Top News  Shutterstock Stocks bounced back on Friday following a pair of strong U.S. economic reports and as investors reassessed concerns from news the previous day that the Biden administration could seek a big boost to capital gains taxes for the rich. The S&P 500 advanced 1.1%, led by financial and tech shares, while the tech-heavy Nasdaq jumped 1.4% and the Dow Jones lagged with a 0.7% gain. Homebuilding stocks were a tower of strength, as data showed U.S. new-home sales rebounding sharply in March to the highest since 2006, and a measure of output at U.S. manufacturers and service providers reached a record high in April. For the week, the S&P, Dow and Nasdaq all closed with small losses    | TOGETHER WITH  |
|---|
|
| | Top News Shutterstock Stocks bounced back on Friday following a pair of strong U.S. economic reports and as investors reassessed concerns from news the previous day that the Biden administration could seek a big boost to capital gains taxes for the rich. The S&P 500 advanced 1.1%, led by financial and tech shares, while the tech-heavy Nasdaq jumped 1.4% and the Dow Jones lagged with a 0.7% gain. Homebuilding stocks were a tower of strength, as data showed U.S. new-home sales rebounding sharply in March to the highest since 2006, and a measure of output at U.S. manufacturers and service providers reached a record high in April. For the week, the S&P, Dow and Nasdaq all closed with small losses | |
| Consumer Tobacco stocks like Altria (MO) and British American Tobacco (BTI) sold off this week amid reports of new regulatory efforts by the Biden administration. Under consideration is requiring tobacco companies to lower the nicotine levels of all cigarettes sold in the U.S. to a level at which they are no longer classified as addictive. The move comes as administration officials approach another deadline on whether or not to ban menthol cigarettes.
Bigger picture: The FDA must respond in court by April 29 to a citizen's petition to ban menthols by disclosing whether the agency intends to pursue such a policy. The Biden administration is weighing whether to move forward on a menthol ban or a nicotine reduction in all cigarettes - or both. The moves are intended to push smokers to either quit or switch to lower-nicotine alternatives such as nicotine gums, lozenges or e-cigarettes, as well as targeting smoking in younger people.
"Any action that the FDA takes must be based on science and evidence and must consider the real-world consequences of such actions, including the growth of an illicit market and the impact on hundreds of thousands of jobs from the farm to local stores across the country," an Altria spokesman said in response to the deliberations.
Go deeper: Both policies would take years to implement and would likely face a long stretch of legal challenges, but they add to recent government efforts to curb smoking across the globe. New Zealand last week proposed sharply reducing nicotine levels in cigarettes and gradually raising the legal smoking age. A "smoke-free generation policy" could also ban smoking for anyone born after 2004 in a bid to make the country smoke-free by 2025. | |
| Sponsored By VantagePoint  If you find it hard to separate your emotions from your trading, artificial intelligence may be the answer. Using thousands of data points from global intermarket analysis, A.I. navigates the market for you so you can choose the best trades. See a FREE live demo here. | |
| Media Growth worries surrounded Netflix (NFLX) following its earnings report after Tuesday's close, sending the stock down nearly 9% in AH trading. The streamer only added 3.98M paid net subscribers during Q1, short of its guidance for 6M and consensus forecasts of 6.29M. Despite the headlines, Netflix is turning into a cash cow (reporting net income of $1.71B, or $3.75 a share) and is even returning some of that cash to investors via its first stock buyback plan in nearly a decade.
Bigger picture: Netflix has missed its own subscriber forecasts before and the company has repeatedly warned of a slowdown following a pandemic-fueled expansion, but investors were looking for something else. The company projected net adds of just 1M for the second quarter, meaning it would end the first half of the year nearly 6M subscribers short of where the Street projected it would be by that time. Netflix would also require an addition of nearly 21M subscribers in the second half of 2021 to reach analysts' year-end target of 229.4M.
