Today is Thursday, November 4, 2021.
Fed’s Taper Time Might Fuel End-Of-Year Stock Surge
As expected, the Federal Reserve announced Wednesday that it will start tapering bond purchases later in November.
Background: Since the start of the pandemic, the Fed has been purchasing about $80 billion in treasury and mortgage-backed securities every month. Now that the pandemic-driven economy has changed, there have been calls for the Fed to slowly reduce these monthly purchases.
Details: The Fed said that it will reduce its monthly purchases by $15 billion in November, another $15 billion in December, and is expected to continue this for the following months. Interest rates will remain unchanged, for now.
Investment Outlook: Stocks performed well after the announcement on Wednesday. Long-term, investors are bullish that tapering could fuel an end-of-year surge. The tapering might help small-cap stocks, but it might hurt growth tech stocks.
Final Thoughts: Even with the taper, the Fed still has a big balance sheet.
Notable Earnings Today: Square (NYSE: SQ), Moderna (Nasdaq: MRNA), Airbnb (Nasdaq: ABNB), Pinterest (NYSE: PINS), Peloton Interactive (Nasdaq: PTON), Uber (NYSE: UBER), Yelp (NYSE: YELP), Barrick Gold (NYSE: GOLD), Citrix Systems (Nasdaq: CTXS), Datadog (Nasdaq: DDOG), Expedia Group (Nasdaq: EXPE), Hanesbrands (NYSE: HBI), Kellogg (NYSE: K), Nikola (Nasdaq: NKLA), Penn National Gaming (Nasdaq: PENN), Planet Fitness (NYSE: PLNT), Toyota Motor (NYSE: TM), ViacomCBS (Nasdaq: VIAC).
Notable IPOs Today: Cadre Holdings, Inc. (NYSE: CDRE), MDxHealth SA (Nasdaq: MDXH), Mainz Biomed B.V. (Nasdaq: MYNZ), NerdWallet, INC. (Nasdaq: NRDS), Evotec SE (Nasdaq: EVO), Arhaus, Inc. (Nasdaq; ARHS), Backblaze, Inc. (Nasdaq: BLZE), Lionheart III Corp Unit (Nasdaq: LIONU).
Notable Equity Crowdfunding Campaigns Ending Today: glassFROGG (Wefunder).
Notable Economic Events Today: Initial jobless claims (8:30 a.m. ET), Exports and imports (8:30 a.m. ET).
Roku Drops Due to Mixed Earnings
Shares of Roku (Nasdaq: ROKU) dropped 8.5% on Wednesday after the digital media company posted mixed results.
Numbers: Roku reported earnings per share of 48 cents, which was way better than what analysts projected. However, the company’s $680 million revenue missed expectations.
The Bad: The company reported that there were 56.4 million active accounts in the quarter, which missed expectations. And while the 18 billion streaming hours in the third quarter was better than the 17.4 billion during the second quarter, it was still slightly behind the 18.3 billion during the first quarter.
The Good: Average revenue per user increased by 50% since last year and platform revenue grew 83%. The business is still solid.
Final Thoughts: Roku experienced a lot of growth during the pandemic. Can the company make a comeback, especially with so many rivals in the market now?
3 Things to Know Before Investing in a Telehealth Company
Telehealth, which is also called telemedicine, is defined as receiving medical treatment remotely via a video communications platform.
The use of telehealth has increased dramatically since the start of the pandemic. For investors, this presents an opportunity.
Continued Adoption: While telehealth usage has dipped a bit since the onset of the pandemic in 2020, McKinsey found that utilization has stabilized at levels 38 times higher than before the pandemic.
Let’s Get Physical: Another study found that 64% of Americans want part of their annual physical conducted via telehealth, which means the practice of telehealth has gone mainstream.
Mental Check: And it’s not just physical health that is benefiting from telehealth. 35% of telehealth visits were for mental health, which is more than the next five leading drivers combined.
Final Thoughts: Telehealth is now a foundational aspect of the American healthcare system - one that investors should consider.
Trends to Watch
Advocating: US Lawmakers Call for Bitcoin Spot ETF in Letter to SEC Chair Gensler (CoinDesk)
Good Start: Allbirds shares surge 90% in eco-friendly shoe maker’s market debut (CNBC)
Things Are Changing: Etsy's Pandemic-Fueled Growth Shows Signs Of Slowing (Investor’s Business Daily)
Innovation: Coinbase is testing a subscription service with zero trading fees and prioritized support (The Block)
Travel Returns: Booking Holdings beats earnings driven as travel restrictions ease (Seeking Alpha)
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