December 21, 2021

Omicron Slashes Economic Progress 🌎

Happy Tuesday… or should we say mid-week? 😊 We’re more than halfway through our shortened trading week.

The stock market bounced big time, much to the enjoyment of bulls who bought the recent dip. 🤑 If you did, congratulations. If you didn’t, well, better luck next time.

The Russell 2000 bounced the hardest, gaining 2.95% today. The Nasdaq Composite also showed out for a stellar performance, gaining a beefy 2.4%. 📈

The semiconductor industry marched north after Micron reported earnings that killed estimates and left investors with bigger expectations for future quarters. ✨ Investors can thank the +70% growth in data center sales. $MU gained another 10.55% today. Check out the chart:

Stocks weren’t alone in their northbound march — crypto recovered as well. $BTC.X popped 4.5%, $LUNA.X jumped 7%, and $AVAX.X rose 8%. The second two cryptos are now up more than 40% on the week.

Now a recap of the trending action on Stocktwits’ streams today: $BB ran away with it. The ticker was trending for most of the day after rising 4% intraday. The company reported earnings today, which seemed to please investors. 🙌

Other trending streams included $RELI (+75%), $SAVA (+18%), and $RAD (+21%.)

Let’s jump into today’s stories. Here are the closing prices:

S&P 500	4,649	+1.78%
Nasdaq	15,341	+2.40%
Russell 2000	2,203	+2.95%
Dow Jones	35,492	+1.60%

Economy

Omicron Slashes Global Outlook

Well, just when we thought we were on the road to recovery… 😪

Omicron is taking a chunk out of expected global growth. Bloomberg reported that the entire global economy is only expanding at a 0.7% rate, which is half the world’s growth rate from last quarter. Before the pandemic, the global economy grew at a 1% growth rate.

Europe’s experiencing just a 0.8% expansion of its regional economy, down 0.3% from November’s projections. The U.S. is growing at a 1.2% rate, China has stumbled down to a 4.5% rate from 4.9%, and Brazil’s economic growth rate has tumbled to 0.2%.

Not to mention, the Fed’s inflation measure is up 5% this quarter; inflation in Europe and the U.K. is 4.4% higher. 👎 Bloomberg economist Tom Orlik shared:

“As 2021 draws to an end, the global economic recovery risks being thrown off track by the omicron variant of the coronavirus. Particularly Europe looks vulnerable: Recoveries for Germany, France and Italy are increasingly under strain from the surge in cases.”

Maybe Santa Claus can save those rates for Christmas…? 🤔 🎁

M&A

P/E Firms Mull Citrix Takeout

Cloud computing and virtualization company Citrix Systems Inc. has had a rough year — $CTXS is down 28% this year, but the stock gained 13% today on the news of a potential deal.

Vista Equity Partners and Elliott Management Corp. could take Citrix private in a buyout deal, according to reports. The deal is still in early stages, but news also surfaced earlier this week that Elliott Investments bought a 10% stake in Citrix Systems. The Florida-based computing company is presently valued at $10 billion.

In addition to falling share prices, Citrix’s former CEO and president recently stepped down due to “some missteps” following an earnings call. Citrix also pursued a sale/spinoff in 2015 and in 2017, but failed to strike a deal. Citrix’s new CEO, Bob Calderoni, shared:

“We just have to reverse some of the things that we did over the last year or two and make the business more attractive. And just like a Salesforce, if you make it more attractive to sell something, you‘ll get more of it sold and it’s fixable. It might take a little bit of time before we see the uptick, but I’m pretty confident we will.”

Rumor has it that Vista Equity Partners will involve its portfolio company Tibco in the Citrix deal. In 2020, Vista sold Wrike, another one of its portfolio companies, to Citrix for $2.25 billion.

Can Citrix close the deal and recover its widening losses?? Tech deals have been the theme of this week, after all (Oracle & Cerner.) 🤖

$CTXS gained 13.63%.

Bullets

Bullets from the Day

U.S. population growth falls to record low. The United States has the wrong kind of inflation. The U.S.’s population growth increased just 0.1% in the year ending July 1, representing a continued contraction of the nation’s growth rate. The U.S. cited “decreased net international migration, decreased fertility, and increased mortality due in part to the COVID-19 pandemic.” Read more in Axios.

Covid confusion and Americans’ mixed signals. As Omicron runs rampant throughout the country, the mutation is prompting another wave of lockdowns, cancelled sporting events, and stunted global economic growth. However, Americans can’t seem to pick a response — in New York City, schools are staying open, but classrooms will be closed…? “Spider-Man: No Way Home” had a stellar weekend at the box office. Oh, and Vegas chose to host the Consumer Electronics Show, Covid or no Covid. Sooo what’s the move, exactly? Read more in CNBC.

President Biden is determined to strike a deal w/ Manchin. President Joe Biden thinks he can still reach a deal with Dem Senator Joe Manchin to get his vote in favor of the $2 trillion Build Back Better plan. “Sen. Manchin and I are going to get something done,” President Biden commented. Senator Manchin has been pretty clear in his opposition to the bill — could the two actually strike a deal?? Read more in Wall Street Journal.