% to $137 after fiscal second-quarter earnings easily topped expectations on top and bottom lines as well as across business units. EPS of $1.40 beats estimates by $0.42, while revenues jumped nearly 54% to $89.6B, well ahead of consensus for $77.3B. The company also declared a dividend hike of 7% (to $0.22/share) and an increase of $90B to an existing share repurchase program (two sources of return closely watched by shareholders).
Breakdown: Apple reported double-digit growth in every single one of its product categories, while its most important product line, the iPhone, was up 65.5% from last year. Its Mac and iPad sales did even better during COVID lockdowns, with its computers up 70.1% and iPad sales growing nearly 79% on an annual basis. Apple didn’t issue official guidance for the coming quarter (a trend that started during the pandemic), though it does expect revenue to rise by double digits Y/Y despite some chip shortages.
Shares of Facebook (FB) also joined the rally, soaring 6% following a Q1 report where it blew ahead of financial metrics and delivered user growth in line with expectations. Total revenue rose 48% to $26.2B, while net income skyrocketed 94% to $9.5B. “We had a strong quarter as we helped people stay connected and businesses grow,” announced CEO Mark Zuckerberg. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”
Go deeper: Of particular note was Facebook’s ad business, where sales were driven by a 30% increase in average price per ad along with a 12% gain in the number of ads delivered. However, the company is bracing for “ad targeting headwinds” due to recent industry changes. Most notably, this includes Apple’s recent privacy changes rolled out in iOS 14.5, which makes it more difficult to serve up targeted ads for iPhone and iPad users.
Verizon bet goes sour
Many in the industry were wondering what the company was thinking at the time, but it looks like Verizon (VZ) has finally realized it shouldn’t have splurged a combined $9B on AOL and Yahoo. There goes the telecom giant’s expensive and unsuccessful bet on digital media…
Flashback: Looking to accumulate a portfolio of once-dominant websites, Verizon shelled out billions of dollars for AOL in 2015 and Yahoo in 2017. It then reorganized the businesses under former AOL CEO Tim Armstrong, calling the combined division “Oath” and signaling its intention to challenge digital advertising powerhouses like Facebook (FB) and Google (GOOG, GOOGL). Only a year later, Verizon wrote down about half the value of the digital media business and announced layoffs across the division. The HuffPost news unit was ultimately sold to BuzzFeed, while Tumblr was offloaded for a nominal sum to the owner of WordPress.
Bigger yet, the Oath digital media business failed to reach its target of $10B in annual revenue by 2020. Verizon has also increasingly focused on partnerships with streaming services like Disney+ and Hulu – that can be bundled with its wireless and internet plans – as well as spectrum licenses that will support its ultrafast 5G wireless network. It even recently told investors that capital spending on network equipment and fiber optic cables this year could reach up to $21.5B.
What’s next? Verizon is exploring a sale of its media assets, including parts of Yahoo and AOL. The transaction may include private equity firm Apollo Global Management (APO), and lead to a deal worth $4B-$5B, WSJ reports, though other details couldn’t be learned.
What else is happening…
Amazon (AMZN) raising pay for more than 500,000 U.S. workers.
UFC parent Endeavor (NYSE:EDR) prices IPO at top of range.
Dogecoin (DOGE-USD) surges as Musk names himself ‘Dogefather.’
Again? Boeing (NYSE:BA) halts 737 MAX deliveries due to electrical issues.
Chip shortage… Ford (NYSE:F) expects to lose half of Q2 production.
Samsung (OTC:SSNLF) reports profit jump on smartphone, TV sales.
Will the Biden administration propose a ban on menthol cigarettes?
Report… Lions Gate (NYSE:LGF.A) eyed Showtime (NASDAQ:VIAC) but was rejected.
Shell (RDS.A) raises dividend as commodity prices fuel Q1 beat.
California reports nearly 1,400 COVID-19 cases in fully vaccinated people.
Wednesday’s Key Earnings
Apple (NASDAQ:AAPL) +2.5% AH with sales up 54%, hiking dividend/buybacks.
Boeing (BA) -2.9% while recovery gained traction, but remained uneven.
Facebook (NASDAQ:FB) +6% AH as ad recovery drove blowout quarter.
Ford (F) -3.1% AH expecting to lose half of planned Q2 production.
Qualcomm (NASDAQ:QCOM) +5.3% AH on strong smartphone demand.
