Markets were on the uptick last week, as the S&P 500 (GSPC), the Dow Jones Industrial Average (DJI), and Nasdaq (IXIC) gained 1.2%, 1%, and 1.7% respectively. The indexes are all in slightly positive territory so far in 2021 after having rallied tumultuously last year. These major indexes notched a second week of gains and reached record highs, seemingly helped by the accelerating rollout of coronavirus vaccines and declining case trends. Communication services stocks outperformed in the S&P 500 Index, boosted by solid gains in Twitter (TWTR) and video gaming shares.
The week also brought the last major wave of Q4 earnings reports, with 82 of the S&P 500 companies scheduled to report results. Analysts are expecting overall earnings for the S&P 500 to have grown slightly, recovering exceptionally quickly compared with past recessions. An uptick in overnight demand from Asia ahead of the Lunar New Year supported the investment-grade corporate bond market early in the week, with the market seeing healthy trading volumes and balanced flows, and primary issuance falling short of weekly expectations.
Markets in the U.S. are closed on Monday for Presidents’ Day, but stocks were on the rise despite the upcoming holiday. The prospects of a big government spending program could continue to boost the stock market and put upward pressure on interest rates in the week ahead.
Bumble stock surges 64% in market debut; Tinder parent Match Group acquires South Korean social media firm HyperConnect
Online dating app Bumble (BMBL) jumped 64% in it’s first day of trading on Thursday amid widespread interest in matchmaking apps and new public offerings. The company now values at around $13 billion, closing at over $75 on Friday. Meanwhile, Tinder parent Match Group Inc. (MTCH) jumped over 20% last Thursday, reaching an all time intraday trading high, after announcing news of acquiring South Korean social media firm HyperConnect for $1.73 billion.
Snap Summary
Bumble is a one of its kind matchmaking company which revolutionized the online dating dynamics by having a system where the woman makes the first move. Among other unique features, Bumble also has a ‘BFF’ and ‘Bizz’ section which allows users to search for people looking for friendships and for business connections. Tinder on the other hand, surged due its footing into ‘social discovery’, not just dating, after announcing the acquisition. Other reasons for the surge involve a heated competition with Bumble, who’s IPO has caused a heavy influx in Tinder as well. The stock is up by around 126% in the past year.
Global Shortage in Semiconductors Turns Market Bullish
VanEck Vectors Semiconductor ETF (SMH) showed +17% YTD gains outpacing the broader technology sector ETF (XLK) over the past 6 months. SMH closed above its 50-week Bollinger Band for 15 straight weeks, displaying an outstanding bull run. It tracks a market-cap weighted index of 25 of the largest U.S.-listed semiconductor companies.
Snap Summary
The next big retail buying frenzy comes after the recent surge in demand for semiconductors post the coronavirus pandemic. Chip shortage has affected major players across industries including General Motors (GM), Ford (F), Sony’s (SNE) launch for its latest PlayStation console as well as the Solar company Enphase (ENPH). President Biden has recently committed to signing an executive order directing a government-wide review of the supply chain for critical goods.
Tech Giants show increasing penchant for Bitcoin
Tesla (TSLA) announces a $1.5 billion investment in bitcoin, adding yet another value asset to the company’s balance sheet. Meanwhile, Apple (AAPL) announces launch of BitPay on its Apple Wallet, having a feature in ApplePay which allows users to add a prepaid master card with bitcoin and other cryptocurrency.
Snap Summary
Tesla’s 2020 annual report revealed that it had bought $1.5 billion of the cryptocurrency and would soon accept it as a form of payment for cars, sending the price of bitcoins shooting roughly around 20% higher. The company’s expansion projects and smart investment decisions have risen its share prices by 410% in the past year. Meanwhile, Apple’s addition of BitPay causes greater traffic and influx of Bitcoin and other cryptocurrency users into Apple, amplifying reach.
