Connect with us


Bitcoin, stocks and crude take off as the markets brace for a wave of stimulus checks




This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.

Good morning. The reflation trade is alive and well, with stimulus talks in the U.S. boosting global equities. That, and a flurry of M&A activity have put investors in a risk-on mood. Elsewhere, crude and Bitcoin continue to soar, and GameStop is up 10% in pre-market trading.

I would be remiss if I didn’t get in a little sports mention up high this morning. Your correspondent tuned into the world’s biggest sporting event yesterday. Yes, I’m referring to the Alpine World Ski Championships in (sigh) Cortina, Italy. If you have 50 seconds to spare, check out the men’s Super G run on the notorious Vertigine—that’s “vertigo,” in English. Let’s hope I don’t need to fish for downhill metaphors to describe the markets this week.

In other sports news, some dude in his 40s won the Super Bowl last night.

In honor of Tom Brady, let’s see if we can find a G.O.A.T. or two—greatest of all trades.

Markets update


  • The major Asia indexes are solidly in the green in afternoon trading, with Japan’s Nikkei up 2.1%.
  • Hyundai and Kia Motors both issued unusual regulatory statements saying they were not in talks with Apple to co-develop an electric vehicle. Shares in both bombed on the news, with Hyundai off 5.8% and those of Kia down nearly 15% lower.
  • Key to the global economic recovery is a successful effort to vaccinate everyone, everywhere. Fortune‘s David Meyer digs into the huge cost of vaccine nationalism for everyone, everywhere.


  • The European bourses were gaining out of the gates with the Stoxx Europe 600 up 0.4% two hours into the trading session.
  • Shares in Dialog Semiconductor were up 16% on news it had agreed to a $6 billion takeover by Japan’s Renesas Electronics.
  • Elsewhere in the world of M&A, Birkenstock is said to be siding with French private equity firm, L Catterton, valuing the iconic sandal maker at as much as €4.5 billion ($5.4 billion).


  • U.S. futures are pushing higher this morning. That’s after the S&P 500 closed Friday at a fresh all-time high. The Dow too is on its longest winning streak since August.
  • U.S. Treasury Secretary Janet Yellen hit the Sunday talk shows to talk up stimulus package No. 3, and the markets like what they heard. We’ll get more details on the size of the $1.9 trillion proposal this week—and who won’t qualify for $1,400 stimmy checks.
  • Earnings season continues this week with reports from Twitter (tomorrow), Coca-Cola, Uber and General Motors (Wednesday), and Walt Disney on Thursday.


  • Gold is up, trading around $1,820/ounce. The shiny yellow metal is having a tough 2021.
  • The dollar is up after a big drop on Friday.
  • Crude is up again, with Brent trading at a 12-month high, above $60/barrel.
  • Bitcoin topped $40,000 this weekend, before retreating to $39,200 this morning. Meanwhile, Dogecoin hit a record overnight after Elon Musk tweeted, “who let the Doge out.”


On satire, stonks and Wilde rides

You know things are not quite right with the markets when Wall Street analysts start quoting Oscar Wilde in their investor notes.

Searching for a metaphor to sum up the recent frenzied trade in meme stonks such as GameStop, the crack Goldman Sachs equity team headed straight to the pages of Wilde’s Lady Windermere’s Fan. You may recall from that comic classic that Wilde explained the difference between a cynic—”a man who knows the price of everything, and the value of nothing”—and a sentimentalist—”a man who sees an absurd value in everything, and doesn’t know the market price of a single thing.”

In this market, the cynics would probably be your shorts. They see froth, and even misconduct, everywhere, and believe asset prices are greatly inflated. The sentimentalists are your YOLO day-traders. They see tendies, bro! Their stonks are heading ???? to the moon.

Sure enough, at its peak, GameStop was trading at 250 times 2022 estimated earnings, Goldman notes. To put that in perspective, Amazon trades at (a still lofty) 50 times 2022 estimated earnings. Hold your top hat, Algernon.

In Wilde’s day, the cynic and sentimentalist characters made for good theater. In 2021, they will make for good drama on Capitol Hill.

Next week, the House Financial Services Committee will convene a hearing to try to get to the bottom of how social media, gamification, zero-commission trading and the emergence of retail investing are influencing the markets.

In the case of GameStop, both the cynics and sentimentalists have been misbehaving. The YOLO crowd is pumping a stock that is bound to burn the next guy who piles into the trade. Their tactics feel like textbook greater fool theory at work. The cynics, meanwhile, shorted GME to heights rarely seen in the past decade—to well north of 100% of the stock’s total float. That may or may not be legal.

When the two forces collide, you get charts that look like this:

Judging by the chatter on investor message boards, in Reddit and on Twitter, day traders are already looking for the next GameStop. They may not see “absurd value” in absolutely everything, but they do see plenty of misfits that have what it takes to go on the next ???? to the moon.

The rocket fuel for these recent wild stock rides, too often, is alternative facts and misinformation. That will be a fascinating area of inquiry at next week’s hearings.

