Aug. 8 Markets Report: The Greens Are Looking Grassier
The Inflation Reduction Act gets pushed through the U.S. Senate, more grain leaves Ukraine, and Amazon wants to map your home.
Updated Aug 9, 2022
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- The Bureau of Labor Statistics reported Friday that the unemployment rate dropped to 3.5% after nonfarm payrolls rose by 528,000 in the last month. Meanwhile, wages are up as average hourly earnings spiked by half a percent last month, making them 5.2% higher than they were at the same time last year. The labor market is back, baby!
- Congressional Democrats pass the Inflation Reduction Act, a comprehensive legislative package that tackles climate change, taxes, and health care. If signed into law by ol' Uncle Joe, the bill will boost taxes on wealthy corporations, cut greenhouse gas emissions, extend Medicare subsidies for three years, and enable Medicare to negotiate drug prices.
- The New York Federal Reserve reported that credit card balances were 13% higher in Q2 than in the same period last year. While this could indicate economic growth, Fed analyst Joelle Scally stated that the increase in credit card swiping is primarily due to pandemic relief measures ending and consumer prices rising.
- According to a NY Fed survey, more consumers expect inflation and prices to be lower in the coming years than last month. The Fed's survey found that people are optimistic having become more confident that food and gas prices will go down over the next year.
- Interest Rates: 2.50%
- Unemployment Rate: 3.5%
- GDP YoY: 1.6%
- CPI YoY: 9.1%
- US3M: 2.5089%
- US2Y: 3.228%
- US10Y: 2.799%
- US30Y: 3.03%
Stock market performance
- Dow: 0.01%
- S&P: 0.64%
- Nasdaq: 2.33%
- Four ships carrying grain and sunflower oil left Ukrainian ports on Sunday as part of a deal brokered by Turkey and the UN to lift Russia's maritime blockade. The deal is set to last 120 days and can be renewed upon agreement by Russia and Ukraine.
- The Chinese military is conducting drills in Taiwanese seas and airspace following U.S. House Speaker Nancy Pelosi's visit to the Island. Singapore Prime Minister Lee Hsien Loong warned that U.S.-Chinese tensions are unlikely to ease and that the city-state should prepare for less peace and stability.
- Turkish president Tayyip Erdogan stated that five of the country's banks are adopting Russia's Mir payment system, according to a state-run Turkish news agency. This follows Ankara's refusal to be a party to sanctions against Russia, a significant exporter of crude oil and natural gas to Turkey.
- Infotech: 2.16%
- Telecom: 1.59%
- Consumer staples: -1.09%
S&P 500 winners & losers
- Ceridian HCM Holding: 17.02%
- Moderna: 15.68%
- Ball Corp.: -22.96%
- DXC Technology: -29.30%
Stocks & bonds
Stocks & bonds
- Berkshire Hathaway posted a $53 billion loss on investments while raking in $9.28 billion in profits, according to its Q2 report. Despite a net loss of $43.8 billion due to "significant disruptions of supply chains and higher costs," the Warren Buffet-owned conglomerate holds $105.4 billion in cash and has purchased $4.2 billion of its own stock in 2022 alone.
- Bed Bath & Beyond is enjoying a meme stock rally as the share price doubled over the past week. This comes after former Chewy CEO Ryan Cohen purchased a significant stake in the waning retail chain earlier this year, fetching him three seats on the company's board.
- Amazon is seemingly on an acquisition spree—the company agreed to acquire iRobot for $1.7 billion following its acquisition of One Medical just weeks earlier. iRobot is best known for its Roomba autonomous vacuum cleaner, but Amazon could leverage the household device to construct live maps of Roomba owners' homes.
- This week, Pfizer penned a deal to buy drugmaker Global Blood Therapeutics for $5.4 billion, or $68.50 per share. This is Pfizer's third acquisition this year, including Biohaven Pharmaceuticals for $11.6 billion and Arena Pharmaceuticals for $6.7 billion. It looks like 'jab-enomics' are paying off.
