From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
MARKETS
U.S. markets ended the week on a sour note after the Fed said it would not extend a COVID-era exemption for banks to relax their capital requirements, sending financial services stocks tumbling. If you’re confused about the recent moves in the market, you’re not alone. Investors have been fairly-to-extremely optimistic about the state of the economy given the increasing vaccination rollout paired with the $1.9 trillion stimulus bill that’s set to juice consumer spending as it starts hitting bank accounts. But then pesky old concerns about inflation seem to have taken over as the main existential risk to stocks, particularly those high-growth tech companies that have been ripping higher during the pandemic. Add to that the worrying signs out of Europe, with Paris going back into lockdown and the continent now fully in the grip of a third wave, and it’s making for a volatile trading period. Fed Chair Jerome Powell did his best to quell jitters this week by telegraphing that the central bank had no plans to raise rates through at least 2023 and that he remains unconcerned about the recent rise in bond yields as a result, though his words did not do much to reassure the market.
VACCINE MAKERS
AstraZeneca shares jumped in the front half of the week only to trail off under pressure from headline risk — even after the EU’s top medicine regulator reiterated that its COVID vaccine is safe and effective. That came after several European countries paused their AstraZeneca rollouts over a handful of reports of blood clots in people who had gotten the shot. Though Europe has since switched gears and countries are resuming the use of its shot, of the big vaccine makers, Astra is having a rough go of it, both in terms of public perception and stock performance. The stock is roughly flat year-to-date, compared to Johnson & Johnson, up 2 percent, and Moderna, up 35 percent. Novavax, a small U.S. biotech that was on the verge of bankruptcy this time last year, is up nearly 100 percent even though its vaccine has not even been approved. Like Astra, Pfizer has also been weighed down of late, though it’s mostly due to their legacy drugs losing patent exclusivity.
BETTING MADNESS
March Madness is back after last year’s pandemic furlough, and fans are ready to bet big on the Big Dance. According to an estimate from the consultancy H2 Gambling Capital, this year’s NCAA men’s college basketball tournament could generate $2 billion in legal betting revenue — potentially making it the most-legally-wagered sporting event of all time. Penn National, one of the hottest online sports-betting platforms, got a boost this week with the announcement that it would join the S&P 500, along with Caesars, as investors bet on increasing legalization of sports betting across the U.S. Penn is up an eye-popping 750 percent in the last year, helped by its partnership with the popular sports media empire Barstool Sports. (Penn owns 36 percent of Barstool). Incumbent players like DraftKings are also expected to get a boost from March Madness, considering that last time the tourney was played, in 2019, sports betting was legal in just seven states. That’s ballooned to 20 states plus D.C. in time for this year’s first tipoff.
DISNEY SCORES
In a huge moment for streaming media, Fox has ceded the exclusive rights to Thursday Night Football to Amazon, starting in 2022. The NFL reached long-term deals with all the big TV networks: NBC will keep Sunday Night Football, CBS and Fox will carry Sunday afternoon games, ESPN will remain the rightsholder for Monday Night Football, and ABC will enter the Super Bowl rotation. Combined, the deals are worth north of $100 billion for the league, and also amounts to a victory for Disney. The Mouse House will pay about 35 percent more to the NFL — less than its competitors — but is getting more football for its money, including half a dozen more regular season games and two Super Bowls. Plus, Disney’s sports streaming arm ESPN+ will be allowed to simulcast any MNF game that airs on ESPN or ABC. Disney’s also planning to reopen its two California theme parks, Disneyland and California Adventure, on April 30 with COVID restrictions in place. Most of Disney’s other parks have been operating in some capacity, but the two big California attractions have been closed for a year. Among the new safety protocols expected to be in place: efforts to reduce screaming on roller coasters.
BANKING ON BITCOIN
Morgan Stanley this week became the first big U.S. bank to offer its wealthiest clients access to Bitcoin. In an internal memo obtained by CNBC, Morgan said it would give wealth-management clients access to three Bitcoin funds, responding to demand for crypto exposure from some of its heaviest hitters. Bitcoin hit a new record last weekend — $61,782 — but has fallen back on a combination of profit taking and the news that India is proposing a ban on buying, selling, or even holding any cryptocurrencies. That would be among the world’s strictest laws against crypto and has sent shudders through the asset class.
