Roller Coasters and Negative Mortgage Rates…

Here’s the weekly rundown – July 19-23, 2021

Weekly Summary:

Like roller coasters? That’s certainly the approach markets took to this week, starting Monday off with massive selloffs in the Dow (down 700 points) and the S&P 500 (down nearly 70). Yet the gut checking drop took a rocket back towards space kind of the way billionaire Bezos did on Blue Origin this week (second billionaire in space ?).

The initial drop likely came from a combination of the market absorbing more “delta variant” talking points from the media, the largest inflation numbers the U.S. has seen in 13 years (reported prior week), and general wonder about the economy going into the second half of the year. Taken together, it looked like a good time for traders to grab profits which they likely did.

So why’d the market take the rocketship back up to end the week higher? The biggest driver, better than expected earnings from many of the major players in the market – twitter for example reported 20¢/share earnings where only 7¢/share was expected, that’s a 180% beat. As just one instance of solid earnings, overall, investors took these earnings as a sign that 1.) the economic fears can be put on chill for a second 2.) companies that once looked expensive are actually fairly valued for what they’re earning.

Negative Mortgage Rates – Why housing isn’t slowing

As to the negative mortgage rates we threw in the headline…we’ll address this more directly next week but here’s the premise.

Inflation currently is 5.5% and the national average rate for 30-year mortgages is 2.65%…

The Major Headlines:

? Electric-Vehicle Sales Growth Outpaces Broader Auto Industry – WSJ

Electric cars are coming, whether by natural demand from a younger generation looking for trendy tech-focused cars or by the establishment auto companies making an all-out bet on electric. Regardless, the first half of 2021 has been especially booming for electric vehicle sales, up 29% overall -led by Tesla. *Key research area is electric charging infrastructure.

? Nasdaq to Spin Out Market for Pre-IPO Shares – WSJ

Want to buy shares of companies before they go public? We may be one step closer but not yet there for regular non-accredited investors. Nasdaq is spinning off its current marketplace for shares of private companies into Nasdaq Private Markets. Pre-IPO companies may have employees that wish to sell shares they receive as compensation, without the public market this is a hard task, the private marketplace provides a venue for these shares to trade hands.

? Bitcoin drops back below $30,000, heads toward new low for the year – CNBC

To the moon or….to a 50% loss, at least for those who bought bitcoin around April. Bitcoin and many other cryptocurrencies have taken a beating of recently as governments start to become more stringent on them.

? The Milwaukee Bucks Win the NBA Championship – WSJ

Milwaukee Bucks top the Phoenix Suns 105 – 98 to win their first NBA Championship in 50 years.

*Key research areas are broad categories we have a general interest in researching for specific investment. This should not be taken as a recommendation. We only release companies we like in our premium newsletter.

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