Recap Rap - August 2021
In this edition of 'The Recap Rap', we're covering everything from calling Rihanna the capital B-word to Robinhood's wild first week of trading.
Welcome to the Recap Rap
For relevant news and facts set to lyrical raps
This will only take a minute so sit back and relax
As we reflect on what has happened in the weeks that have passed
For a more complete breakdown of the topics discussed in this week’s Recap Rap, check the summaries below:
The Jobs Report
The jobs report is an economic gauge that helps economists/investors understand what’s going on in the labor market. The logic is: if more companies are hiring, the economy is growing and doing well. It’s been a closely watched metric ever since the pandemic began. Friday’s report showed U.S. employers in July added jobs at the best pace in nearly a year and the unemployment rate fell sharply.
Markets at All-Time Highs
With economic indicators (aka jobs report ^) continuing to point to an economy that is recovering strongly from the pandemic, the S&P 500 and Dow Jones Industrial Average reached all-time highs on Friday.
https://www.cnbc.com/2021/08/05/stock-market-futures-open-to-close-news.html
Crypto on the Rise, Makes me Wanna Bounce (IYKYK)
Crypto is a ride that never ends. Highs. Lows. 50% swings. It’s just what you sign up for when you invest in the space. Two major currencies - Bitcoin and Ethereum - are making headlines once again as they are seeing solid rebounds on the back of what’s been a period of price declines. Over the past month, Bitcoin is up 35%+ and Ethereum is up 47%+ (as of Aug 7th). Major topics being discussed in the space today are:
The Infrastructure Bill: In short, the Government wants better tax enforcement on digital assets to help support the $$$ needed for the Infrastructure Bill. But crypto enthusiasts are pushing back (of course) for some pretty valid reasons. https://techcrunch.com/2021/08/06/crypto-biden-amendment-infrastructure-bill-proof-of-work/
The SEC: The SEC (Securities and Exchange Commission) isn’t playing around anymore when it comes to Crypto (neither is the IRS for that matter). They are stepping in to better regulate the space as well as crackdown on businesses that are defrauding investors. They recently brought charges against two Florida men for fraudulent activity (clap, clap, clap!)
Go For Gold
Let’s just say…the US crushed it.
Putting in that Work Work Work Work Work
Now I’m obviously biased, but I love to see musical artists get the bag. We all know Rihanna for her music, but probably less so for her makeup and lingerie brands. Combined, they have not only made Rihanna a billionaire but the richest female musician in the world…
Goldman Joins the Club
Investment Banking is synonymous with ‘the grind’. Sure the pay is great, but the hours are brutal. 100 hour work weeks; working through the weekend; constantly on call. It’s a rough gig. Investment Bankers reported being especially overworked during the height of the pandemic, and many either left their jobs or cited real problems with stress and mental health. The result? Banks across The Street have been raising pay and other non-compensation-related initiatives to retain and attract talent. The latest update - Goldman is paying first-year analysts in Investment Banking $110,000, before bonuses.
Jefferies also came out this week saying they are matching Goldman’s starting offer of $110,000 for new hires.
Play Your (Vaccine) Cards Right
With Delta making its rounds and infection numbers spiking again, new policies are being put in place to curb the spread. The latest? NYC will require workers and customers to show proof of at least one dose of the vaccine for indoor dining and other activities.
https://www.nytimes.com/2021/08/03/nyregion/nyc-vaccine-mandate.html
China Markets Take a Hit
Despite its growing economy, investors remain wary of investing in China due to regulatory uncertainty (think back to their blocking of Alibaba’s IPO). China recently banned education companies from operating for-profit and even more recently took aim at the gaming industry, describing video games as ‘spiritual opium’. Both events led Chinese shares to significant declines.
https://techcrunch.com/2021/08/07/china-roundup-game-algorithm-crackdown/
What’s Under the HOOD
No need for an intro here. We all are familiar with Robinhood. The company went public at the end of July and in typical meme stock fashion, it’s been on a wild ride ever since. But will it prove to be a good company in the long run?
Here’s a snippet from GRIT Capital’s Newsletter (highly recommend a follow)
GRIT’S TAKE: The average Robinhood account holds $4.5k. That’s a low number as is, but they’re also having trouble retaining those accounts as they grow bigger. According to Wolfe Research analyst Steven Chubak, in Q1, users who left Robinhood for another brokerage took an average account value of +$20k with them.
It’s also never a good sign when an analyst who initiates coverage on a stock labels it ‘uninvestable’ and titles their report “Do Not YOLO This Stock”!
GRIT’S ACTION: Still not interested.
Here’s a look at the while price ride over the past week or so…
https://news.yahoo.com/robinohood-opens-14-higher-after-wild-trading-week-140828061.html