Markets Slide as Stimulus & Infrastructure Costs Scare Investors

Dow: -0.94% | Nasdaq: -1.12% | S&P: -0.76%

Catch Up Quick

• Robinhood officially filed for its initial public offering

• The White House is preparing a $3T infrastructure and economic spending bill

• At least 10 people were tragically killed in a Colorado supermarket shooting

• Microsoft ($MSFT) may buy audio messaging platform Discord for >$10B

• Shares of Home Depot ($HD) and Lowe’s ($LOW) touch all-time highs (a possibility we noted a few months ago)

• A new Microsoft study found that 41% of workers admit they may quit this year, with business leaders “out of touch” (Bloomberg)

• Cybersecurity group Citizen Lab found that TikTok's algorithm provided no immediate national security threat

• Spark Capital, after winning a competitive process to lead a $20M investment in Dispo, a retro photo-sharing app co-founded by YouTube star David Dobrik, said it is severing all ties with the startup, which had been valued at $200M

• The Senate will take up two hate crime bills → one that addresses anti-Asian hate and one focused on domestic terrorism and white supremacy

• Intel ($INTC) is spending $20B to build two new chip plants in Arizona

• GoPuff, an instant delivery platform for everyday items, raised ~$1.2B led by D1 Capital Partners at an $8.9B post-money valuation

• AstraZeneca ($AZN) reportedly released outdated information in a disclosure of trial results for its COVID-19 vaccine

• The Fed said it sent ~$87B billion to the Treasury Department in 2020

Thought of the Day

• According to John Hopkins University, the 7 day average of new coronavirus cases has risen 5% over the past week in ~27 states, as municipalities lift stay-at-home restrictions

• The news has played a role in facilitating a market-wide pullback in what many deem “recovery” stocks → airlines, cruise ships, hotels, movie theaters, etc

• While the fear of new, contagious virus strains should be taken seriously, recent economic data suggests that the economy is still primed for a boom in consumer spending 

• According to credit and debit card purchase flow (via Earnest Research), spending on gyms, salons and spas has recently climbed to the highest levels since the start of the pandemic 

• Furthermore, spending on vacation rental sites Airbnb, HomeAway and Vrbo has surprisingly risen above pre-pandemic levels while lodging, air travel, and online travel booking platforms also set new highs

• This data is synchronous with a surge in visits to retail and recreational locations, which reached new highs this month, topping holiday season traffic (where travels typically peak)

• ~2.5M people (and counting) are becoming vaccinated each day, up ~45% from a month ago, as J&J’s single dose vaccine comes online

The Bottom Line

• As weather warms and summer nears, CY Q2 and Q3 could bring a number of positive earnings surprises for recovery stocks, foreshadowed by this recent data, vaccination rates, and fresh stimulus!

  Afternoon Audit Home