In its quarterly shareholder letter, Netflix blamed part of this year's lag on a "lighter content slate" caused by last year's pandemic-related production shutdowns. For 2021, the streaming giant is splurging another $17B on content and "we'll continue to deliver an amazing range of titles for our members." That includes new seasons of The Witcher and Cobra Kai, and some even expect a new season of the company's blockbuster series Stranger Things in that period as well.
Outlook: Many rivals are coming after Netflix, including Prime Video (AMZN), Disney+ (DIS), HBO Max (T), Peacock (CMCSA) and Paramount+ (VIAC). But the platform still believes the entertainment market is huge and it has plenty of room to grow. It cautions against comparing services on subscriber figures alone - considering the noise of "bundles, discounts and other promotions" - saying instead the focus should be on engagement and revenue as key performance indicators. However, with millions of Americans getting vaccinated and the economy opening up, the question remains whether people will cut back on their streaming subscriptions for other forms of public entertainment. (254 comments) | |
| Trending Convening a virtual climate summit with 41 world leaders, President Biden announced his latest steps against climate change. He pledged to cut U.S. greenhouse gas emissions by at least in half by 2030, though the initial proposal will offer broad strokes rather than a detailed breakdown. The target would represent a near-doubling of the U.S. commitment under the 2015 Paris climate agreement, when then-President Obama vowed to slash emissions by 26-28%, compared with 2005 levels.
Bigger picture: The announcement builds on other climate policies Biden has proposed in his first 100 days in office, including a plan to integrate climate risk into the financial system and a $2T infrastructure package. He's also set to issue an executive order on climate disclosure within the capital markets, a move that could shift investments and allocations in the fossil-fuel and renewables sectors. "Suddenly people are going to be making evaluations considering long-term risk to the investment based on the climate crisis," said U.S. climate envoy John Kerry.
It may already be happening. Electric vehicle stocks jumped after the latest climate headlines on Wednesday, as well as shares of solar companies. According to Bank of America, 90% of companies in the S&P 500 also now publish sustainability reports, up from 20% in 2011, suggesting the trend has gone mainstream.
Go deeper: Corporate America is warming up to Biden's new climate target. More than 400 businesses and investors, including Apple (NASDAQ:AAPL), Alphabet (GOOG, GOOGL), Coca-Cola (NYSE:KO), General Electric (NYSE:GE), Unilever (NYSE:UL) and Walmart (NYSE:WMT), have signed an open letter that backed cutting U.S. greenhouse gas emissions by at least 50% below 2005 levels by 2030. Green investing advocate Ceres said the signatories employ a combined 6M American workers across all 50 states and represent more than $4T in annual revenue. (283 comments) | |
| Sponsored By VantagePoint  | |
| Financials A new term started hitting financial markets called "swarm trading." We saw the trend many times over the past year, ranging from the GameStop (GME) and AMC (AMC) short squeeze to the Hertz (OTCPK:HTZGQ) bankruptcy bid-up and Kodak (KODK) craze that preceded it. Other events that did not fare as well was the highly publicized "Doge Day" (DOGE-USD) this week that was supposed to take the crypto to $1. The tactic sees people pile into these names, ignoring fundamentals, technicals and other catalysts, until the last trader is left holding the bag.
Meet the newest target: Greenlight Capital's David Einhorn cited a deli in New Jersey last week as proof of a "quasi-anarchy" market that's "fractured and possibly in the process of breaking completely." The store, located in a Philly suburb called Paulsboro, generated only $35,748 in sales over the last two years, but is publicly listed as Hometown International (OTCPK:HWIN) and valued at over $100M. "The pastrami must be amazing," Einhorn remarked, as share volumes surged, with swarms of traders adding on the Russian dressing.
"It used to be that people ran away from brewing bubbles, eschewing stocks and other financial assets that seemed massively overvalued or just plain stupid. Nowadays people run towards them," writes Tracy Alloway at Bloomberg.