Shopify (NYSE:SHOP) +11.4% as GMV doubled in Q1.
Spotify (NYSE:SPOT) -12.3% amid soft MAUs, guidance uncertainties.
Teva Pharma (NYSE:TEVA) -2.4% unlikely to join COVID-19 vaccine production.
Today’s Economic Calendar
8:30 Initial Jobless Claims
8:30 GDP Q1
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Fed’s Quarles Speech
2:00 PM Fed’s Williams Speech
4:30 PM Fed Balance Sheet
Good morning. Happy Wednesday.
The Asian/Pacific markets did well. China, Hong Kong, India, Thailand and the Philippines led while South Korea lagged. Europe, Africa and the Middle East lean to the upside. Poland, France, Norway, Saudi Arabia and the Czech Republic are up; the UAE, Russia and Sweden are down. Futures in the States point towards a flat open for the cash market.
My interview with WorldClassPerformer.com
The dollar is up. Oil is up; copper is down. Gold and silver are down. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
The Fed’s monetary policy-setting committee is expected to show exactly how patient it is this afternoon, revealing its thoughts on inflation, bond buying and risks to the financial system. While the FOMC isn’t expected to adjust monetary policy at the April meeting, investors will be looking for whether the officials start “thinking about thinking about” tapering the pace of $120B+ monthly asset purchases. Most economists aren’t expecting that to start until the central bank’s June meeting at the earliest.
Bigger picture: Even talking about easing up on the Fed’s purchases of Treasurys and mortgage-backed securities will be a delicate balance. In 2013, Fed officials triggered a “taper tantrum” in the bond market – which pushed yields on the 10-year Treasury up by half a percentage point in a month – when they started to indicate a reduction in asset purchases was on the horizon. That’s something current Fed officials will be careful to avoid, as the higher interest rates would threaten the economic recovery.
In its last statement, the Fed said it would continue its pace of buying at least $80B of Treasury securities per month and at least $40B per month of MBS “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals.” So any indication that progress has been made towards those goals may be significant and could indicate that officials would consider moving up plans to adjust policy. Investors and economists will also be listening to how Fed Chair Jerome Powell characterizes inflation (and core numbers), which can be a sign that the economy is running too hot. Until this point, he has maintained that any spike in price increases will be “transitory.”
Go deeper: Powell is likely to acknowledge that the economy is making progress given the far better than expected employment report in March, when the economy added 916,000 jobs vs. the 650,000 expected. Furthermore, jobless claims last week also hit a 13-month low, and while COVID vaccinations continue apace, the Fed Chair is likely to point out that the virus and its variants still pose a risk to the economic outlook. Overnight, the yield on the 10-year Treasury climbed 2 bps to 1.65%, the same level where the rate stood on the day of the last Fed meeting.
Major averages traded around the flatline on Tuesday, and similar sentiment was seen overnight. Dow and Nasdaq futures dipped 0.2%, while contracts linked to the S&P were marginally higher. Traders appear to be in wait-and-see mode before the big Fed meeting, as well as the latest slew of corporate earnings.
Quote: “Any clues offered in the board’s statement or in the subsequent press conference about potential QE tapering – when and how fast – would likely move both the stock and bond markets,” Leuthold Group chief investment strategist Jim Paulsen declared. “Many FAANGs are [also] reporting this week and the stock market may wait until some of these key reports are out before deciding on its next major direction.”
Others think Powell has the potential to rattle Wall Street if he sounds too hopeful. “The markets may end up reading too much into his optimism and not enough into the need for patience to see more data come through,” said Morgan Stanley’s Matthew Hornbach. “I’m expecting the chairman to frame it in that way. Great data, we just need a lot more of it.”
Also on watch: The economic calendar today includes some high-profile earnings from manufacturing heavyweights like Boeing (BA) and Ford (F), as well as Big Tech names like Apple (AAPL) and Facebook (FB). At 9 p.m. tonight, President Biden will also unveil his “American Families Plan” at a joint address to Congress (see below). Expectations of massive stimulus and a booming economy have helped propel the stock market since Biden took office and have even resulted in the hottest 100-day performance since the 1950s. While there are many factors that go into market movement, the S&P 500 has climbed 24.1% since Election Day 2020.
