Good for stocks. Bad for crypto.
Today is Wednesday, August 11, 2021.
Senate Passes Bipartisan Infrastructure Bill: Winners And Losers
The U.S. Senate passed a $1 trillion infrastructure bill on Tuesday with support from members of both parties.
Bigger Picture: The infrastructure bill includes funds that will go directly towards areas such as upgrades to highways and bridges, repairs to pipelines and new charging stations across the country. An estimate by Moody’s Analytics said that the bill will result in the creation of 650,000 new jobs.
Surge: Passage of the infrastructure bill resulted in an uptick in stock prices Tuesday for United States Steel Corporation (NYSE: X) and Caterpillar (NYSE: CAT).
Winners: The bill will likely benefit stocks in certain sectors that are related to infrastructure, including anything with construction, cement, and upgrading electric grids. Telecommunications providers could benefit from broadband upgrades.
Losers: The bill is partially paid for with a tax liability on blockchain-based transactions, which hurts digital currency.
Not So Fast: The House of Representatives still needs to pass the bill, which could take weeks to months. This all depends on how long talks drag out and if the Senate passes an additional spending package first.
Final Thoughts: Are current stock prices already factoring in the new infrastructure spending or not?
Notable Earnings Today: NIO (NYSE: NIO), eBay (Nasdaq: EBAY), Blink Charging (Nasdaq: BLNK), Wendy’s (Nasdaq: WEN)
Notable IPOs Today: 10X Capital Venture Acquisition Corp. II (Nasdaq: VCXAU), Chardan NexTech Acquisition 2 Corp. (Nasdaq: CNTQU), Decarbonization Plus Acquisition Corp. IV (Nasdaq: DCRDU), TPB Acquisition Corp I (Nasdaq: TPBAU)
Notable Equity Crowdfunding Campaigns Ending Today: Laundry On Demand (SMBX), Boaz Bikes (Wefunder)
Notable Economic Events Today: Consumer Price Index (8:30 a.m.)
Coinbase’s Strong Earnings, But Trouble Ahead?
Cryptocurrency exchange Coinbase (Nasdaq: COIN) posted its second-quarter earnings on Tuesday.
Data: The company’s $2.23 billion revenue exceeded expectations of $1.78 billion. Earnings per share were $3.45, better than the projection of $2.33. The stock price grew less than 1% in after-hours trading.
Second Quarter: It was a strong time period for Coinbase. The number of users on the platform grew 44% year-over-year to 8.8 million.
Third Quarter: The future might be murky. During its earnings release, Coinbase wrote that it anticipates “volatility” in the near team with “unpredictable quarterly financial results” due to the nature of the crypto industry.
Final Thoughts: Coinbase is seen as an alternative for investors who want crypto exposure without investing in actual cryptocurrency. Coinbase benefits from stronger name recognition when compared to other crypto platforms.
Dogecoin's Challenges Cloud The Future
Between early May and mid-July, cryptocurrency Dogecoin lost more than half of its value. While it has since recovered some of those losses, the drop showcases that the popular digital currency comes with a myriad of challenges.
History: Dogecoin was created in 2013 as a joke currency before it went mainstream. Jackson Palmer, co-creator of Dogecoin, criticized the entire crypto market in July.
Lower Usage: While Dogecoin is accepted by some businesses and charities, other coins such as Bitcoin are supported by more businesses. Dogecoin needs to have stronger support from the business community in order to grow.
Inflation: Dogecoin also lacks a supply cap, which is different than other cryptocurrencies. This creates an inflationary problem.
Scams: Although social media networks, such as Twitter and TikTok, have caused the price of Dogecoin to increase in the past year, there are some concerns that these have been tied to pump-and-dump schemes. There is also a history of some scams.
Final Thoughts: Dogecoin clearly has its challenges, but it has been good for those investors who do their homework before investing in it. There have even been investors who reportedly became millionaires for accumulating Dogecoin.
Trends To Watch
Some Gossip: AT&T/WarnerMedia In Talks To Sell TMZ To Fox (Deadline / Yahoo!)
Second Try: VanEck Tries Again for Bitcoin Strategy ETF With SEC (CoinDesk)
Back to Earth: AMC stock surrenders post-earnings gains (Fox Business)
Meta Crowdfunding: KingsCrowd Launches Series A Campaign on Republic to Revolutionize Startup Investing for All (PR Newswire)
Coming in Hot: Consumer inflation likely to be another scorcher in July, economists say (CNBC)
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