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| | Top News  Shutterstock Stocks touched their lowest levels in four weeks Friday as inflation fears took hold and a range of Chinese economic indicators pointed to a pullback. The University of Michigan's preliminary sentiment index edged up, but buying conditions in the U.S. for household durables, homes and motor vehicles all fell to the lowest in decades last month due to complaints about high prices. Meanwhile, the 10-year U.S. Treasury yield jumped to a two-month high of 1.38%. The jittery mood was demonstrated by this week's $45 billion in capital outflows from money market funds, the largest outflow of the year. For the week, the S&P 500 slipped 0.6%, the Nasdaq Composite closed down 0.5% and the Dow Jones average fell just 0.1%. The weekly drop in the Dow was the third in the row, which has not happened since September of 2020. | | Economy House Democrats spelled out a series of proposed tax increases on Monday, attempting to piece together enough votes for a sweeping spending package at the heart of President Biden's economic agenda. Under the proposal, tax increases and enforcement would offset up to $3.5T in spending on the social safety net, like Medicare, childcare and a national paid-leave program. Also known as the "human infrastructure" side of a broader infrastructure proposal, the package would increase renewable energy tax breaks and establish a broader climate change policy. What's in the bill? The proposal would increase the top corporate tax rate to 26.5% (from 21%) and the top individual rate to 39.6% (from 37%), respectively. Meanwhile, the top federal rate on capital-gains taxes would be raised to 25% (from 20%), and - added to an existing 3.8% surtax on net investment income - the total tax bite would be 28.8%. The bill would also impose a 3-percentage-point surtax on people making over $5M and provide $78.9B in funding to the IRS to bolster tax enforcement for taxpayers earning more than $400K a year. Getting to $3.5T... According to the Joint Committee on Taxation, the plan includes about $1T of tax increases on high-income households and about $1T on corporations. Democrats intend to generate another $120B from tougher tax enforcement and $700B from drug-pricing policy changes. The legislation also assumes another $600B in revenue from faster economic growth. Outlook: The release of the tax details was the last major missing piece in the Democratic economic plan and will accelerate lawmakers' negotiations over new spending. Republicans are expected to mount unanimous opposition to the proposal (which would reverse the 2017 tax cuts), while Democrats have few votes to spare in the House and none in the Senate. Just last week, Sen. Joe Manchin (D., W.Va.), an influential moderate vote, penned an op-ed questioning the spending package's effect on inflation rates, budget deficits and overall debt levels. ( 187 comments) | | Sponsored By FarmTogether  Farmland investing - a newly accessible asset class. 7-13% IRR, 3-9% cash yield, stable over several decades, superior hedge against inflation, positive social and environmental impact. Diversify your portfolio, increase your passive income, and drive agriculture toward sustainability on a massive scale. Invest today, minimum of 15k, only available to accredited investors. Learn More. | | Tech Looking to fuel growth this holiday season, Apple ( AAPL) hosted its "California streaming" fall hardware event on Tuesday, introducing its new iPhone 13 lineup, the Watch Series 7 and two iPad refreshes. Shares of Apple, as well as supplier stocks, dipped about 1% during the show, while AT&T ( T) was quick out of the gate to offer promotions like free new iPhone Pros for some users. As the dust settled, Wedbush's Dan Ives called the 1TB iPhone 13 a "potential game changer," while Satori Fund's Dan Niles said he was shorting Apple in the wake of its product announcements. iPhone 13: The lineup will consist of four models, two base and two Pro, with the same sizes as last year's iPhone 12 family. Entry-level models include the 5.4-inch iPhone 13 Mini and 6.1-inch iPhone 13 priced at $699 and $799, respectively, with 128GB, 256GB and 512GB storage configurations. As expected, the primary iPhone 13 upgrades are a bigger battery, camera improvements and the faster A15 Bionic processor, which Apple said offers "the fastest CPU in any smartphone, up to 50% faster than the leading competitor." At the top of the price range, the iPhone 13 Pro will get 1 terabyte of storage for $1,499, while the 1TB Pro Max will have a price tag of $1,599. iPad: The new base model (starting at $329) will include the A13 Bionic processor, offering "three times faster performance than the average Chromebook and six times faster than the bestselling Android tablet." The base model also inherits ultrawide camera and Center Stage tracking, while featuring a powerful neural engine that will better support functions like Live Text. Apple separately