Top News  The Nasdaq is leading the charge on Wall Street this morning, with futures tied to the index ahead by 2.5%, followed by a 1.2% advance for the S&P 500 and 0.6% gain for the Dow. It marks some renewed momentum for tech shares, which have been beaten down in recent weeks as investors rotated into value sectors like energy, financials and industrials. In fact, the Nasdaq closed in correction territory on Monday, down 11% from an all-time high in February.
Bigger picture: "The Nasdaq is quite sensitive to yield changes at the moment," said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg Bank. Overnight, the 10-year Treasury yield halted its recent rally, dropping 6 bps to 1.53%. "Even though we got somewhat of a respite from the rising-rate reaction, we do think that's really important to keep an eye on," added Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. "Certainly the trajectory for rates is up as the economy reopens, so a lot of it just depends on the speed and the pace of how quickly rates go up."
Yesterday, U.S. Treasury Secretary Janet Yellen also echoed comments made by Jerome Powell on inflation. She dismissed fears that the $1.9T coronavirus relief bill is so big that it will cause price problems, or that it is excessive given the economy's signs of a recovery. Yellen additionally called the impact on women and minorities from COVID-19 "absolutely tragic," but said the U.S. would return to pre-pandemic levels of employment in 2022.
Latest on the aid package? According to Democratic aides and lawmakers, the bill will return to the House from the Senate today. Changes were made to appease moderates and comply with parliamentary rules (i.e., dropping a proposed minimum wage increase), though the modifications were likely mild enough to have progressive Democrats climb aboard. The final House vote could potentially slip to Wednesday due to logistics, though if passed, some Americans might start receiving direct payments as soon as this week. (25 comments)
   | | Top News The Nasdaq is leading the charge on Wall Street this morning, with futures tied to the index ahead by 2.5%, followed by a 1.2% advance for the S&P 500 and 0.6% gain for the Dow. It marks some renewed momentum for tech shares, which have been beaten down in recent weeks as investors rotated into value sectors like energy, financials and industrials. In fact, the Nasdaq closed in correction territory on Monday, down 11% from an all-time high in February.
Bigger picture: "The Nasdaq is quite sensitive to yield changes at the moment," said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg Bank. Overnight, the 10-year Treasury yield halted its recent rally, dropping 6 bps to 1.53%. "Even though we got somewhat of a respite from the rising-rate reaction, we do think that's really important to keep an eye on," added Lisa Erickson, head of traditional investments at U.S. Bank Wealth Management. "Certainly the trajectory for rates is up as the economy reopens, so a lot of it just depends on the speed and the pace of how quickly rates go up."
Yesterday, U.S. Treasury Secretary Janet Yellen also echoed comments made by Jerome Powell on inflation. She dismissed fears that the $1.9T coronavirus relief bill is so big that it will cause price problems, or that it is excessive given the economy's signs of a recovery. Yellen additionally called the impact on women and minorities from COVID-19 "absolutely tragic," but said the U.S. would return to pre-pandemic levels of employment in 2022.
Latest on the aid package? According to Democratic aides and lawmakers, the bill will return to the House from the Senate today. Changes were made to appease moderates and comply with parliamentary rules (i.e., dropping a proposed minimum wage increase), though the modifications were likely mild enough to have progressive Democrats climb aboard. The final House vote could potentially slip to Wednesday due to logistics, though if passed, some Americans might start receiving direct payments as soon as this week. (25 comments)
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| Cryptocurrency Shares of prominent crypto exchange Coinbase (COIN) changed hands at a roughly $90B value last week, according to a fresh report from Bloomberg. It's an astounding valuation given that the company was appraised at $8B in October 2018. The valuation is based on $350 a share, the price the stock was trading on the Nasdaq Private Market on Thursday. The auction was the last before Coinbase goes public in late March, though private trading is usually more restrictive and volumes are smaller, so it's not a perfect picture of a company's value.
Backdrop: Coinbase started operations in 2012 and operates one of the largest digital currency exchanges. The bulk of its revenue comes from trading fees, though it also launched the Coinbase Index Fund in 2018, which is available only to accredited investors (defined as those with an annual income of $200K or a net worth of $1M or more). Going public can help push cryptos like Bitcoin (BTC-USD) and Ethereum (ETH-USD) towards mainstream adoption and may give investors more optimism for digital finance. Bitcoin is up 8% this morning to $54,153.
By the numbers: Coinbase boasts 43M retail users and 7,000 institutional clients. There are also 115K partners based in over 100 countries worldwide. Last year, the crypto exchange swung from a prior loss to a profit of $322M, while net revenue more than doubled to $1.14B.
Bigger picture: The offering will be the first major direct listing (where a company floats existing private shares) to take place on the Nasdaq. All the previous ones happened on the New York Stock Exchange - like Spotify (SPOT), Slack (WORK), Asana (ASAN) and Palantir (PLTR). Direct listings, along with SPACs, have grown in popularity over the past year as companies sideline the traditional IPO process via cheaper and less complicated ways to go public. (5 comments) |
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