Call it the importance of being honest.



On my very first trip to Italy, in the autumn of 1998, the Italian government collapsed. I was on vacation, and learned about the constitutional crisis nearly a full day afterwards in the pages of the International Herald Tribune. (I probably only bought the paper to check the baseball box scores, and review the exchange rate.) 

Late as I was to a story unfolding under my nose, I was disappointed that the whole ordeal lacked any immediate drama. There would be no marches on Florence’s Piazza della Signoria that day, or the next. But I was also relieved my vacanza italiana wouldn’t be in the slightest way inconvenienced. There’d still be cappuccino and cornetto at the bar for breakfast, and, for lunch, plenty of pappardelle al ragù di cinghiale

Che vuoi di piú? (What more could you possibly want?)

Italians are remarkably unperturbed by government collapses. They happen a lot. Since the end of World War II, there have been 66 governments in 75 years—which averages one shiny new government every 14 or so months. The last government collapse—that of the Giuseppe Conte government—happened just last week. 

Here’s what it usually looks like:

When the prime minister loses his majority (this is Italy, the PM is always a “he”), he resigns and then tries to cobble together support from a dizzying number of parties who all have a seat inside Italy’s BIG-tent government. It’s more high school popularity contest than Hamilton v. Burr.

If the prime minister can’t find enough willing dance partners, he informs the president of the republic of his helpless unlikability. The president, always a serious old-timer, then calls in a ringer to form a caretaker government. (To avoid the tedious bits, I’ve skipped a few steps). 

Italy has had a surprising number of caretaker governments over the years. You may gasp at the notion of an unelected dude appointed to take over the government for an undetermined period, but Italians have become fairly accustomed to it. (And, if you think about it, a caretaker in place of, say, the U.S. Senate might not be the worst option every now and then.)

This time, Italy’s appointed caretaker is Mario Draghi, a figure better known to the outside world than just about anybody in the Italian government not named Silvio Berlusconi. This caretaker is Super Mario. Signore Whatever it takes. That Mario Draghi.

Over the weekend, Draghi scored crucial support from the left, center and right of Italian politics. That means he could officially take over the keys to the government in the coming days. His rise to power is a story with all kinds of intrigue. Draghi is an adept economist who’s been called on to get the bel paese out of all manner of crises over the years, usually by selling assets to get the country out of some financial hole. But this time Job One is to figure out how best to spend money, namely, €200 billion in EU recovery funds. 

In this way, it’s a very different Italian crisis, one that’s wholly unfamiliar to a lot of us around here.

Whatever happens, Italians will still be able to find a fabulous cappuccino and cornetto for breakfast. Whether or not their favorite local bar is still in business is another question entirely.


Have a nice day, everyone. I’ll see you here tomorrow… Until then, there’s more news below.

Bernhard Warner

As always, you can write to or reply to this email with suggestions and feedback.

Correction: An earlier version of Bull Sheet wrongly stated the size of the latest U.S. stimulus package. It is $1.9 trillion.


Coinbase’s near-term outlook is ‘still grim’, JPMorgan says, while BofA is more positive about firm’s ability to face crypto winter



Coinbase's near-term outlook is 'still grim', JPMorgan says, while BofA is more positive about firm's ability to face crypto winter

Coinbase is well positioned to successfully navigate this crypto winter and take market share, Bank of America said in a research report Tuesday. It maintained its buy recommendation following the exchange’s second-quarter results.

The results warrant “a muted stock reaction,” the report said. Net revenue of $803 million was below the bank’s and consensus estimates, while its adjusted $151 million loss before interest, tax, depreciation and amortization was better than the street expected. Importantly, the company remains “cautiously optimistic” it can reach its goal of no more than $500 million of adjusted EBITDA loss for the full year, the report added.

Coinbase shares fell almost 8% in premarket trading to $80.74.

Bank of America notes that Coinbase had no counterparty exposure to the crypto insolvencies witnessed in the second quarter. The company also has a “history of no credit losses from financing activities, holds customer assets 1:1, and any lending activity of customer crypto is at the discretion of the customer, with 100%+ collateral required.” These rigorous risk-management practices will be a “positive long-term differentiator” for the stock, the bank said.

JPMorgan said Coinbase had endured another challenging quarter, while noting some positives.

Trading volume and revenue were down materially. Subscription revenue was also lower, but would have been much worse were it not for higher interest rates, it said in a research report Wednesday.

The company is taking steps on expense management, and in addition to the June headcount reductions, is scaling back marketing and pausing some product investments, the note said.

The bank says the company’s near-term outlook is “still grim,” noting that the exchange expects a continued decline in 3Q 2022 monthly transacting users (MTUs) and trading volumes, but says Coinbase could take more “cost actions” if crypto prices fall further.

JPMorgan is less optimistic than Bank of America about the company in the near term, saying pressure on revenue from falling crypto markets will have a negative impact on the stock price. Still, it sees positives including higher interest rates, from which the firm will generate revenue. It also sees opportunities for the exchange to grow its user base, leveraging almost $6 billion of cash. The surge in crypto prices in July, and the forthcoming Ethereum Merge are also seen as positive catalysts, it added.

