Kathy Sager Sagerfinancialgroup.Com February 5Th-12Th
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Hope you had a great Family Day long weekend! US and Canadian equities were higher this past week, with the Dow, S&P, and Nasdaq all ending at fresh all-time highs. Very inspiring milestone for women in business, as 31-year-old Bumble CEO Whitney Wolfe Herd, becomes the youngest female founder to take a U.S. company public. Started in 2014, Bumble is a dating app where women must initiate the first conversation for matches to communicate. Shares soared 63.5% in their impressive initial public offering Thursday on the Nasdaq. Enjoy our weekly recap and notes for the week ahead. Stay healthy! Regards – Sager Financial Group Kathy Sager Outperforming Sectors: Senior Vice President Investment Advisor • Energy +4.33%, Tech +2.30%, Financials +2.00%, Industrials +1.42%, T: 604.643.7504 Healthcare +1.36%, Communication Svcs. +1.33% E:[email protected] Underperforming Sectors: • sagerfinancialgroup.com Utilities (1.79%), Consumer Disc. (1.26%), Consumer Spls. (0.10%), REITs +0.99%, Materials +1.08% February 5th-12th - Markets Other Asset Classes: S&P/TSX Composite Up +1.79% to • Treasuries were mostly weaker, with a Friday move at the long end of the 18,335 curve reversing some flattening from earlier in the week (the 30Y yield S&P 500 Up +1.23% to 3,934.83 finished just above 2%). The dollar was weaker on the major crosses. Weekly Highlights: Dow-DJIA Up +1.0% to 31,458 • In the primary monetary event of the week, Fed Chair Powell delivered Nasdaq Composite Up +1.73% to remarks to the Economic Club of New York on Wednesday that hewed close 14,095 to his prior dovish messaging. MSCI Emerging Markets Up • He noted that sustained labor-market strength is still a long way away and it +2.40% to 1,429 is important to maintain a patient and accommodative monetary policy stance. He added that the economic reopening could generate strong FTSE 100 Up +1.55% to 6,589 spending growth and put upward pressure on prices, but this may neither be large nor sustained. Russell 2000 Up +2.51% to 2,289 • Coronavirus statistics continued to improve this week, with the seven- Hang Seng Up +3.02% to 30,173 day average for new cases hitting its lowest level since early November (it has been moving steadily down since the 11-Jan peak). President Biden on Shanghai Up +3.92% to 3,655 Thursday said the US has struck deals for 200M more doses of the Pfizer and Moderna vaccines, raising the total to 600M doses. Dr. Anthony Fauci Oil (WTI) Up +4.6% to $59.38/bbl said Thursday he expects that Americans from all age and health categories (highest since Jan 2020) may be able to receive a vaccine by April. Gold (Spot USD/oz) Up +0.56% to • There was little movement in the Biden stimulus push, with elements of $1,823 his proposed ~$1.9T package being debated and passed out of individual House committees. The House Budget Committee may finalize a bill draft Copper (USD/lb) Up +4.46% to next week ahead of a vote sometime before the end of the month. $3.79 2 / 4 What happened Last Week? Source: EDGAR, CNBC, Bloomberg, Rosenberg Research • Shares of Disney (DIS) rose 1.6% AH on Thursday after its fiscal first-quarter earnings easily topped profit expectations, on revenues that didn't decline as much as feared. The results are the first since a divisional reorganization, which makes clear that softer declines in media and entertainment helped mitigate a huge drop in its parks and products business. Disney's streaming service, Disney+, also continues to be a big hit. It now has 94.9M paid subscribers, topping an expected 90.7M, with 8M new viewers added in December alone. Putting it in perspective: The figure means Disney has already crossed its original 90M subscriber goal for the platform, which is a number it originally expected to take four years to reach. The Mouse House has since revised that four-year plan with a new target of reaching between 230M-260M subscribers by 2024. The news was still not enough to offset the hardship the company is experiencing due to the pandemic, with COVID- related costs shaving $2.6B from parks' operating income in the latest quarter. Walt Disney World in Florida and Shanghai Disney Resort were open for the entire period, though operations at Disneyland were suspended despite declining coronavirus cases in California. Disney traditionally makes a lot of money from its theme parks and movies, and that, in effect, is subsidizing its big bet on streaming. Thought bubble: While analysts have said Disney trades at a massive 74x earnings - a valuation similar to cloud computing giants and EV makers - investors have bought into Disney's streaming push. Including ESPN+ and Hulu, the Mouse House has nearly 150M subscribers, and