Hot Market, Hotter Debates
By Fri, Apr 10, 2020
Hey Scoopers,
The Fed’s trillion-dollar stimulus package has propped up the market and fueled heated conversations on social media and across the internet. – more on that in the “Overall Market” section.
Beyond the overall market, shares of a restaurant stock were up courtesy of Goldman Sachs’ nod of approval. At the same time, the layoffs have begun, and they are making their marks on stock prices. – more on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, the oil price and production saga continued, even though Russia and Saudi Arabia agreed on production cuts. — more on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: The stock market ended the day in the green zone, despite everyone’s expectation for a decline. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price is hovering above the $7,000 mark, despite the fact that the first “halving” of the coin happened on Wednesday.
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Hot Market, Hotter Debates
On Thursday, the Fed unveiled the details of its $2.3 trillion stimulus package which has sent the market up for yet again another day. This market price jump coincided with another 6.6 million new jobless claims. It’s counterintuitive to see the market is up on a day that millions of people have lost their jobs.
Putting the irrationality of the market aside, the Fed’s move hasn’t been appealing to all. People don’t agree with all the actions that the Fed is taking to save the economy. For example, including junk bonds in the stimulus package is perceived as “saving billionaires,” and has caused heated arguments all across the media. Here are a few other details of the program that you would want to know:
- Buying up to $600 billion in loans for companies with less than 10K in employees and $2.5 billion in revenue,
- Expanding corporate credit program up to $850 billion,
- Financing municipal loans and bonds,
- And, many more unprecedented actions and moves …
One thing for sure is that whatever the Fed does, it’ll be damned in the media.
Moving Up, Courtesy Of Goldman Sachs.
So, what happened?
Shares of Chipotle (Ticker: CMG) were up more than 6% on Thursday. Despite the impact of COVID-19 on dining out, the stock is up courtesy of Goldman Sachs’ list of stocks with high growth potential post-COVID-19.
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Layoffs Have Begun.
So, what happened?
Shares of Yelp (Ticker: YELP) were down more than 6% on Thursday. Despite the company’s rather stable balance sheet, measured by limited debt, free cash flow, and the availability of cash to the company, Yelp has gone ahead to lay off 1,000 employees.
The Oil Saga Continues.
So what happened here?
The Fed pouring trillions of dollars into the economy and the heated debate over what’s right and what’s wrong overshadowed the Oil news. We all knew the market’s crash in mid-March was partially fueled by Saudi Arabia’s Oil price-cut and the fight with Russia over price and production capacity.
On Thursday, the two countries and other OPEC nations got together (virtually) and agreed on a plan to cut production by 10 million barrels. All was going well until Mexico threw a tantrum. So, the Oil saga continues …
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