American Families Plan
President Biden’s “Build Back Better” agenda will be on display this evening as he addresses the nation following his first 100 days in office. At the heart of the speech is the “American Families Plan,” the second stage of a multi-trillion-dollar investment proposal. The first part, called the “American Jobs Plan,” was released at the end of March and would be funded by a corporate tax hike. The bill is currently working its way through Congress, though the administration is prepared to push it through without GOP support.
Meet the “American Families Plan”: The proposal is being referred to as an investment in so-called human infrastructure like child care, health care and education. It would be paid for by hiking taxes on the wealthiest 1% of Americans, most notably a near doubling of the capital gains tax rate on incomes above $1M to 39.6%. The top income tax bracket for households earning more than $400,000 is also expected to return to 39.6% (where it had been before the 2017 tax cuts).
As for the details of the bill, it would include free preschool for all three- and four-year-olds, and require that all pre-kindergarten teachers earn at least $15 per hour. It would also expand the Child Tax Credit through 2025, in addition to extensions for the Earned Income Tax Credit and subsidies in the Affordable Care Act. Paid family and medical leave are among other benefits, as well as education programs that include free community college.
Outlook: The White House has portrayed the plans as a Robin Hood-style endeavor to tax the rich in order to spend on the middle class and poor. A lot would need to be collected in order to pay for the two infrastructure proposals, which add up to a massive $4T. They also come on top of the $1.9T “American Rescue Plan” passed in early March to combat COVID-19. Legislative aides say Democrats plan to use reconciliation to move Biden’s plans through Congress, but it remains unclear what pieces will make it through to the final package.
Tale of two tech giants
Net profits at Google parent Alphabet (GOOG, GOOGL) surged by a whopping 162% last quarter, while revenue soared 34% to a record $55.3B. Pandemic factors helped drive up earnings like coronavirus lockdowns, online shopping and YouTube watching. That led to lots of clicking on ads purchased by retailers, which have increasingly turned to digital commerce as people stopped coming through the door during COVID-19.
Movement: Alphabet gained as its board authorized the repurchase of up to $50B of stock. Shares climbed 4.2% to $2,400, or by nearly $100, following the Q1 results.
Microsoft (MSFT) is also doing tremendously well. The company reported fiscal Q3 revenue of $41.71B, up 19% on the year, as well as the company’s largest quarterly revenue growth since 2018. “Over a year into the pandemic, digital adoption curves aren’t slowing down. They’re accelerating, and it’s just the beginning,” said CEO Satya Nadella. The firm also posted strong growth in gaming and the cloud, and guided to the upside for FQ4 revenues.
Movement: The stock didn’t put up the big gains seen at Alphabet. MSFT shares slipped 2.6% AH to $255, as Azure growth came in line with analyst estimates on a constant currency basis.
Musk trolls Bezos
Nearly a week after losing a $2.9B contract to SpaceX (SPACE) – that would build the next spacecraft to land astronauts on the moon – Blue Origin (BORGN) has filed a protest against NASA’s decision. The company had vigorously chased the contract, forming what it called a “national team” that included Lockheed Martin (NYSE:LMT) and Northrop Grumman (NYSE:NOC). The loss was also a big blow to Blue Origin founder Jeff Bezos, which recently announced his upcoming departure as Amazon (AMZN) CEO to focus on his space company and philanthropic ventures.
In a statement, Blue Origin called the decision “flawed” and said “NASA moved the goalposts at the last minute.” “Their decision eliminates opportunities for competition, significantly narrows the supply base, and not only delays, but also endangers America’s return to the Moon.” Musk responded by trolling Bezos on Twitter: “Can’t get it up (to orbit) lol.”
Flashback: SpaceX already beat Boeing (NYSE:BA) in the race to space under NASA’s Commercial Crew program. The project was structured as a multi-tiered competition to get private sector companies to produce the most cost effective, innovative and safe way to get to the International Space Station. While SpaceX has already sent three missions to the ISS via its Crew Dragon capsule – and has been the first private entity to score NASA authorization for a commercial spacecraft system – Boeing’s Starliner program has encountered issues during flight testing and manufacturing.