updated its iPad Mini ($499) for the first time since early 2019, gaining 5G support, new color options, rounded corners, better CPU, and a screen size of 8.3 inches (from 7.9 inches). iPad sales have experienced a resurgence during the pandemic due to remote learning, streaming TV/movies and videogames. Watch Series 7: The device, which was reportedly delayed by production issues, was announced at the event on schedule, but availability will be "later this fall" for $399. The main upgrade was the display size, with the smaller Watch model moving from 40-millimeters to 41-millimeters and the larger from 44-millimeters to 45-millimeters. The wearables also offer 18 hours of battery life, the same as the Watch Series 6 from last year. ( 109 comments) | | Space The first all-civilian mission to orbit Earth blasted off on Wednesday night at 8:02 p.m. ET. SpaceX ( SPACE) powered the expedition, known as Inspiration4, using one of its Dragon capsules atop a reusable Falcon 9 rocket. While the civilian mission is part of a charity initiative to raise money for St. Jude Children's Research Hospital, it's being sized up as a coming-of-age moment for an commercial spaceflight market which hopes to send many more people to space and even deeper into the solar system. Bigger picture: Inspiration4 will be commanded by Shift4 Payments (NYSE: FOUR) CEO and accomplished pilot Jared Isaacman. The crew of four are spending three days in orbit and are performing a number of medical experiments like gathering data about their "movement, sleep, heart rate and rhythm, and blood oxygen saturation levels." That information will be crucial for coming missions as more astronauts blast into the heavens (only 600 people have been to space in history). The latest endeavor supported by SpaceX will go well beyond the International Space Station at a height of 360 miles above Earth. That compares to the recent flights of Virgin Galactic's (NYSE: SPCE) Richard Branson (50 miles up) and Blue Origin's ( BORGN) Jeff Bezos (65 miles up), who squabbled over the definition of space during their suborbital flights in July. "We'd like to see aircraft like - airline, like - operations from a human spaceflight perspective, and so this chance to have our first commercial all-civilian flight is awesome," said Benji Reed, SpaceX director of human spaceflight. Snapshot: Interest in space has been growing at an exponential rate, especially in the public markets. Many space companies have already closed SPAC deals to go public this year, including Redwire (NYSE: RDW), AST SpaceMobile (NASDAQ: ASTS), Astra (NASDAQ: ASTR), Spire Global (NYSE: SPIR), Momentus (NASDAQ: MNTS) and Rocket Lab (NASDAQ: RKLB). Last month, satellite launch company Virgin Orbit announced another merger with SPAC NextGen Acquisition Corp. II (NASDAQ: NGCA), while Cathy Wood launched the ARK Space Exploration ETF (BATS: ARKX) earlier this year. Funding the industry: From 2000 to 2018, space startups drew $22.6B in investment, but that number has jumped rapidly over the last few years, according to a report from BryceTech. Space startups saw $6.5B of inflows in 2019, while 2020 brought in about $7.6B in investment (around 6% came from going public via SPACs). In fact, 342 investors invested in over 120 upstarts last year, with nine companies bringing in 80% of the total funding. Outlook: Congress has restricted the FAA from regulating the safety of commercial space flights since 2004 to help the sector develop without heavy compliance costs. The policy has been extended several times over the years and now runs until 2023. Crews today fly under a regime known as "informed consent," meaning potential astronauts take on similar risks to skydivers and bungee jumpers. Companies are fighting for share in a space market that will triple in size to more than $1T in annual sales by 2040, according to Morgan Stanley, whose forecast assumes rapid developments in space tourism, moon landings and satellite broadband Internet. ( 51 comments) | | On The Move The latest crackdown in China made numerous headlines this week, with Macau now in the regulatory crosshairs of the CCP. The largest gambling market in the world has historically operated as a special administrative region, meaning it was at least an arm's length away from Beijing. But the area known for casino gambling is also plagued with money laundering and loan-sharking, triggering a fresh look from the Chinese government. Market movement: Casino stocks like Wynn Resorts ( WYNN), Melco Resorts & Entertainment ( MLCO), Las Vegas Sands ( LVS) and MGM Resorts ( MGM) suffered big losses on Wednesday and Thursday on word of increased government supervision. Any step in that direction could also raise concerns on how the gaming license renewal process will shake out. The latest development adds to existing concerns about Macau's pandemic recovery on the heels of a COVID-19 outbreak in Fujian.Look to Vegas? "We have a favorable view of the LV Strip, as we envision a