Has the economy finally turned it around? February 22, 2021 View Online | Sign Up
TOGETHER WITH
Good morning.For those of you passionate about the “Is NYC dead?” argument, we’ve got some new data from the NY Post: About 105,000 people/day are walking through Times Square to do…well, that’s actually a great question.
105k is a 65% decline from pre-Covid days, but far more than the 35,000 daily Time Square visitors at the beginning of the pandemic.
MARKETS YTD PERFORMANCE NASDAQ
13,874.46
+ 7.65%
S&P
3,906.71
+ 4.01%
DOW
31,494.32
+ 2.90%
GOLD
1,784.60
– 6.15%
10-YR
1.361%
+ 44.20 bps
OIL
59.62
+ 23.13%
*As of market close.Here’s what these numbers mean .
Covid: More great news on the vaccine front.New data from Israel shows that the Pfizer-BioNTech vaccine effectively prevents the transmission of Covid-19.Although it’s not yet peer-reviewed, the study is the first sign that vaccines can stop asymptomatic carriers from passing on the coronavirus.Markets: The S&P hopes to hop back on the winning train after posting its first weekly loss in three.Financials, industrials, and airlines have been standouts even as the broader market couldn’t find its legs.
ECONOMY Has the Economy Finally Turned It Around? Francis Scialabba
If we had a dollar for every economic prediction that didn’t pan out last year, we could single-handedly fund President Biden’s stimulus plan.
Still, the latest wave of economic data has some experts hoping that the US is not only on the rebound, but ahead of schedule.
The growing signs for optimism When investors are nervous about what’s ahead, they typically buy US Treasury bonds, which sends bond prices higher and yields down.But last week, yields on the 10-year note climbed to a one-year high, a sign that investors are bullish about a quicker rebound.
So are CEOs, whose confidence is at a 17-year high.
Execs are predicting fewer layoffs and a positive wage outlook, according to a recent Conference Board survey.
On the consumer front…
Retail sales jumped 5.3% in January, aided by the latest round of stimulus checks.Households are sitting on ~$1.5 trillion in extra savings.Employment in several blue-collar sectors—residential construction, delivery, and warehousing— surpassed pre-pandemic levels.Retail and restaurant jobs are also recovering.
Zoom out: Goldman Sachs recently upped its 2021 GDP forecast to 7%, but economists are still concerned about the K-shaped recovery.10 million fewer people are working now compared to last February, continuing unemployment claims are still elevated at 18.3 million, and consumer sentiment for those earning What does this mean for more stimulus? The US government has spent $3.7 trillion since March, and Biden wants another $1.9 trillion.Given indicators of economic improvement, some experts are divided on whether more spending will trigger inflation or get the US out of a 20-year “low-growth rut.”
Treasury Sec.
Janet Yellen thinks we’re still in “a deep hole.” And when he testifies to the Senate and House finance committees this week, Fed Chair Jerome Powell is expected to continue pressing for more action.
ENERGY Texans Looking at Their Electricity Bills Giphy
Most Texans have their lights back on following a harrowing week in which frigid temperatures + energy grid failures contributed to prolonged blackouts.
But now, some are facing a whole new disaster : astronomical electricity bills.A few examples:
An HR director was charged $2,739 this month after paying $130 in January.A Dallas resident is facing a $7,000 bill .A retired Army vet is stuck with a $16,752 electric bill , 70x what he typically pays for utilities.How could that happen? Many Texans facing exorbitant charges were customers of power supplier Griddy, whose prices fluctuate with the wholesale energy market.When energy prices skyrocketed last weekend, Griddy knew its customers were in for a painful surprise and even encouraged them to switch providers if they could.
Looking ahead…Texas Gov.Greg Abbott held an emergency meeting on Saturday to see what lawmakers could do to provide relief.
And Houston Mayor Sylvester Turner said the state of Texas should “bear the responsibility” of paying the egregiously high bills.
GRAB BAG Key Performance Indicators Zhang Yun/China News Service via Getty Images
The best news bites you missed this weekend in the form of one stat, one quote, and one read.
Stat: The Chinese box office generated $1.2 billion in ticket sales over the recent Lunar New Year holiday, a record haul and equivalent to about 10% of the total global box office last year.Detective Chinatown 3 had the biggest opening ever for a film in a single market, topping even Avengers: Endgame .
Quote: “BTC & ETH do seem high lol”—Elon Musk, despite being a crypto bull, tweeted that surging bitcoin and ethereum prices might be overdoing it a little.For once, though, his tweets went ignored: Both cryptocurrencies hit record highs this weekend.
