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| | Top News  Shutterstock Stocks rebounded on Friday after Dallas Federal Reserve President Robert Kaplan said the surge in coronavirus cases could cause him to adjust his views on taking away the Fed's stimulus punchbowl, a change that lifted investors' risk appetites. Kaplan previously spooked markets when he became the first Fed official to say it should consider tapering sooner than anticipated. Following Kaplan's comments, U.S. Treasuries erased earlier gains, with the 10-year yield ending the week at 1.26%, and the dollar slid from nine-month highs. But Friday's bounce was not enough to prevent the three major stock indexes from finishing the week lower as concerns over China regulation weighed, with the Dow dropping 1.1%, the Nasdaq Composite closing down 0.7% and the S&P 500 slipping 0.6%. | | Central Banking Talk about fragile monetary policy... The odds of an interest rate hike in New Zealand on Wednesday went from 100%, to 60% and eventually to no increase at all in the span of 24 hours - following the discovery of a single coronavirus case linked to the Delta variant. The 25 bps hike anticipated by analysts would have signaled a milestone of sorts, with New Zealand becoming the first advanced economy in the world to lift rates since the pandemic. All of that came crashing down after a 58-year-old man in Auckland tested positive for COVID, triggering a Level 4 lockdown (can only leave home for essential services) and marking the country's first case in six months. Background: New Zealand has implemented a "go hard, go early" strategy under Prime Minister Jacinda Ardern, with tough lockdowns and international borders remaining largely closed. Containment success has helped Ardern secure a second term in office, but her popularity recently took a hit due to a delayed vaccine rollout and rising costs (the country is heavily reliant on an immigrant workforce). Only about 20% of New Zealand's 5M people have been fully vaccinated, the slowest among OECD nations, leaving it vulnerable to another outbreak. "Today's decision was made in the context of the Government's imposition of Level 4 COVID restrictions on activity across New Zealand," read a statement from the RBNZ. "The need to reinstate COVID-19 containment measures in some regions highlights the serious health and economic risks posed by the virus... and is a stark example of how unpredictable and disruptive the virus is proving to be." Echoing the sentiment? "The COVID pandemic is still casting a shadow on economic activity. We don't have a strong sense of how that might work out [with the Delta variant]. So we'll just be monitoring it," Fed Chair Jerome Powell said on Tuesday. However, the majority of Fed officials did signal this week that the central bank could start dialing back on pandemic stimulus programs. That's according to minutes from the July meeting of the FOMC, which said a move to pare $80B/month in Treasuries and $40B/month of mortgage securities could happen this year. While there's still debate regarding the timing and pace, officials said tapering would not necessarily mean an imminent rate increase, but then again, that's also a fragile topic. ( 29 comments) | | Sponsored By World Gold Council  Get all the latest insights and research on gold investing with our reports, analysis, and interviews with industry experts. Leverage gold data with our cutting-edge online tools. Discover the strategic advantages of gold. Visit Goldhub from the World Gold Council. | | Covid Statement from the U.S. Department of Health and Human Services: "We are prepared to offer booster shots for all Americans beginning the week of September 20 and starting 8 months after an individual's second dose [of a Pfizer ( PFE) or Moderna ( MRNA) vaccine]... We also anticipate booster shots will likely be needed for people who received the Johnson & Johnson ( JNJ) vaccine... We want to emphasize the ongoing urgency of vaccinating the unvaccinated in the U.S. and around the world. Nearly all the cases of severe disease, hospitalization, and death continue to occur among those not yet vaccinated at all." Those signed on to the declaration included heads of the CDC and FDA, as well as White House chief medical advisor Dr. Anthony Fauci, U.S. Surgeon General Dr. Vivek Murthy and Assistant Secretary for Health Dr. Rachel Levine. Data from Israel: Back in January, Israel struck a vaccines-for-data deal with Pfizer that promised to share vast troves of information from its highly digitized healthcare system in exchange for the continued flow of COVID-19 shots. Last month, the country's health ministry became one of the first in the world to formally recommend booster shots for older adults and to those with weak immune systems. On Wednesday, Maccabi Healthcare Services, Israel's second largest healthcare provider, also released fresh figures that suggested booster shots reduced the risk of infection in the 60-plus age group by 86% and against severe infection by 92%. Of the 105 Israelis who died of COVID in the last week, 103 were either not vaccinated or had not completed the immunization process. Outlook: "We have this expectation that COVID-19 had a start: It started in Wuhan, China, in December 2019. And we have this expectation that it is going to end," said Dr. Daniel Landsberger, chief physician of Maccabi Healthcare Services. "We want a date for it to end." He went on to point out that pandemics are processes, until they run their course or drugs emerge that allow people to live with and manage the disease. "HIV has not ended," he added, pointing to the No. 1 cause of death among Americans (aged 25 to 44) in the 1990s. "We just don't call it an epidemic anymore. We relate to it differently." ( 242 comments) | | Earnings Shares of the popular stock-trading app tumbled more than 7% in AH trading on Wednesday following its first earnings report as a public company. Robinhood Markets ( HOOD) reported a net loss of $502M, or a loss of $2.16 per share, though its revenue