it's only been a little over a year since Disney+ launched in November 2019. That level of unprecedented growth has excited shareholders, even though the business is loss- making now and will likely be for years to come. • Record Trading Volumes - While stock index futures dipped slightly overnight, down 0.2% at the time of writing, the major averages are still on track to post a positive week at record levels. A strong rally has taken hold of the market since the beginning of February, before traders take off for Presidents' Day on Monday. The parabolic surge and rapid collapse of GameStop (GME) and other WSB/Reddit shares have also done little to dampen enthusiasm for equity exposure. Primary culprit in the overall increase in volumes? Retail. Average daily volumes of the largest e-brokers are way up, as well as options trading that have been prevalent among the retail crowd. Record volumes are also being reported on the Trade Reporting Facility, a "tape" which reports trades not done on the exchanges. • Bitcoin Buzz - Bigger financial institutions are embracing Bitcoin (BTC-USD), paving the way for large-scale adoption. The crypto jumped as high as 26.4% to $47,853 on Fridays close, notching a new record, after Mastercard (MA) and Bank of New York Mellon Corp. (BNY) moved to make it easier for customers to use cryptocurrencies. Galaxy Digital chief Mike Novogratz said this development is huge, but the flow of good news for Bitcoin has been so great of late that it's going nearly unnoticed. Backdrop: On Tuesday, Tesla (TSLA) invested $1.5B in Bitcoin and announced it would begin accepting the crypto for payment "in the near future." There were also some earlier signals. Last week, Elon Musk said he thought Bitcoin "was on the verge of broad acceptance" and added the Bitcoin hashtag to his bio on Twitter. In January, Tesla further disclosed it might hold some of its cash reserves in "certain alternative reserve assets including digital assets, gold bullion [and] gold exchange-traded funds." 3 / 4 Twitter (TWTR) has additionally done some "upfront thinking" about how to deal Bitcoin, including if employees ask to be paid in the crypto and whether the firm needs to have the digital asset on its balance sheet. Twitter CEO Jack Dorsey, who is also the co-founder of Square (SQ), has been a long-time advocate of Bitcoin. • Nearly 6,000 employees at an Amazon warehouse just outside of Birmingham, Alabama, called BHM1, began a vote this week to unionize their facility, marking the first such significant effort by Amazon workers in the U.S. The retail giant has been fighting hard against the endeavor with anti-union posters, a dedicated website launch and holding mandatory meetings during work hours, but a group of more than 70 investors has written a letter asking the company to stop interfering with the vote and remain neutral. They have cited worker rights to unionize, FT reports, as well as possible negative effects on Amazon's reputation among customers. • Manufacturing - Addressing the Chip Shortage - The global semiconductor shortage that has hit many U.S. industries, especially the auto sector, has got the attention of the Biden administration. An executive order will be signed in the coming weeks to authorize supply chain reviews for critical goods like silicon chips. The chip industry has said the semiconductor crunch points to the need for more investment in U.S. manufacturing and research and is hoping for government incentives to pump billions of dollars into that effort. On Thursday, a group including Intel (INTC), Qualcomm (QCOM) and Advanced Micro Devices (AMD) even sent a letter to President Biden. They urged him to provide "substantial funding for incentives for semiconductor manufacturing" as part of his economic recovery and infrastructure plans, citing the decline of the U.S. share of global chip- making in recent decades. Biden urged Congress to move quickly on a large infrastructure improvement plan, declaring that China is poised to "eat our lunch" otherwise. "They're investing billions of dollars dealing with a whole range of issues that relate to transportation, the environment and a whole range of other things. We just have to step up." • Bumble rose as much as 8.8% on Friday, extending gains after its massive post-IPO rally. The dating app made its trading debut Thursday afternoon and quickly surged as investors rushed to the offering. Bumble stock gained as much as 85% at intraday highs and closed roughly 64% above the offering price of $43 a share. The company raised $2.2 billion on Wednesday with its 50-million-share offering. Bumble's offering price was upsized twice since filing for its IPO in January: once from its initial range of $28 to $30 a share, and again to $37 to $39 a share.