Good Afternoon,
Hope you all had a great start of the week. Welcome to the new subscribers and I appreciate everyone who has supported & shared so far. Let’s get it!
Headlines
JP Morgan 💰 Bitcoin JP Morgan-Chase is working on an actively-managed Bitcoin fund to offer to its clients. After JPM’s CEO called bitcoin a fraud in 2017 and took it back in 2020, it seems the big bank is finally onboard with the idea that cryptocurrencies are here to stay, particularly Bitcoin. See report from (Coindesk). Will BTC march higher following the recent decline? Some are calling for the anticipated “100K” before 2021 comes to an end.
🧰 Durable goods just good enough? U.S markets were trading lower pre-market and Treasury rates were rallying before the economic reading of the day came weaker than expected, sending markets decidedly higher. Strangely enough, the report coming in slightly weak is helping ease inflation worries and suggests the lagging industrial spending from February is catching up. This comes on the back of the biggest cyclical restocking in at least the last decade as the economy reopens from the pandemic. Durable goods came in with a +0.5% vs +2.5% expected while Core goods came in line with expectations. Read details from (Reuters).
🛩 EU Summer Reopening The EU Commission is working to lift travel restrictions, allowing tourists from the United States to travel to the 27-nation bloc this summer. Read more here (NYT). The travel sector rallied on the news, particularly Airlines which have been beaten down by lack of international travel.
with no further due, the tale of the tape:
Tale of the tape
As of 4/26/21 close.
Markets
📈 US Indexes & the VIX S&P500 and Nasdaq rallied and set another intraday high. Both indexes closed slightly off all time highs. Technology and Energy sectors led the way. Tech led in anticipation of the packed earnings week where the biggest US tech companies will report earnings. Energy gained to pair some of the recent losses on the back of more positive reopening news and encouraging economic data. Volatility (VIX) was somewhat stable but is still trending downwards as weakness in the market is offset by the leading sectors. Can volatility continue its decline or will this week’s packed agenda shoot it over 20 again? Let’s see what happens!
Here’s a look on every sector in the S&P500 from SPDR.
Small Caps are Runnin’💨 S&P600 small caps index increased as much as +0.5% , continuing the momentum from last week. The Russell 2000 rallied +1.15% to close only 60 points off its all time highs of 2,360. As I wrote on the previous edition, the small caps have been on a tear since the start of the pandemic and seem to be finally breaking out of consolidation. Bloomberg here with more (BBG).
Earnings
⚡️Tesla Smashed earnings expectations on both top/bottom lines. Tesla hit a new delivery record for any quarter but failed to provide delivery guidance for Q2 2021. Shares are declining 1-2% in afterhours trading. Most notably, Tesla sold its Bitcoin in Q1 2021 for a whooping $101Mln profit. Did Elon just paper-hand BTC? Come on man!
⚙️ NXP Semiconductors Q1 beat expectations on both EPS and Revenue. NXP’s biggest segments, Automotive and Industrial chips grew 24% and 52% YoY respectively. CEO Kurt Sievers sees robust growth to continue for 2021. NXP’s gave Q2 guidance above expectation of 2.57Bln. More details (Here).
Full U.S Earnings Calendar (Here)
Corporate News
🛻 Lucid & Apple Rumor Speculation of Lucid Motors working on a partnership with Apple on electric vehicles rattled the market this morning, $CCIV gained 16% for the day. More details (Here). Earlier in the year, Lucid agreed to be acquired by blank-check company Churchill Capital IV. The deal was reportedly worth up to 15B. The company’s 1st EV called Lucid Air will hit the markets around 2nd Half of 2021, according to CEO Peter Rawlinson.
🕹 Lyft Self-Driving Unwind Lyft is reportedly selling its autonomous driving & research unit to a subsidiary of Toyota Motors. Level 5, the name of the unit, will be sold to Woven Planet Holdings Inc, joining Uber in the forfeit of autonomous driving due to its costly research and development. The deal agreed was a $200Mln payout with $350Mln to be distributed across five (5) years. More details from (BBG).
🎮 GameStop At-The-Market Offering GME announced after the bell that they completed their ‘ATM offering’, selling 3.5 Mln shares for $551Mln. GameStop has been drowning in debt caused by the pandemic and will use the funds to not only pay some debt down but further accelerate its digital transformation. Investors seem to be taking the news as positive as the stock is rallying in afterhours trading. More details (Here)
The Green Trade: Energy, Auto and Storage (Part II)
♻️ Green energy stocks were flying in Monday’s trading session, following President Biden’s comments to cut U.S. greenhouse gas emissions by half by 2030 just last week. Fueling the rally is a combination of positive catalysts outlined in a report from thefly.com. The report highlights the advantages of the 15 Bln package released by the White House and how it will help green companies capitalize on the increasing shift to alternative energy.
As covered in our previous “The Green Trade” edition, Green energy stocks have been showing relative strength versus the broader market as of the past sessions. Who will be the winners in the race for electrification and emissions cut?
Green Energy Basket
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On Next Edition: Semiconductors: The Digital Age
Disclaimer: I am not a financial advisor. This is not a recommendation to buy or sell any securities. Do your own research and asses your own risk.