more than doubled in the second quarter thanks to a big surge in cryptocurrency trading. In fact, some 41% of the broker's total revenue came from revenue earned from crypto transactions, up from 17% last quarter. Notable fact: Dogecoin ( DOGE-USD) trades accounted for 62% of crypto revenues, as well as 25% of Robinhood's total net revenue of $565M in Q2. The reliance on Doge appeared in a section of the company's 10-Q titled "Risks Related to Our Cryptocurrency Products and Services." It read: "Business may be adversely affected, and growth in our net revenue earned from cryptocurrency transactions may slow or decline, if the markets for Dogecoin deteriorate or if the price of Dogecoin declines, including as a result of factors such as negative perceptions of Dogecoin or the increased availability of Dogecoin on other cryptocurrency trading platforms." Go deeper: Besides the Doge dependency, Robinhood noted that seasonal headwinds and lower trading activity across the industry in Q3 would result in lower revenue and "considerably fewer new funded accounts." The company also expects to record a one-time charge of $1B in stock-based compensation for restricted stock units related to its IPO. In other highlights for the quarter, monthly active users increased 109% to 21.3M and transaction-based revenue rose 141% Y/Y to $451M, with options activity climbing 48% to $165M, cryptocurrencies at $233M vs. $5M a year earlier, and equities transaction-based revenue down 26% Y/Y to $52M. ( 36 comments) | | Outlook The chip shortage hobbling the auto industry is worsening, with several of world's largest automakers facing renewed shortages of silicon. The problem is being compounded by a wave of COVID cases sweeping across southeast Asia, where many of the semiconductors are made. The new disruptions could eventually factor into prices at the dealership and the used car market, as well as weighing heavily on the recovery plans of the manufacturers. Ford: One of its plants in Kansas City is pausing production of the popular F-150 pickup truck ( F) due to chip-related parts shortages. General Motors: The company is halting assembly of its all-electric Chevrolet Bolt ( GM) as it adds extended downtime at production lines in North America. Volkswagen: The German owner of brands including Audi and Porsche warned on the potential for another output cut, saying VW's ( OTCPK:VWAGY) chip supply for Q3 would be "very volatile and tight." The biggest news: Toyota ( TM) is slashing global production in September by 40%, which will affect 14 factories in Japan and overseas plants. The new plans will translate into 540K vehicles next month, down from the 900K it had originally forecast. While Toyota is keeping its previous annual sales and production targets in place for now, shares of the Japanese carmaker fell 4% on Thursday on the latest developments. ( 79 comments) | | Commodities The VanEck Vectors Rare Earth/Strategic Metals ETF ( REMX) has soared 3x as much as the benchmark SPDR S&P 500 Trust ETF ( SPY) over a one-year time frame. And now, the fund could see a new catalyst from the Taliban's takeover of Afghanistan, which is rich in rare-earth metals. REMX aims to track the overall performance of stocks involved in producing, refining and recycling rare-earth and strategic minerals like cobalt, barite, lead, zinc and niobium. Bigger picture: REMX has already been one of the market's top ETFs. The fund has a YTD performance of +54%, a one-year return of +137% and has yielded 95% over five years. To put that into perspective, REMX's performance is nearly triple SPY's +19% YTD gain and more than triple SPY's one-year performance of +31%. REMX is also one of the only pure-play ETFs to focus on rare-earth metals. It has $626M assets under management, an expense ratio of 0.59% and has witnessed over $367M of capital inflows YTD. "It should be an international initiative to make sure that if any country is agreeing to exploit its minerals on behalf of the Taliban, to only do it under strict humanitarian conditions where human rights, and rights for women are preserved in the situation," said Ahmad Shah Katawazai, a former diplomat at the Afghan Embassy in Washington D.C. What to watch: Afghanistan is estimated to have $1T to $3T of rare-earths and shares a 57-mile border with China. The latter is widely known as the world's dominant player in rare-earth metals (owning 35% of global reserves), and only hours after the Taliban overran the Afghan government, said it was ready for "friendly cooperation." Beijing has also been looking to play a constructive role in Afghanistan's peace and reconstruction process and previously threatened to cut off rare-earth supplies to the U.S. during the trade war in 2019. ( 99 comments) | | U.S. Indices
Dow -1.1% to 35,120. S&P 500 -0.6% to 4,442. Nasdaq -0.7% to 14,715. Russell 2000 -2.6% to 2,166. CBOE Volatility Index +20.1% to 18.56.
S&P 500 Sectors
Consumer Staples +0.4%. Utilities +1.8%. Financials -2.3%. Telecom -0.4%. Healthcare +1.8%. Industrials -2.3%. Information Technology +0.4%. Materials -3.1%. Energy -7.3%. Consumer Discretionary -2.2%.
World Indices
London -1.8% to 7,088. France -3.9% to 6,626. Germany -1.1% to 15,808. Japan -3.5% to 27,013. China -2.5% to 3,427. Hong Kong -5.8% to 24,850. India -0.2% to 55,329.
Commodities and Bonds
Crude Oil WTI -9.6% to $61.86/bbl. Gold +0.2% to $1,782.5/oz. Natural Gas -0.6% to 3.838. Ten-Year Treasury Yield +0.1% to 134.16.
Forex and Cryptos
EUR/USD -0.81%. USD/JPY +0.2%. GBP/USD -1.72%. Bitcoin +3.8%. Litecoin -0.5%. Ethereum -0.3%. Ripple -1.6%.
Top Stock Gainers
Virpax Pharmaceuticals (NASDAQ:VRPX) +243%. Regencell Bioscience (NASDAQ:RGC) +119%. China Liberal Education (NASDAQ:CLEU) +44%. GeoVax Labs (NASDAQ:GOVX) +42%. Praxis Precision Medicines (NASDAQ:PRAX) +36%.
Top Stock Losers
China Finance Online (NASDAQ:JRJC) -54%. Ontrak (NASDAQ:OTRK) -52%. Endo International (NASDAQ:ENDP) -46%. Zhangmen Education (NYSE:ZME) -42%. The OLB Group (NASDAQ:OLB) -41%.
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