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Jerome Powell’s Up For Round Two ✌️

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Good evening, folks. Welcome back to the market of stocks. 🎲

Three of the four major indexes began the week on a losing note. The Nasdaq set a new record intraday high, but reversed and closed 1.26% lower. The Russell 2000 finished negative for a fourth straight session. The Dow increased 0.05%.

Longeveron Inc shares erupted 181.16% to register a new all-time high. 🌋 $LGVN appreciated 195% last week after Lomecel-B, its heart defect drug, was granted rare pediatric disease (RPD) designation by the FDA.

Energy ETF $XLE recovered 1.77% as the strongest sector. Is this a dead cat bounce? Or is the strength restored?? Time will tell…

Financials flew 1.41% as the only other sector to gain more than 1% alongside energy. Communication services dropped 1.22% to its lowest price since Jun 18. 

Crypto got crippled. 👎 Bitcoin faltered 6% to $56,200 and Ethereum cracked 4.5% to $4,070.

President Biden nominated Jerome Powell for his second term as chairman of the Federal Reserve. 🇺🇸 More on this below.

$AVYA ascended 22.36%, $VG vaulted 27%, and $EGLD.X extended 12.5%.

Here are the closing prices: 

S&P 500 4,682 -0.32%
Nasdaq 15,854 -1.26%
Russell 2000 2,331 -0.50%
Dow Jones 35,619 +0.05%

Policy

Jerome Powell Gets Ready for Round 2 ✌️

Jerome Powell Gets Ready for Round 2 ✌️ Featured Image

Many breathed a sigh of relief today as Joe Biden reappointed Federal Reserve Chair Jerome Powell to his second term at the central bank. In addition to Powell, President Biden will also nominate Fed governor Lael Brainard to vice chairwoman of the board of governors.

During a time of high inflation, a supply chain disaster, and post-pandemic economic recovery, President Biden’s appointment of Jerome Powell indicates his administration’s desire to maintain stability. President Biden shared:

Put directly: at this moment both of enormous potential and enormous uncertainty for our economy, we need stability and independence at the Federal Reserve. Jay has proven the independence that I value in a Fed chair.”

Jerome Powell has bipartisan support in the Senate, although he is opposed by some prominent progressive leaders (like Elizabeth Warren.) As the Biden administration pushes an agenda focused on social spending and climate change, Powell’s bipartisan support could be beneficial for President Biden.

For now, Powell’s nomination is an indication that easy monetary policy (low interest rates and cheaper borrowing) could continue as the Fed maintains its position on inflation and interest rates. However, the economy of Fed Chairman Powell’s latest term looks very different from his first… 📉



Crypto

The First Bitcoin City 🌋

The First Bitcoin City 🌋 Featured Image

El Salvador, the only country in the world to make Bitcoin legal tender, is going to build an entire city using the cryptocurrency. The so-called “Bitcoin City” will be built near the Conchagua volcano in the country’s southeastern part. 🌋 🤑

President Nayib Bukele shared this latest development at a Bitcoin event on Saturday. Bukele said the government plans to build a power plant near the volcano to supply energy to both the city and Bitcoin mining. 🤭 The city will have residential and commercial areas, services, entertainment, restaurants, and an airport. 

According to Bukele, an enormous Bitcoin symbol will be located in the center of the city, which will be laid out in the shape of a circle. The Bitcoin city will have no income, property, capital gains, or payroll taxes. 🚨 🚨

On top of that, the Central American country will also issue a $1 billion bitcoin bond, a tokenized financial instrument developed by Blockstream on the Liquid Network. The bond will create a securities law, granting Bitfinex Securities a license to process issuances. $500 million of those funds will be used to build energy infrastructure and Bitcoin mining equipment, while $500 million will be used to buy more Bitcoin. The market price of Bitcoin sits around $56,000 — just under 2,000 bitcoins.

President Bukele has always been pro-Bitcoin. El Salvador made Bitcoin legal tender and launched a Bitcoin wallet earlier this year. However, not everyone in the country is a fan of crypto… some El Salvadoran citizens protested Bukele’s decision earlier this year, calling him a dictator.


IPOs

IPO Weakness

IPO Weakness Featured Image

Recent IPOs had their fun in the sun in November. But could today’s pullback be a sign of weakness to come?? 💭 Here are a few charts. We’ll let you pick the verdict… 

Roblox opened 4.5% above Friday’s close today, but erased those gains quickly. $RBLX finished Monday down 10.76%, but still trades above $100 at $120.21. 

Rivian sank 8.16% today after the company and Ford Motors canceled their collaboration to build an electric car. 

Portillo’s plummeted 7.31% to begin the new trading week. 📉 $PTLO is now 23.5% off its high close from Nov 17.

Sweetgreen got off to a bitter start. $SG slipped 16.26% to close at its lowest price ever.


M&A

Monday’s M&A

Monday’s M&A Featured Image

Monday was a busy day in the world of M&A. 🥵

It was announced that Netflix will acquire the Canada-based special effects firm Scanline VFX. Scanline VFX is responsible for ‘Stranger Things,’ ‘Game of Thrones,’ and ‘Justice League.’ The move comes as Netflix’s expands its horizons in an effort to keep up with the competition. Netflix also recently purchased the ‘Roald Dahl Story Co,’ and branched into video games. $NFLX closed down 2.89%.

Meanwhile, the NYC-based hedge fund Alden Global Capital LLC proposed a $141 million deal to take Lee Enterprises private. Lee Enterprises Inc. is an Iowa-based media company with involvement in 77 U.S. markets — the company owns Tucson’s Arizona Daily Star, the St.Louis Post Dispatch, and other publications. This is Alden Global’s third huge acquisition in 2021. $LEE gained 26.83%. 

The Swedish telecommunications company Ericsson just closed its biggest deal ever today. Ericsson will pay $21/share to buy the cloud-based communications provider Vonage Holdings Corp. The whole deal values Vonage at a whopping $6.2 billion. The cloud-communications software market is hot across the globe. 🌎 🔥 📞 $ERIC lost 7.14%. 

In similar news, Authentic Brands Group LLC (the name behind Brooks Brothers, Eddie Bauer, and Sports Illustrated) announced a decision to delay its IPO today after closing a massive $2.7 billion deal with CVC Capital Partners and HPS Investment Partners.