Go deeper: The Human Landing System (HLS) is an integral part of NASA’s Artemis program, a new effort to return humans to the moon and an eventual mission to Mars. Blue Origin submitted plans for its Integrated Lander Vehicle, but it’s far behind SpaceX even with regards to orbital transportation (flexibility, speed and culture are all said to have played a part in Musk’s lead). Losing the latest contract risks Bezos’ dreams of establishing Blue Origin as a desired partner for NASA or putting the company on the road to turning a profit. As for the HLS program, NASA requested $3.4B for the mission in fiscal year 2021, though Congress has so far only approved $850M.
What else is happening…
Amazon (AMZN) stock split rumors drive shares towards $3500.
Ford (F) attempts to make its own electric vehicle batteries.
3M (MMM), GE (GE) next to flag supply chain constraints.
CDC eases outdoor mask guidelines for vaccinated people.
AMC (AMC) pulls plan to request 500M-share issuance authorization.
Chesapeake Energy (CHK) CEO is leaving shale driller.
Avoiding Archegos meltdown, Deutsche Bank (DB) profits surge.
Saudi Aramco (ARMCO) could sell 1% stake to foreign company.
Pfizer’s (PFE) COVID-19 antiviral drug available by end of 2021.
There are new ways for Instagram creators to make money.
Tuesday’s Key Earnings
3M (NYSE:MMM) -2.6% as static guidance underwhelmed investors.
Alphabet (NASDAQ:GOOG) +4.2% AH as revenue vaulted 34%, operating income doubled.
(NASDAQ:AMD) +3.7% AH doubling data center sales.
General Electric (NYSE:GE) -0.6% on lower sales, restructuring charge, price pressures.
JetBlue (NASDAQ:JBLU) -2.2% guiding for break-even status in Q3.
Microsoft (NASDAQ:MSFT) -2.6% AH following in-line Azure growth.
Pinterest (NYSE:PINS) -10.6% AH warning on user growth amid reopenings.
Raytheon (NYSE:RTX) +2.2% citing defense backlog and travel recovery.
Starbucks (NASDAQ:SBUX) -1.7% AH amid worries about international growth.
UPS (NYSE:UPS) +10.4% soaring after an earnings blowout.
Visa (NYSE:V) +1.3% AH returning to growth for credit transactions.
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
2:00 PM FOMC Announcement
2:00 PM Chairman Press Conference
Good morning. Happy Tuesday.
The Asian/Pacific markets were split but mostly unchanged. India was strong; Japan and Malaysia were weak. Europe, Africa and the Middle East are split a little changed. Denmark and Turkey are up; The UAE, Finland and Switzerland are down. Futures in the States point towards a slight up open for the cash market.
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The dollar is up. Oil and copper are up. Gold and silver are up. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
Big Tech rolls in
The next round of Big Tech earnings is coinciding with a milestone for the Nasdaq Composite, which has returned to record levels for the first record since February. Reopening plays saw tech stocks lag behind other sectors this year, like financials, industrials and energy, though growth names could be in for a bigger comeback as the market heads higher. “Strong breadth measures suggest stocks still may have more upside,” said Jeff Buchbinder, equity strategist at LPL Financial. “While valuations are elevated, they still appear reasonable when factoring in interest rates and inflation.”
Overnight, Dow futures held steady, while the Nasdaq and S&P 500 inched up 0.2% and 0.1%, respectively. Tesla (TSLA) reported a record quarterly profit after Monday’s closing bell (see below), while Microsoft (MSFT) and Alphabet (GOOG, GOOGL) will release their Q1 results today. Apple (AAPL) and Facebook (FB) are scheduled to report tomorrow, followed by Amazon (AMZN) on Thursday, and analysts are already weighing in on the action and what to look for in the days ahead.
Technically speaking: “We did see last week the loss of short-term momentum broadly behind the likes of these mega-cap tech stocks. And I think that that tells us we could see a pullback to their breakout points, that would apply to both Alphabet and also Microsoft, both of which had nice breakouts,” wrote Katie Stockton, managing director of Fairlead Strategies. “These breakouts do have bullish intermediate-term implications but in the short term, there’s about 5% to maybe 8% room to 50-day moving averages so that to me is a little bit uncomfortable.”
Watch guidance: “I am still heavily invested in the names like Facebook, like the Apples and all the names that I have been in. However, I am cautious and have trimmed some just because of the substantial amount of gains that I’ve had over time,” added Kourtney Gibson, president of Loop Capital. “It’s less about earnings right now in my opinion and what happened in the first quarter and more about the guidance, whether formal or informal, that we get out of these companies to help us as we look through to the third and fourth quarter of the year.”
