CPI Season!

Inflation continued its pandemic-era rise, pushing stocks south today. The Consumer Price Index (CPI) for January 2021 rose 0.6%. The CPI comes to 7.5% YoY, the fastest since 1982.

Fuel oil was the fastest-growing product in the CPI-U, up 9.5% in the month of January. Electricity prices were also up 4.2% in the month. Most energy products have seen unfettered amounts of inflation during the pandemic, due in-part because of robust pricing on petroleum and natural gas commodities. 📈

Used cars continued their inflation-era rise, now up more than 40% YoY. Most other goods such as food, medical care, apparel, and shelter are far below those figures, closer to 0% than to 40%. That’s how the sky-high energy inflation costs balance out with all other items. You can get into the nitty gritty on the BLS website. ⚡

The news sent treasury yields rising, and the Fed’s nerves rose with them. 😡 The Fed is faced with a decision regarding its first rate raise in March. The Federal Reserve is debating the expected 0.25% increase or a more aggressive hike.

A bigger hike is looking like the more probable option — at least in the eyes of investors. The markets priced a 100% probability of a 50bp (0.5%) hike in March. The President of the Federal Reserve Bank of St. Louis also indicated that he would support raising rates by a full percentage point by July. As it stands, the Fed Funds Rate is currently set from 0-0.25% — so that might not be hard to do.

Binance has invested $200 million into Forbes, a century-old U.S. business news publisher, ahead of the company’s SPAC merger with Magnum Opus Acquisition. 💰 💰

The crypto exchange, which is worth $86 billion, will become Forbes’ second biggest shareholder. Binance will also reportedly pick up two of Forbes’ nine board seats in the process. It’s an ironic buy, given that Binance sued Forbes in 2020 after they published a story suggesting the crypto exchange skirted U.S. regulations. 

Binance was able to swoop in and make the investment because many institutional investors “decommitted” funds thanks to the SPAC. According to CNBC, sources say that Binance will replace half of the $400 millions in commitments.

The company is expected to have a post-merger value of more than $630 million. This news follows a flurry of media SPACs which have come to market, many to lackluster success. 👎 The deal is expected to close this quarter. Magnum Opus Acquisition was led by former Point72 executive Jonathan Lin.

Binance’s CEO, Changpeng Zhao, stressed that Binance will not influence editorial decisions or content. However, the company said it would help the publisher with crypto and blockchain strategies, as well as with Forbes’ understanding the world of web3. 🌎

The SPAC, which trades under $OPA, fell 0.1% today.

Affirm — the company which provides short-term, low-interest loans to customers of companies ordering goods online — reported earnings, and, well… it didn’t go very well. The buy-now-pay-later giant $AFRM plunged 21.45% in today’s session. 💩

EPS: $0.57/share 
Revenue: $361 million, +77% YoY (compared to $328.8 million expected)

Affirm accidentally announced its earnings early in a tweet which has since been deleted. The tweet said that Affirm’s sales increased by 77% and that the company would beat revenue expectations, which was correct.

The company’s CEO, Max Levchin, shared: “We more than doubled gross merchandise volume year over year. Over the last 12 months, we have added nearly seven million active consumers to our network, while enabling 168,000 merchant partners to better serve their customers.” 

Affirm shares surged immediately after the tweet, but have since plunged 21%. The tweet claimed “Another great quarter is in the books as we accelerated our growth,” followed by several figures emphasizing the company’s growth. The company leaked reduced guidance in the tweet, which prompted the selloff of its stock. 

After removing its tweet, Affirm officially posted “Due to human error, a small portion of Affirm’s fiscal Q2 results were inadvertently tweeted from Affirm’s official Twitter account earlier today.” Ooof. 😅

$AFRM is down 1.18% in afterhours.