Read: A financial crisis is heading for the legendary soccer club, Barcelona.( New York Times )
SPONSORED BY CHOBANI We Time Traveled to Tell Our Great Great Great Grandpa About This
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Began our Coffee Creamer flavor brainstorm Built a time machine to travel to the Yukon Territory in 1898 and tell Great Great Great Grandpa Harold that there’s an easier way to make his fortune We couldn’t sit around making our fortune by dreaming up Coffee Creamer flavors while Harold broke his back panning for gold.
No, we drove that time machine straight to Harold and told him, “Hop in, Gramps.We got some Coffee Creamer flavors to dream up.”
Now we’re all sittin’ around the table at Brew HQ, dreaming up a flavor for a chance to win this contest and live on shelves IRL .
Think you can beat us? Submit your dream Chobani® Coffee Creamer flavor here .
FINTECH Too Late to Declare 2021 the Year of Fintech? Francis Scialabba
Nothing against the ox, but two of Silicon Valley’s mega-startups are getting ready for their Wall Street cotillion, and new reports say they’re already commanding nine-figure valuations.
First up, Coinbase Ahead of its planned direct listing, investors are valuing Coinbase at $100+ billion, which would make it the biggest US tech listing since Facebook, per Axios.As the first US-based crypto exchange to go public, it’ll also confer major legitimacy to digital currencies.
Coinbase has licenses to operate in over 40 states and 100+ countries.And in the first nine months of 2020, it did $141 million in profit…
…and that was before bitcoin started shooting up like bamboo.
The crypto has risen ~96% YTD and is pushing $58k.
Next is Stripe Thanks to the pandemic-fueled e-commerce boom, Stripe processed an estimated 50% more payments last year.Investors are valuing the company at $115 billion in the secondary market, more than 3x its valuation from last April.
This weekend, Stripe announced that former Bank of England Gov.Mark Carney is joining the board.
Zoom out: With Ant Group’s IPO blocked by Chinese regulators, American fintechs may steal the show.
SoFi is going public via SPAC, and while Robinhood is…working through some things…it hasn’t ruled out a 2021 IPO.
CALENDAR The Week Ahead Francis Scialabba
Stimulus: The House could vote on Biden’s $1.9 trillion stimulus package this week , per House Speaker Nancy Pelosi.As a reminder, the bill includes direct payments of up to $1,400 and $400/week in extra unemployment benefits.
Powell testimony: Fed Chair Jerome Powell will try for a Roaring Kitty-like performance when he testifies on Capitol Hill on Tuesday and Wednesday about the state of the economy.
Earnings: Should be a fun week, with lots of big retail names (Home Depot, Etsy, Lowe’s, TJX, Best Buy) and plenty of others (Nvidia, Square, Salesforce).On Thursday, Airbnb and DoorDash will deliver their first earnings reports since going public.
Everything else:
The Conservative Political Action Conference (CPAC) starts Wednesday.Former President Trump is expected to deliver a speech on Sunday.
Warren Buffett will release his famous annual shareholder letter on Saturday.Chag sameach to our Jewish readers celebrating Purim Thursday night.Let us know if you’ve got any fun costumes planned.WHAT ELSE IS BREWING A United Airlines Boeing 777 safely returned to Denver after suffering an engine failure post-takeoff, raining debris on a town below.United is taking 24 planes out of service temporarily, and Boeing has called for all 777s with a specific Pratt & Whitney engine model to be grounded until the FAA inspects them.
Activist investors have acquired a 9.5% stake in Kohl’s and are attempting to take control of the retailer’s board, according to the WSJ.Merrick Garland’s confirmation hearing for US Attorney General is today.The UK sped up its timeline for administering vaccines, pledging that every adult would get a first dose by July 31.
Naomi Osaka and Novak Djokovic took home trophies in the Australian Open.BREW’S BETS You don’t need diamond hands to take your investments to the moon.The real money gets made outside of the stock market in exclusive asset classes like blue-chip art.Masterworks lets you invest in big-name artists—like Banksy—at a fraction of the price.Skip their 19,500-person waitlist here .*
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Work playlist ideas: Listen to a) radio stations all around the world or b) recreate your favorite bar’s atmosphere .
Dive back into the week:
Shallow dive: Up , reimagined Medium dive: Fascinating visual showing building ages in the Netherlands Deep dive: The Brew’s guide to all the confusing acronyms in this newsletter Cannonball: Prof.
Scott Galloway on the algebra of wealth *This is sponsored advertising content
GAMES Nutritional Facts Which famous food product is made from the following ingredients:
Unbleached enriched flour, sugar, palm and/or canola oil, cocoa, high fructose corn syrup, leavening, salt, soy lecithin, chocolate, artificial flavor
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Enter Contest by: 2/28/21.To enter and for Official Rules, visit http://www.chobanicoffeecreamer.com/ .
Written by Alex Hickey and Neal Freyman
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