No quick judgments: “Google has had a pretty nice move. It’s up 30% this year. It’s really been a fantastic performer. I think there’s more to go but it’s the type of name that if it doesn’t raise guidance, perhaps it’ll pause,” said Karen Firestone, CEO of Aureus Asset Management. “Just because the stock goes down 1% or 2% after they print the quarter doesn’t mean you give up. It just could be that we’ve anticipated a lot of good news from Google over the past few weeks, and that, you know, maybe the investors have to absorb the new numbers that come out and then it can start to move again.”
Major privacy change
Fresh updates are coming to iPhones worldwide as Apple (NASDAQ:AAPL) began rolling out iOS 14.5, its new operating software that includes loads of new features. The one that’s grabbing headlines is Apple’s new privacy change, called App Tracking Transparency, which centers around access to unique iPhone IDs. Users will be asked by each app if they are okay with being tracked across other apps and websites, a move that could bring seismic changes to the nearly $100B mobile advertising market.
“Apps can prompt users for permission, and in Settings, users will be able to see which apps have requested permission to track so they can make changes to their choice at any time,” Apple wrote in a press release.
Thought bubble: Apple has been positioning itself as a protector of digital privacy, hoping to draw users by marketing itself as a privacy-focused company. But many have been angered by the move, like Facebook (NASDAQ:FB) and Google (GOOG, GOOGL), whose business models greatly depend on monetizing eyeballs on every possible platform. Apple has been sparring with the companies over data-collection practices, both privately and publicly, with the latter arguing that it will undermine connectivity and small business, as well as free services supported by targeted advertising. Apple may also have to justify the billions of dollars a year it receives for making Google the default search engine on Safari, which likely uses the same data-gathering techniques that it has criticized.
Outlook: It’s not clear what impacts the new changes will have, though many companies that rely on online advertising have said it will reduce the effectiveness and profitability of targeted ads. Others, like analysts at MKM Partners, expect a “fairly fleeting and minimal fundamental impact on the ecosystem.” As for Apple, the company feels that opt-in rates are likely to hinge on how companies make their case for tracking users (a better ad experience?), as well as the language used in the space Apple reserves for developers before showing the prompt.
There was a lot to unpack following Tesla’s Q1 results, though it was an all-around record quarter for the EV maker. The company reported record net income of $438M, as well as earnings of $0.93 per share (vs. $0.77 consensus) on $10.39B in revenue (vs. $10.29B consensus). The numbers were buoyed by sales of Bitcoin (BTC-USD) and regulatory credits, as well as rising margins and decreasing costs, but the stock fell as much as 3% AH as investors digested some forecasts.
What happened? Besides the usual earnings day volatility, Elon Musk and CFO Zachary Kirkhorn both said supply chain issues will likely to remain a challenge for Tesla this year, though it had weathered past industry chip shortages in part by “pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.” The company also said it produced none of its higher-end Model X SUVs and Model S sedans for the period ending March, and deliveries of the vehicles will only start in Q3 of 2020 and May 2021, respectively. Scaling up production at its Shanghai factory was also a problem because it couldn’t get “critical engineers” due to pandemic restrictions, but progress is being made there, as well as Gigafactories in Berlin and Austin.
Cameras, not radar… “Our AI-based software architecture has been increasingly reliant on cameras, to the point where radar is becoming unnecessary earlier than expected,” added Musk. “As a result, our FSD [Full Self-Driving] team is fully focused on evolving to a vision-based autonomous system and we are nearly ready to switch the US market to Tesla Vision.”
Crypto biz: Tesla execs noted that the company trimmed 10% of its Bitcoin position by the end of the quarter after investing $1.5B in the crypto (profit was about $101M). It is still optimistic about the space and plans to be a long-term investor in Bitcoin, but an ensuing battle took place on Twitter. Dave Portnoy lambasted Musk for what he saw as a pump and dump scheme, saying he “didn’t want to be last one #HODLing the bag.” Musk then fired back, telling Portnoy he didn’t sell any of his own Bitcoin, and that Tesla only unloaded a small portion “to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet.”