- Fannie Mae's monthly survey results indicate that consumer confidence in the housing market is dropping to new lows. Of those surveyed last month, 17% said it's a good time to buy a home compared to 20% in June. Also, 67% of the people surveyed said they expect mortgage rates to rise, while only 6% think they'll fall.
- A new Redfin analysis found that the fastest-cooling real estate markets are on the West Coast, with median sale prices in cities like San Jose, Sacramento, and Oakland in California dropping the most. The manifest destiny takes its final breaths.
- Australian crypto exchange Ebonex partnered with Mastercard to enable its users to spend BTC using a debit card. This marks Mastercard's second crypto-centric collaboration following its partnership with Binance to roll out pre-paid crypto cards in Argentina. Does anyone even HODL anymore?
- The U.S. Treasury sanctioned Tornado Cash because a North Korean hacking group called Lazarus allegedly used it to obfuscate stolen funds. The move effectively bans U.S. persons and companies from using the crypto laundering service, which U.S. Secretary of State Antony Blinken alleged was sponsored by North Korea in a now-deleted tweet. Wooops!
- Coinbase is facing two lawsuits and an SEC problem, putting the company under high scrutiny. One lawsuit claims Coinbase made deceptive claims about their business practices, while the other seeks compensation for losses resulting from Coinbase's violation of federal securities laws. Some folks forgot that 'buy low, sell high' also applies to crypto.
NFTs & metaverse
NFTs & metaverse
- The CryptoDickButts Series 3 NFT collection is off to a strong start as trading volume shot up 800% over the past 24 hours. The collection is based on the Dickbutt cartoon character—a popular internet meme created by K.C. Green—and contains 5,200 NFTs. I'm not even going to try explaining this one.
- Fractionalized NFTs are gaining steam. Several projects have been turning CryptoPunk NFTs into fractionalized blockchain tokens that investors can use to gain exposure to one of the most extensive art collections on the blockchain. Though platforms like Unic.ly, Unique.network, and Kucoin already offer fractionalized CryptoPunks tokens, it's unclear if they constitute unregistered securities.
- Two ships carrying corn and soybeans left Ukrainian ports on Monday morning, bringing the total number of grain ships that have left Ukraine since Russia invaded to ten. The agreement to lift Russia's maritime blockade has enabled Ukrainian exports to ease supply shortages and bring grain prices down.
- China imported 8.79 million barrels of crude oil per day in July, confirming that the country will continue to be its biggest buyer. Chinese crude oil imports are still 4% down from the same period last year after reaching four-year lows in June and July.
- Crude oil prices dipped last week after the number of operating U.S. oil rigs was cut in response to weak gasoline demand, stockpile growth, and a bill that would invest over $400 billion in green energy initiatives.
- A baseball card of a wee Mark Zuckerberg at nine years old will be up for auction through ComicConnect. The baseball card was created by a friend of the Meta founder and CEO three decades ago at Elmwood Day Camp in Westchester, NY. The buyer will receive the physical card and an NFT—the price range of this unusual collectible is still unclear.
- An infamous T206 Honus Wagner baseball card sold for a record breaking price of $7.25 million last week at Goldin Auctions. Known as the Mona Lisa of baseball cards, it's one of the rarest and most valuable collectibles out there. Magnifico!
- The founder and CEO of Softbank Group Masayoshi Son said a funding crunch means startups will endure a longer funding winter than expected. Son, whose company lost $23 billion last quarter, thinks the funding crunch is mainly due to 'unicorns' refusing to budge from high valuations. Sounds like they’ve got their horn too far up their ass.
- Lyft recently created Lyft Media, a new business that aims to raise ad revenue by putting commercials in your face while you use their app or ride in their vehicles. Their infamously unprofitable competitor Uber started dishing out ads in 2019 and says the revenue stream could rake in $1 billion by 2024.