Greetings, everyone! This tumultuous week on Wall Street has finally come to an end. Bottoms up!! 🍻
It was a quiet day for stocks – all four indexes traded within yesterday’s range.
The S&P 500 gained 0.15% and closed the week near highs. Here’s the weekly chart:
Bitcoin rolled over 5.15% and surrendered most of its Wednesday and Thursday gains.
Snap spiked 4.71% to close at all-time highs. 👻 $SNAP is up 66% YTD.
Tesla tore it up – $TSLA gained 2.75% to close at its highest price in seven months. Is $800 up next?? ⚡
Meredith Corp marched 25.4% following reports that the company could be acquired by InterActiveCorp for more than $2.5 billion. 💰
Here are the final prices:
Carnival Sails To Recovery
Things are looking up for Carnival Cruise Line (the largest cruise line in the world) as the company reported its Q3 2021 earnings today. 🛳️ 🌊
While Carnival posted an adjusted net loss of over $2 billion, cruises for the quarter were cash flow positive. ✅ Carnival expects that to continue, and while the cruise line floats back to its pre-COVID greatness, the company is sitting on more than $7.8 billion of liquidity.
But wait, there’s more. Carnival also reported that “cumulative advanced bookings for the second half of 2022 are ahead of a very strong 2019.” In other words, Carnival’s second half of 2022 has “historically high [booking numbers],” an indication that the company is getting into calmer waters.
Carnival’s success shows “more good is yet to come” for cruise companies and the greater travel industry. Airlines, cruise lines, and rental car companies have all seen a steady stream of positive news and upgrades from analysts in the last few months as the pandemic’s core effects have waned. 🤞
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China Bans Crypto (again)
In a major blow to the crypto ecosystem, China announced that all transactions of cryptocurrencies are now illegal. The country vowed to clamp down on illicit activities involving digital currencies. Basically, this means China does not recognize cryptos like $BTC.X and $ETH.X as legal tender.
To underscore its position, The People’s Bank of China published a list of forbidden activities involving digital assets. 💀 For example, overseas crypto exchanges will be blocked from providing services to Chinese residents through the internet. China’s highest state-planning body, the NDRC, posted a separate statement on “Rectifying Virtual Currency Mining” — the statement explains that the country will not authorize permits for new crypto mining projects and existing ones will shut down.
According to the notice, banning new virtual currency mining projects will be regarded as a criterion for assessing government performance in saving energy. These announcements are the latest in a series of strict measures from China on cryptocurrencies. The news added another big blow to the already-wounded crypto market, which was trying to recover from Evergrande’s impact.
IAC Bids On Magazine Empire 👑
Another day, more M&A. The American holding company IAC is in talks to acquire Meredith, the publishing empire behind People Magazine and Better Homes & Garden. The deal is expected to be valued at more than $2.5 billion. 💰
IAC is a big player in the media and tech space. It’s most synonymous with two recent spinoffs: video sharing site Vimeo and dating company Match Group, which owns the majority of U.S. dating apps. IAC has also boasted Expedia, Ticketmaster, and LendingTree among its portfolio companies.
Today, IAC owns a portfolio of other brands like Investopedia, HomeAdvisor, Ask.com, and Angie’s List. However, IAC could use some bulk after shedding its two most-successful businesses. In that sense, Meredith would be a huge pickup for IAC, which would benefit from the portfolio expansion (and all its revenue, of course.) 👏
A deal is not a certainty at this point, but it’s no secret that Meredith is looking for a buyer. The news sent shares of the media conglomerate climbing in after-hours yesterday, up 18.3%. 🚀
$IAC stock was up 3.01% yesterday.
Biden’s Bold Billionaire Tax Plan 💸
President Biden announced that he would support a proposal to tax billionaires for appreciation on their investments. The proposal, put forward by Senate Finance Committee Chairman Ron Wyden, is a novel and controversial way of preventing the ultra-rich from avoiding hefty tax bills. ❌
Biden emphasized that the bill wasn’t specifically intended to bolster the administration’s new $3.5 trillion ‘infrastructure’ bill, but to send a message to billionaires telling them to “pay [their] fair share.”
The proposal has not been added to the House tax plan, but it already faces political challenges from moderate Democrats like Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), who would join nearly every Republican in opposition.
Taxing billionaires on unrealized gains is aspirational for left-leaning Democrats considering the rapid increase of wealth that billionaires have enjoyed during the pandemic. However, detractors say that the proposal (which is known as “mark-to-market“) would be unnecessarily difficult to track and report.
The plan is one among many other controversial amendments to the tax code. Among the most imaginative are amendments to the estate-tax, raising capital gains taxes, and a plan to raise the corporate tax rate back to a higher level (it was lowered during the Trump administration).
All things considered, it’s likely we’ll see changes to the tax code. Maybe they could start by funneling some of that cash into some resources for IRS customer support? 😂
A Housing Market Recap 🏡
Housing’s hot, everybody knows that. 🏡 🔥 But could the COVID housing market madness have run its course??
US home sales fell last month as supply stayed low; existing home sales fell 2% to an annual rate of 5.88 million units. Home sales were down throughout all regions in the US, but sales were down most in the South (-3.0%).
Last month, single-family home sales dropped 1.9% and condo sales fell 2.8%. Home resales tumbled 1.5% YoY. Prices are still up for the time being, though — the median housing price is up 14.9% YoY, and the number of first-time homebuyers is dwindling. Housing inventories have tumbled 13.4% YoY.
“The recent moderation in existing home sales reflects some easing of the buying frenzy that carried over into early 2021,” according to senior economist Mark Vitner at Wells Fargo. Conrad DeQuadros, senior economic advisor at Brean Capital, commented:
“There is a suggestion here in the moderation of price gains and sales, and a declining share of first-time buyers, that a considerable portion of the stock adjustment of demand for homes to low rates and pandemic-driven population moves has taken place.”
With a slow in year-over-year sales, maybe a return to normalcy for the US housing market is on the horizon? 🤔 Time will tell.