You’re trippin’ bro
New York-based MindMed will begin trading on the Nasdaq today – under ticker symbol “MNMD” – becoming the second psychedelic company to ever go public on a major U.S. exchange. Shroom drug developer COMPASS Pathways (NASDAQ:CMPS) debuted only six months ago, while another “drug growth platform,” called ATAI Life Sciences (ATAI), filed to go public last week. “I think that the psychedelics industry could be much bigger than the cannabis industry because it’s going to attract institutional capital and already is starting to,” MindMed co-founder JR Rahn declared. “It’s also going to be a more concentrated space because the barriers to entry are much higher.”
Backdrop: MindMed (OTCQB:MMEDF) went public last year on Toronto’s NEO Exchange, after failing to secure a second round of VC funding. “VCs had blinders on when they saw those three letters: LSD,” Rahn continued. “We got laughed out of most rooms… Where we found patient capital was up in Toronto.” The move to the Nasdaq will allow institutional investors to take larger positions in the company, though it will hang on to its NEO listing.
While MindMed believes its products should be taken under medical supervision, it’s unclear if FDA approval would accept tele-tripping instead of an in-person session. “Therapists are going to be a key component of making this whole new approach work,” outlined Rahn, adding that the “objective is to treat mental health.” Besides winning backing from the FDA, the company must also be mindful of the DEA, with the active ingredients for its treatments still being considered Schedule 1 drugs.
Go deeper: Comparing psychedelics to the weed industry, the legalization process could take place in stages: decriminalization, medical, and then recreational. In fact, many drug-related initiatives were decided across the nation in 2020, with Oregon becoming the first to decriminalize possession of hard drugs and D.C. voters approving a measure that would effectively decriminalize “magic mushrooms.” Similar sentiment could be a boon for companies investigating the potential use of psychedelic medicines like Aion Therapeutic (OTCPK:ANTCF), Better Plant Sciences (OTCQB:VEGGF), Champignon Brands (OTCPK:SHRMF), Codebase Ventures (OTCQB:BKLLF), Field Trip Health (OTCQX:FTRPF), Graph Blockchain (OTCPK:REGRF), Lobe Sciences (OTCPK:GTSIF), HAVN Life Sciences (OTCPK:HAVLF), Hollister Biosciences (OTCPK:HSTRF), Mind Medicine (OTCQB:MMEDF), Thoughtful Brands (OTCQB:PEMTF), Mydecine Innovations Group (OTCPK:MYCOF), New Wave Holdings (OTCPK:TRMNF), Numinus Wellness (OTCPK:LKYSF), Nutritional High International (OTCPK:SPLIF), Red Light Holland (OTCPK:TRUFF), Revive Therapeutics (OTCPK:RVVTF) and Seelos Therapeutics (NASDAQ:SEEL).
What else is happening…
Streamers continue gaining prestige ground with Oscar wins.
Amazon (NASDAQ:AMZN) stock split speculation sends shares higher.
Lyft (NASDAQ:LYFT) sells autonomous-driving unit to Toyota (NYSE:TM) subsidiary.
Supreme Court case could expand gun rights in New York.
BP (BP) plans to resume share buybacks after robust Q1 results.
Archegos fallout… UBS (NYSE:UBS) loses $774M on sour trades.
Brighter outlook at HSBC (NYSE:HSBC) amid surging profits.
Gilead Sciences (NASDAQ:GILD) to expand availability of remdesivir in India.
GameStop (NYSE:GME) jumps after raising $551M in stock sales.
J.P. Morgan finds valuation picks as mortgage REITs re-approach normal.
Today’s Economic Calendar
FOMC meeting begins
8:55 Redbook Chain Store Sales
9:00 S&P Corelogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
11:30 Results of $28B, 2-Year FRN Auction
1:00 PM Results of $62B, 7-Year Note Auction
1:00 PM Money Supply
Good morning. Happy Monday. Hope you had a good weekend.
The Asian/Pacific markets were mixed. South Korea, India, New Zealand, Taiwan and Malaysia did well; China, Hong Kong and Indonesia were weak. Europe, Africa and the Middle East currently lean to the upside. Turkey, the UAE, Greece, Finland, Hungary, Spain, Austria and Saudi Arabia are leading. Futures in the States point towards a flat open for the cash market.
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The dollar is up a small amount. Oil is down; copper is up. Gold and silver are down. Bonds are down. Bitcoin is up.
