Stocks Surge Higher on Congressional Prospects of Smooth Presidential Transfer

Dow: +0.69% | Nasdaq: +2.56% | S&P: +1.48%

Catch Up Quick

• After starting 2020 with a $27B net worth, Elon Musk recently passed Jeff Bezos to become the richest person in the world, worth a staggering $185B

• Gaming platform Roblox raised $520M in private funding at a ~$30B valuation, vowing to structure its IPO as a direct listing

• Online lender SoFi announced plans to go public via a SPAC backed by Social Capital Founder Chamath Palihapitiya

• The NYSE will proceed with the delisting of three Chinese telecom companies, reversing course on the decision yet again

• Federal officials are intending to expand the supply of coronavirus vaccines while considering decreasing the required dosage

• Congress reconvened to certify President Biden’s win after yesterday’s chaos

• U.S. employers cut 123K non-government jobs this past December, the first net job loss since April (per ADP’s Private Payroll report)

• Facebook will block Trump from posting at least for the remainder of his term

• Twitter removed 3 Trump tweets, including a video in which he urged rioters to "go home" while telling them them: “we love you” & “you're very special"

• Senator Chuck Schumer calls on VPOTUS Mike Pence to invoke the 25th Amendment to effectively remove Trump from office

• Mohamed A. El-Erian, Chief Economic Advisor at Allianz, says Fed support is fueling a “rational” market bubble

Thought of the Day

• For a company that has respectively made ~$26B & ~$17B in FY2019 and FY2020 from theme parks, cruises, and other in-person, crowded customer experiences, Disney ($DIS) has been an interesting pandemic beneficiary, with shares up over 100% since the 2020 market lows

• With its Broadway shows offline, in-theater movie experiences thwarted, and over 32K employees laid off, the company has lost nearly $5.5B in the past two calendar quarters

• While it’s streaming service and the prospect of millions of global subscribers playing a predictable monthly fee has certainty helped navigate headwinds, there is a more explicit reason outlining the company’s recent, unintuitive success

• Many associate elements of physicality with Disney’s offerings (amusement parks, cruises, plays, movies) however, the main driver of its value add are its intangibles

• The characters, story lines, and fantasies, etc that the company creates and deploys are primary drivers of marketing / customer attraction, as they flow into a scope economics model, allowing any sort of business line to thrive (from amusement parks and action figures to themed cruises and streaming services)

The Bottom Line

• Flexibility is typically not a core aspect investors look for in markets, though it can make or break a company when the road gets rocky!

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