The bank maintained its neutral rating on the stock and raised its price target to $64 from $61.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

Continue Reading


Elon Musk sold $6.9B in Tesla stock in case he’s forced to buy Twitter



Elon Musk sold $6.9B in Tesla stock in case he's forced to buy Twitter

Elon Musk sold $6.9 billion of his shares in Tesla Inc., the billionaire’s biggest sale on record, saying he needed cash in case he is forced to go ahead with his aborted deal to buy Twitter Inc.

“In the (hopefully unlikely) event that Twitter forces this deal to close *and* some equity partners don’t come through, it is important to avoid an emergency sale of Tesla stock,” Musk tweeted late Tuesday after the sales were disclosed in a series of regulatory filings. 

Asked by followers if he was done selling and would buy Tesla stock again if the $44 billion deal doesn’t close, Musk responded: “Yes.”

Tesla’s chief executive officer offloaded about 7.92 million shares on Aug. 5, according to the new filings. The sale comes just four months after the world’s richest person said he had no further plans to sell Tesla shares after disposing of $8.5 billion of stock in the wake of his initial offer to buy Twitter.  

Musk last month said he was terminating the agreement to buy the social network where he has more than 102 million followers and take it private, claiming the company has made “misleading representations” over the number of spam bots on the service. Twitter has since sued to force Musk to consummate the deal, and a trial in the Delaware Chancery Court has been set for October. 

In May, Musk dropped plans to partially fund the purchase with a margin loan tied to his Tesla stake and increased the size of the equity component of the deal to $33.5 billion. He had previously announced that he secured $7.1 billion of equity commitments from investors including billionaire Larry Ellison, Sequoia Capital, and Binance. 

“I’ll put the odds at 75% that he’s buying Twitter. I’m shocked,” said Gene Munster, a former technology analyst who’s now a managing partner at venture-capital firm Loup Ventures. “This is going to be a headwind for Tesla in the near term. In the long term, all that matters is deliveries and gross margin.”

At the weekend, Musk tweeted that if Twitter provided its method of sampling accounts to determine the number of bots and how they are confirmed to be real, “the deal should proceed on original terms.” 

Musk, 51, has now sold around $32 billion worth of stock in Tesla over the past 10 months. The disposals started in November after Musk, a prolific Twitter user, polled users of the platform on whether he should trim his stake. The purpose of the latest sales wasn’t immediately clear.  

Tesla shares have risen about 35% from recent lows reached in May, though are still down about 20% this year. 

With a $250.2 billion fortune, Musk is the world’s richest person, according to the Bloomberg Billionaires Index, but his wealth has fallen around $20 billion this year as Tesla shares declined.    

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

Continue Reading


The rent is too d*mn high for Gen Z: Younger generations are ‘squeezed the most’ by higher rents, BofA says



The rent is too d*mn high for Gen Z: Younger generations are 'squeezed the most' by higher rents, BofA says

Most of Gen Z is too young to remember the 2010 New York gubernatorial candidate Jimmy McMillan.

But over a decade later, they would probably agree with his signature issue (and catchphrase): the rent is too damn high.

This July, median rent payments were 7.4% higher than during the same period last year, according to a Bank of America report released Tuesday. 

The national median price for a one-bedroom apartment has been hitting new highs nearly every month this summer. It was $1,450 for July, according to rental platform Zumper. In the country’s largest city, New York, average rent exceeded a shocking $5,000 a month for the first time ever in June. 

But inflation in the rental market hasn’t hit each generation equally, and no one is getting squeezed harder by the higher monthly payments as Gen Z. Those born after 1996 have seen their median rent payment go up 16% since last July, compared to just a 3% increase for Baby Boomers, BofA internal data shows. 
“Younger consumers are getting squeezed the most by higher rent inflation,” BofA wrote.

The great rent comeback

Early in the pandemic, landlords slashed rents and gave significant COVID discounts to entice tenants to stay instead of leaving urban areas. Once those deals started expiring in 2021, many landlords suddenly raised payments once again, sometimes asking for over double their pandemic value. 

Young people across the board have been hit hard, and rent burdens compared to age can be seen even within a single generation. Younger millennials had their median rent payment grow 11% from last year, while the median payment for older millennials rose 7%. Gen X experienced a 5% median rent increase, according to BofA. 

It’s not a surprise, then, that Gen Z feels so strapped for cash. The majority of young people, 61%, said they want to receive their wages daily instead of twice a week, a practice typically reserved for workers living paycheck to paycheck, according to a report from the Center for Generational Kinetics, which specializes in research across the generations. Rising rent inflation has even priced nearly a third of Gen Zers out of the apartment search altogether. Around 29% of them have resorted to living at home as a “long-term housing solution,” according to a June survey from personal finance company Credit Karma.

It’s no wonder—the rent really is too high.

Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.

Continue Reading

Copyright © 2021 Seminole Press.