Stories/News from Seeking Alpha…
Earnings season will kick into high gear this afternoon as Tesla (NASDAQ:TSLA) reports Q1 results. The EV automaker has already seen record sales in the first quarter, delivering nearly 185,000 vehicles, but it will need to convince investors that it can hold on to its lead in an increasingly crowded playing field. The stock is flat YTD, after jumping over 700% in 2020, and shares have a long history of volatile moves on earnings day.
By the numbers: Wall Street expects impressive growth for non-GAAP earnings per share, which could soar 208% Y/Y to $0.77, and revenue forecasts are optimistic, with consensus estimates standing at $10.3B, or a Y/Y increase of 72%. Gross margins are also on watch. Model refreshes and stalling production of the higher-priced Model S and X during the quarter may see margins slip further, after falling to 24.1% in Q4, from 27.7% in the prior period.
Headwinds? Recent negative headlines from China (malfunction protests and a military complex ban), as well as a crash in Texas (that seemed erroneously connected to Autopilot), are likely to come up in the conference call. There’s also risk that as traditional automakers drive on to the EV scene, they’ll need to buy fewer regulatory credits from Tesla to keep in line with emissions rules. While the credits are a small source of revenue, they can help bolster profits since there are no costs associated with them.
Outlook: While Tesla has not yet provided a specific vehicle delivery estimate for 2021, it could be a lofty number. Tesla’s vehicle deliveries already grew 36% to nearly half a million in 2020, and Technoking Elon Musk has commented that the company could see an annual growth of 50% or more this year. Investors are also hoping for comments surrounding Tesla’s new plants in Germany and Austin, Texas, and other growth forecasts, as Tesla continues to roll out its international expansion.
U.S. stock futures were mixed, but little changed, overnight, with the Dow up 0.1%, and the S&P 500 and Nasdaq off 0.1% and 0.3%, respectively. The moves come ahead of the busiest week of earnings season and follow the first weekly loss in five on Wall Street. Analysts say high valuations have kept traders’ enthusiasm in check, but indexes are within 1% of their all-time highs.
About a third of the S&P 500 are set to update investors over the next five sessions. Tesla (TSLA) will kick off the action this afternoon, while Big Tech will make headlines the rest of the week, with results from Amazon (AMZN), Alphabet (GOOG, GOOGL), Apple (AAPL) and Microsoft (MSFT). Investors will also be gauging economic reopening plays, such as Boeing (BA), Caterpillar (CAT) and Ford (F), which are expected to detail price pressures from rising materials and transportation costs.
Statistics: Corporations have been putting up some nice numbers thus far. About a quarter of S&P 500 companies have already published Q1 results, with 84% reporting a positive per share earnings surprise and 77% topping revenue estimates. If 84% is the final percentage, it will tie the mark for the highest percentage of S&P 500 companies reporting an EPS beat since FactSet began tracking the data in 2008.
That’s not all: President Biden is due to release his “American Families Plan” this week that would double the capital gains tax for the ultra-wealthy. The Fed also meets Tuesday and Wednesday, and is expected to defend its policy of letting inflation run hot. At a press conference following the announcement, Chair Jerome Powell is likely to assure markets that the pick-up in prices is only temporary, before the March personal consumption expenditures index, one measure of inflation, comes out Friday.
Surge in India
India continues to report a record number of fresh COVID-19 cases and deaths daily as the country struggles to contain a devastating coronavirus outbreak. On Monday, the government reported almost 353,000 new daily infections, the fifth consecutive day the country set a world record. The nation also saw over 2,800 COVID-related fatalities yesterday, bringing the total death toll to 195,000.
“Just as India sent assistance to the United States as our hospitals were strained early in the pandemic, we are determined to help India in its time of need,” tweeted President Biden. The U.S. is considering sending some doses of AstraZeneca’s (AZN) vaccine, which is not yet approved in the U.S., as well as funding a “substantial expansion” in manufacturing capability to enable Indian vaccine maker Biological E produce at least 1B vaccine doses by the end of 2022. Raw materials will also be sent for therapeutics, rapid diagnostic test kits, ventilators and protective equipment.
Thought bubble: While the Indian government is moving to vaccinate people as quickly as possible, the size of the population makes the task daunting. India is in talks with Pfizer (PFE) to deploy its vaccines, while Johnson & Johnson’s (JNJ) single-shot COVID-19 vaccine is expected to be imported by July 2021. A vaccine from Ocugen (OCGN) partner Bharat Biotech, called Covaxin, has meanwhile shown efficacy against new variant behind India’s second wave.
