Connect with us


Here’s what’s driving global stocks to new all-time highs



Here's what's driving global stocks to new all-time highs

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.

Happy Friday, Bull Sheeters. It’s a risk-on day as investors seek to extend the weeklong rally. Broad-based gains in tech, autos and pharma are pushing global equities ever closer to an all-time high. U.S. stocks hit that milestone yesterday.

On the calendar today is a big payrolls report. Elsewhere, investors are paying close attention to the pace of vaccinations, rewarding those countries that emerge as the early leaders.

Let’s see where investors are putting their money.

Markets update


  • The major Asia indexes are mostly higher, with Japan’s Nikkei up 1.5%.
  • It’s IPO day for TikTok rival Kuaishou, and investors have plenty of reason to post to the platform celebratory video snippets. The stock surged 200% at the open in Hong Kong.
  • Nickel-rich Indonesia has been courting Tesla for some time to invest in the country. According to CNBC, the EV maker is finally listening, a development of particular interest to those following the race to find a cheaper, more plentiful raw material to go into electric batteries.


  • The European bourses were up modestly out of the gates. The Stoxx Europe 600 was 0.3% higher at the open.
  • Daimler shares closed up 2% on Thursday after the German automaker said it will split the company into two parts: the flagship Mercedes-Benz car division and Freightliner, the maker of big rigs.
  • Regulators from Brussels to Beijing still need to sign off on Nvidia’s $40 billion takeover of chip giant Arm. It all adds up to one of the most scrutinized deals in recent memory.


  • The U.S. futures point to another strong open. Yesterday, the S&P 500 closed at an all-time high as stimulus talks and slightly improved jobless claims data lifted investors’ spirits.
  • Shares in Ford are up 1% in pre-market trading after the carmaker said it will invest a combined $29 billion on EV and autonomous vehicles through 2025. Alas, a chips shortage is denting its 2021 outlook.
  • In “closing the barn door” news: Now that GameStop has bombed more than 80% this week, and AMC Entertainment is off more than 50%, Robinhood has lifted all restrictions and limitations on trading in the stocks. Go get ’em, day traders!


  • Gold has had an awful week. It’s trading below $1,800, down 2.7% in the past seven days.
  • The dollar is flat, but it’s had a heckuva week.
  • Crude is higher, with Brent trading just below $60/barrel.
  • Bitcoin is down 1.2% at 10 a.m. Rome time, trading around $37,750.


By the numbers


All eyes will be on today’s jobs report before the bell. Economists estimate the U.S. economy added 100,000 jobs in January. A reminder: December’s report was brutal with 140,000 jobs lost in the month. Why is this report such an important bellwether? Because, as USB chief economist Paul Donovan points out, the U.S. labor market appears to be stalling out. That’s puzzling and frustrating considering the amount of helicopter money Washington has dumped on the economy in recent quarters. So here’s what to look for in today’s report: “Structural issues will affect unemployment,” Donovan begins. “The negative is long-term unemployment is increasing in dying industries. The positive is employment data may underestimate the boom in business start-ups… Quarantining may be preventing workers from working. Some sectors have reported labor shortages. This is likely to show up in overtime and earnings data.” In other words, don’t get distracted by the headline unemployment rate. The bigger story can be found in poring over the data to see which industries are growing, and which aren’t.

$24 billion

Is the GameStop rally well and truly over? The diehards on WallStreetBets would tell you, No way! They continue to counsel their peers to hold the line. But enthusiasm is fading. The stock crashed by 42% yesterday, bringing its market cap to below $4 billion. A week ago, when the stock was trading above 400 bucks, it was the most valuable stock on the Russell 3000. That trade unwinded fast, and in spectacularly damaging fashion. Investors have wiped $24 billion from its market cap in just five trading sessions. I dearly hope the YOLO traders will have learned a lesson from this adventure in day trading.

10 million+

Let’s give credit to our friends in the United Kingdom. Britain has delivered at least one dose of the COVID-19 vaccine to 10 million residents, and that’s exciting investors. The pound sterling has soared and investors have poured into U.K. bonds as the country leads the way in the all-important vaccination leader board. The success gives rise to the question: should you be investing in countries that are doing a good job vaccinating the population, the ultimate recovery play? Here’s what a successful vaccination campaign looks like: infections go down as vaccinations go up. This chart is courtesy of Berenberg Bank:


Have a nice weekend, everyone… But first, there’s more news below.

Bernhard Warner

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


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.