The Afternoon Audit
Friday | 6.12.2020

Markets Begin to Rebound

We sincerely appreciate your patience, our team is working hard to ensure such a delay will not happen again

Catch Up Quick

• Markets rallied as investors look to recoup some of yesterday's losses

• Moderna expects to bring its experimental coronavirus vaccine to market by 2021

• Less than 41,000 people were used to determining May’s unemployment figures

• Hertz is looking raise $1 billion by issuing 250 million new shares of common stock

• The U.K. economy shrank by a record 20.4% in April

My Friday Opinions

• Instacart recently raised $225 million, putting them at $13.7 billion dollar valuation -- Instacart, once an industry pioneer, is now beginning to face the reality of having to compete against its suppliers (grocers) who are developing their own in-house delivery infrastructure

• DoorDash plans to sell hundreds of millions of dollars in equity to T Rowe Price, Fidelity and others in a deal valuing it at $15 billion -- In light of Grubhub’s recent consolidation, and activity from Uber Eats, DoorDash looks to be arming its warchest, likely in preparation for its own acquisition

• Contrary popular narrative, analysis conducted by Barclays concludes that retail traders are in fact not the driving force behind recent market rallies -- I believe the rally that began in March was fueled by irrational optimism stemming from a lack of economic data, however now that we have said data I expect a greater selloff

Thought of the Day

• Despite the U.S officially being in a recession with record levels of unemployment and business foreclosures, the housing market saw the median listing price rise 1.4% YoY

• This is because while demand has plummeted, so has supply, thus allowing prices to remain in equilibrium

• But I believe that recent efforts to re-open have created a false sense of economic security

• As a result, states are looking to lift the moratorium placed on evictions while simultaneously reduce stimulus checks by the end of July

• Given the current climate, doing the above will inevitably result in an unprecedented rise in evictions and foreclosures

• Effectively increasing the supply of homes on a market already experiencing diminishing demand

• Thus I foresee a substantial drop in housing prices come fall if we are unable to get the economy back on its feet over summer

The Bottom Line

• Pay attention to early-bird states who have begun initiating a full-scale reopening

• The success of their local economies over the next month will be highly indicative of the success of our national economy, allowing us to better gauge the feasibility of a successful reopening and likelihood of another housing market collapse