strong recovery there, with near-term leisure/transient demand bridging the gap to a return of convention/group business starting in 2H21 and picking up steam into 2022-2023. For LV Strip stocks ( MGM, CZR), we could envision today's solid leisure/transient demand combining with a gradual group recovery to drive a prolonged beat/raise cycle into 2023," Wells Fargo wrote in a research note. J.P. Morgan also said it prefers domestic regional/Las Vegas Locals casino operators like Boyd Gaming ( BYD) and Red Rock Resorts ( RRR) in the near term for their positive fundamental profile, growth trajectory, strong free cash flow, and potentially increased capital return. ( 37 comments) | | Central Banking The Federal Reserve announced plans to examine its ethics rules for financial holdings after two regional presidents came under fire for some of their recent transactions. Those dealings were widely panned for the potential conflict of interest at a time when the Fed is already in the spotlight over unprecedented pandemic market interventions that critics say led to elevated stock prices and benefited richer Americans. The appearance of self-dealing could also prove problematic for an institution tasked with oversight of U.S. employment, inflation, interest rates and liquidity markets. Backdrop: Last week, disclosures filed by the Fed's 12 regional presidents revealed some had actively traded stocks in 2020 that may have been susceptible to rising Treasury yields due to their high valuations. Robert Kaplan, a Fed voting member on rates last year, made several million-dollar-plus stock trades, while Eric Rosengren faced scrutiny over equity transactions tied to real estate, an industry he had been commenting on and was impacted by the pandemic (other presidents also held million-dollar financial positions). Since then, Kaplan and Rosengren have said they would offload all their stocks, but Senator Elizabeth Warren pushed further, saying regional Fed banks should adopt rules that would prevent their leaders from any trading activity. "Fed Chairman Jay Powell has directed staff to take a fresh and comprehensive look at the rules to identify ways to tighten those standards and will make changes as appropriate to the Fed's code of conduct," said a spokesman from the central bank. "The trust of the American people is essential for the Federal Reserve to effectively carry out our important mission." The pandemic and subsequent recession amplified the Fed's power in 2020, giving it a leading role in the U.S. economic recovery. It also magnified the Fed's influence in financial markets as the central bank cut its short-term benchmark interest rate to zero in March 2020, and moved deeper into its purchases of corporate debt, even buying bonds of industry stalwarts like Apple ( AAPL), Verizon ( VZ), Visa ( V) and Home Depot ( HD). It has since purchased trillions of dollars in Treasurys and MBSs to hold down longer-term rates, which has made stocks a more attractive investment. How far will it go? Under current rules, Fed officials cannot invest in banks since many of them are supervised by the Fed. They are also prohibited from making trades during the 10-day blackout period before each FOMC meeting and are not supposed to hold a security for less than 30 days. The Fed's overall structure is also complex, with the 12 regional banks chartered as private organizations, but are overseen by the Fed's Board of Governors in Washington. While regional banks have their own codes of conduct, they are largely identical to the rules that govern the Fed's board, which have similar guidelines on investing and trading as other government agencies. ( 15 comments) | | U.S. Indices
Dow -0.1% to 34,585. S&P 500 -0.6% to 4,433. Nasdaq -0.5% to 15,044. Russell 2000 +0.3% to 2,234. CBOE Volatility Index -0.7% to 20.81.
S&P 500 Sectors
Consumer Staples -0.9%. Utilities -3.1%. Financials -0.1%. Telecom -1.2%. Healthcare -0.2%. Industrials -1.6%. Information Technology -0.7%. Materials -3.2%. Energy +3.3%. Consumer Discretionary +0.5%.
World Indices
London -0.9% to 6,964. France -1.4% to 6,570. Germany -0.8% to 15,490. Japan +0.4% to 30,500. China -2.4% to 3,614. Hong Kong -4.9% to 24,921. India +1.2% to 59,016.
Commodities and Bonds
Crude Oil WTI +3.2% to $71.97/bbl. Gold -2.1% to $1,754./oz. Natural Gas +2.5% to 5.061. Ten-Year Treasury Yield -0.2% to 132.83.
Forex and Cryptos
EUR/USD -0.76%. USD/JPY +0.06%. GBP/USD -0.74%. Bitcoin +6.2%. Litecoin +1.9%. Ethereum +5.2%. Ripple -0.2%.
Top Stock Gainers
Corvus Pharma Com (NASDAQ:CRVS) +115%. Greenidge Generation Hldgs Inc (NASDAQ:GREE) +89%. Atyr Pharma Inc (NASDAQ:LIFE) +88%. Leap Therapeutics Inc (NASDAQ:LPTX) +82%. Helbiz Inc (NASDAQ:HLBZ) +61%.
Top Stock Losers
Protagonist Therapeutics Inc (NASDAQ:PTGX) -61%. Mimedx Group Inc (NASDAQ:MDXG) -60%. Virpax Pharmaceuticals Inc (NASDAQ:VRPX) -51%. Tcr2 Therapeutics Inc (NASDAQ:TCRR) -45%. Valneva Se ADR (NASDAQ:VALN) -42%.
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