Other medical aid: European Commission President Ursula von der Leyen tweeted Sunday that the bloc was “pooling resources” to respond rapidly to an Indian request for help, Singapore sent oxygen containers to New Delhi on Saturday, while Germany airlifted 23 mobile oxygen generation plants to the country. India is also working with private companies to ship 80 metric tons of liquid oxygen from Saudi Arabia, while China, Russia and Pakistan have also offered to assistance.
The CDC is advising pregnant women to get COVID-19 vaccines after preliminary data from the biggest study on the demographic showed that Pfizer (NYSE:PFE) and Moderna’s (NASDAQ:MRNA) jabs were safe for expectant mothers and their babies. Pregnant women are more likely to be hospitalized and run a higher risk of death when infected with COVID-19, making vaccination especially important among the population.
“No safety concerns were observed for people vaccinated in the third trimester or safety concerns for their babies,” CDC Director Dr. Rochelle Walensky declared. “As such, CDC recommends pregnant people receive COVID-19 vaccines.”
By the numbers: The peer-reviewed study published by The New England Journal of Medicine showed no “obvious safety signals” among any of the 35,691 women who participated, with ages ranging from 16 to 54 years old. Injection-site pain was reported more frequently among pregnant persons than among non-pregnant women, whereas headache, myalgia, chills and fever were reported less frequently. Of the 827 participants who completed their pregnancy, rates of miscarriage were the same as rates observed before the pandemic. The data covered the first 11 weeks of the U.S. vaccine rollout, from Dec. 14, 2020 to Feb. 28, 2021.
Conclusions: “Preliminary findings did not show obvious safety signals among pregnant persons who received mRNA COVID-19 vaccines,” according to the study. “However, more longitudinal follow-up, including follow-up of large numbers of women vaccinated earlier in pregnancy, is necessary to inform maternal, pregnancy, and infant outcomes.”
New investing frontier
The team aboard the International Space Station grew to 11 on Saturday following the arrival of SpaceX’s (SPACE) third crewed capsule in less than a year (Demo-2, Crew-1, Crew-2). It was also the first group to be propelled into orbit via a rocket booster recycled from a previous spaceflight. Reused boosters are at the heart of SpaceX’s rocket strategy to help make spaceflight more economical.
Close call: While en route to the ISS, the SpaceX capsule, called Endeavour, had a near miss with an unknown object. Astronauts on board were told to “buckle up and prepare for a crash as there was no time to perform an avoidance maneuver.” The SpaceX team also had the crew don their pressure suits “out of an abundance of caution,” but they thankfully arrived at the ISS unharmed.
After the space shuttle program was retired in 2011, NASA turned to private companies for space station deliveries. SpaceX began supply runs in 2012, before launching astronauts last year and ending NASA’s reliance on Russia. NASA also hired Boeing (NYSE:BA) for a taxi service under its Commercial Crew program, but the company’s Starliner capsule isn’t expected to fly astronauts until next year. “While not done yet, [Commercial Crew] is poised to save the Agency approximately $20B-$30B, and provide two, independent crew transportation systems,” according to NASA commercial spaceflight director Phil McAlister.
Investing sphere: “With another $4.5B invested into 77 space companies in Q1, there has now been $186.7B of equity investment into 1,480 unique companies in the space economy over the past 10 years,” Space Capital managing partner Chad Anderson wrote in the latest Space Investment Quarterly. “Coming off a massive year of investment in the space economy, the trend towards larger late-stage deals continued in Q1, with the top 10 rounds accounting for 77% of total investment in the quarter. At the early-stage, we’re seeing larger deal sizes at higher valuations and looser terms as VCs push to deploy the historical amounts of capital they raised in 2020.”
What else is happening…
Advertising omen? Disney (DIS) sells out Oscars ads at steady rate.
TV cord-cutting could accelerate over the next two years.
States restart Johnson & Johnson (NYSE:JNJ) COVID-19 vaccinations.
What might be behind blood clot risk with some COVID jabs?
Global auto chip shortage sends major automakers scrambling.
Biden backs California’s ability to set own auto emissions standards.
Activist hedge fund excoriates Exxon (NYSE:XOM) over emissions risk.
Demand is increasing for commercial real estate services – William Blair.