The latest: Hometown International was delisted from the OTCQB over-the counter market "for not complying with the rules" and was slapped with a warning label, according to the group's CEO Cromwell Coulson. The retail trading sensation is also under the microscope, while its effects are being assessed in relation to market quality. Will newly confirmed SEC Chair Gary Gensler, Wall Street's top cop, make some regulatory moves? | |
| Economy President Biden is set to announce tax increases on the wealthy as soon as next week to pay for an increase in funding for childcare and education. The proposal, called the "American Families Plan," would reverse some of former President Trump's tax cuts from 2017, while the capital gains tax for Americans making over $1M per year could nearly double to 39.6%. Coupled with an added 3.8% tax linked to the Affordable Care Act, that's a potential 43.4% levy. The new package would also include an increase in the top income tax rate, building on a recent infrastructure proposal to raise the corporate tax rate to 28%.
The news knocked sentiment on Wall Street on Thursday, which turned south towards the end of what had been a positive session (unemployment claims hit a pandemic low). All of the major stock indexes ended the day down 1%, though some cautioned it was a "knee-jerk reaction" or the upcoming proposal would be hard to pass in Congress. The proposal also weighed on the price of Bitcoin (BTC-USD), which was already on the decline and slipped through the $50,000 level.
Quote: "We're still finalizing what the pay floors look like," White House Press Secretary Jen Psaki told reporters, in response to questions about deterring long-term investing. "The president's calculation is that there is a need to modernize our infrastructure, invest in childcare and early childhood education, and he should propose a way to pay for it."
"His view is that can be on the backs of the wealthiest Americans, as well as corporations and businesses, who can afford it, and that won't have a negative impact," she added. "There are alternative views, and there are proposals that don't exist yet on how to pay for it. That will be part of the discussion."
Go deeper: Biden's proposals on capital gains would only affect the federal rate. Wealthy individuals who live in California and New York, which tax capital gains as regular income at 13.3% and 11.85% (plus 3.88% in NYC), would see total capital gains duties of nearly 60%. Could the changes shake up markets? While the top 1% have always controlled 70% to 80% of stock market value in the U.S., according to the Federal Reserve, the top 10% of households by net worth owned 87.2% of American equities in 2020, the highest level of ownership ever. (35 comments) | |
TOGETHER WITH  U.S. Indices
Dow -0.5% to 34,043. S&P 500 -0.1% to 4,180. Nasdaq -0.3% to 14,017. Russell 2000 +0.4% to 2,272. CBOE Volatility Index +6.7% to 17.33.
S&P 500 Sectors
Consumer Staples -0.5%. Utilities -1.0%. Financials 0.1%. Telecom -0.6%. Healthcare +1.8%. Industrials +0.4%. Information Technology -0.5%. Materials +0.4%. Energy -1.8%. Consumer Discretionary -1.2%.
World Indices
London -1.2% to 6,939. France -0.5% to 6,258. Germany -1.2% to 15,280. Japan -2.2% to 29,021. China +1.4% to 3,474. Hong Kong +0.4% to 29,076. India -2.% to 47,878.
Commodities and Bonds
Crude Oil WTI -1.7% to $62.05/bbl. Gold -0.1% to $1,776.8/oz. Natural Gas +1.5% to 2.72. Ten-Year Treasury Yield +0.1% to 132.45.
Forex and Cryptos
EUR/USD +0.98%. USD/JPY -0.82%. GBP/USD +0.38%. Bitcoin -16.1%. Litecoin -21.8%. Ethereum -0.3%. Ripple -25.7%.
Top Stock Gainers
Galectin Therapeutics (NASDAQ:GALT) +79%. Ocugen (NASDAQ:OCGN) +67%. Shineco (NASDAQ:TYHT) +67%. Uxin Ltd (NASDAQ:UXIN) +64%. Microvision (NASDAQ:MVIS) +63%.
Top Stock Losers
Haemonetics (NYSE:HAE) -42%. Tian Ruixiang Holdings (NASDAQ:TIRX) -28%. Baosheng Media Group (NASDAQ:BAOS) -26%. Danimer Scientific (NYSE:DNMR) -24%. Syndax Pharmaceuticals (NASDAQ:SNDX) -24%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. | |
|
|---|
| |
|
|
EmoticonEmoticon