From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
MORE STIMMY COMING
U.S. stocks fell ahead of a long weekend after the Dow and Nasdaq booked intraday highs earlier in the week. Investors had been betting that President-elect Biden would “go big” on plans for another stimulus package — and that’s exactly what he did, leaving some to “sell on the news” given that much of what’s in Biden’s package was already priced into the market.
The $1.9 trillion COVID relief bill announced by the president-elect is designed to ramp up vaccinations and support the economy and those out of work until the pandemic is in the rearview (another million Americans filed for unemployment benefits in the first week of the year; the pain is far from over). Among the policies included in the plan, which the Biden administration says is its No. 1 priority: direct payments of $1,400 to add to the $600 stimulus checks already going out, increasing enhanced unemployment benefits from $300 to $400 and extending them until the fall, increasing the federal minimum wage to $15, $20 billion for a national vaccination program, and an increase to the child tax credit. The administration reportedly wants to get Republicans in Congress on board but plans to move quickly if they can’t by passing as many of the provisions as possible through budget reconciliation, which only requires 50 votes in the Senate (and which Dems now have).
BIG TECH CRACKDOWN
Facebook and Twitter have lost more than $50 billion in combined market value since the platforms banned President Trump in retaliation for the Capitol riots. At the same time, Apple, Google, and Amazon all saw their shares rise after they dropped the controversial social network Parler. The encrypted messaging apps Signal and Telegram, meanwhile, are seeing tens of millions of new users open accounts, pushing both apps to the top of the download charts. They are benefiting from a perfect storm of sorts: WhatsApp’s privacy update that reminds users their data can be shared with parent company Facebook, misinformation that Facebook can read those messages, and the broader Big Tech crackdown on some far-right accounts that is raising questions about those companies’ iron grip on the modern web.
IPO BONANZA
Three public offerings this week showed that there’s still plenty of gas left in the tank when it comes to the IPO rush that defined much of 2020. First up was Affirm, the buy-now-pay-later service that has partnerships with many popular e-commerce retailers. The stock soared in its market debut on the Nasdaq, pricing at $49 per share and then opening at $91 before closing its first day up nearly 100 percent. Affirm’s stated goal is to become “a viable alternative to credit cards.” The e-commerce site Poshmark followed suit, more than doubling in its $3 billion valuation in its public, up from $1.25 billion in 2019. Poshmark makes money by taking a cut of sales brokered on its platform -- sort of like an eBay specifically for secondhand merchandise. Then came Petco, the 56-year-old pet store chain, which went public for the third time in its history. Petco shares, trading under the ticker ‘WOOF’, popped 63 percent from its initial offering. The company has been investing heavily in e-commerce as it looks to take on Chewy for online supremacy in the pet space. Next up: Roblox, Instacart, Robinhood, and Bumble -- all expected in the coming months.
VACCINE REINFORCEMENTS COMING … EVENTUALLY
Shares of Johnson & Johnson dipped, rose, and then ended the week more or less flat after putting out preliminary data from its coronavirus vaccine trials. The good news: the shot appears to be both safe and effective in patients, regardless of age. The bad news: according to the New York Times, J&J is badly behind in manufacturing enough doses, stung by unanticipated production delays that will harm its ability to meet demand if and when the FDA approves the shot. The U.S. is counting on the J&J vaccine because it’s a single dose, rather than two, and doesn’t require ultra-cold storage. The J&J shot could be granted emergency approval as soon as next month. The reinforcement could be coming at a time when doses reportedly held in reserve and were to be released by the Trump administration apparently don't exist, according to The Washington Post. The uncertainty and chaos surrounding the current administration's Operation Warp Speed might be why the incoming president is doing away with the moniker.
STREAMING WARS
As any boxer knows, the time to deliver the K.O. is when your opponent is on the ropes. That appears to be the strategy behind Netflix’s 2021 programming slate. With movie theater operators hoping to be able to salvage at least some of this year, the streamer is going all-in: a record 71 movies across genres will debut on Netflix in 2021, including major big-budget flicks starring A-listers like Leonardo DiCaprio, Jennifer Lawrence, and Dwayne Johnson — more than one a week — plus more than a dozen drama series. Shares of Netflix were down marginally on the week after rising 67 percent in 2020 to give the firm a market cap of around $220 billion. Not to be left out of the streaming wars, Disney+ is dropping its first Marvel series produced specifically for the platform. Disney shares ended the week lower, but not because of its streaming ambitions. The Mouse House is discontinuing the popular annual passes to its Disneyland park in California, which has now been closed for the better part of a year.
