🍨 Daily Scoop: Tech Companies' Next Frontier | Trade Stocks

Tech Companies’ Next Frontier

By Wed, Apr 14, 2021

Hey Scoopers,

After the FDA decided to halt a COVID-19 vaccine roll-out, the stock market ended the day with uncertainties over the economic recovery. — More on that in the “Overall Market” section.

Beyond the overall market, a teleconference company benefited from expectations that the economic recovery may face more delays. Meanwhile, the FDA’s decision to halt a large company’s vaccine affected its stock performance. — More on that in the “What’s Up?” and “What’s Down?” sections.

By the way, do you think it is time for tech companies to enter the healthcare market? — 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 mixed on Tuesday. Scroll down to the “Overall Market” section to read more.
  • Cryptocurrency: Bitcoin‘s price surpassed the $63K per coin mark as traders turn confident toward Coinbase’s IPO on Wednesday.

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Uncertainties In the Air

The stock market returned mixed results on Tuesday.

As investors wait for the earnings reports’ season to kick off later in the week, the stock market digested a higher-than-expected rise in the consumer price index compared to last year. Analysts pointed to energy prices as the main factor for the jump.

Moreover, the FDA put a halt to the distribution of the Johnson and Johnson vaccine until the issue related to the blood clot side effect is reviewed properly.

Despite all that, the Nasdaq index rebounded to rise more than 1% on Tuesday. Following the tech sector, the S&P 500 index also finished the day in the green.

Zooming Gains

So, what happened?

Shares of Zoom Video (Ticker: ZM) were up by more than 6% on Tuesday. After the FDA and the CDC recommended a pause on Johnson & Johnson’s (Ticker: JNJ) vaccine roll-out, investors’ sentiment turned bullish toward Zoom’s stock. The tech company’s software is the most used service for businesses and schools’ online meetings. Therefore, an economic reopening delay would benefit the company as users would keep using its platform. It seems that investors are looking for protection from more economic reopening delays.

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Vaccine Halted

So what happened?

Shares of Johnson & Johnson (Ticker: JNJ) were down by more than 1% on Tuesday. The dip came after the FDA halted Johnson & Johnson’s COVID-19 vaccine use. After six severe blood clot reports, the agency stated that it plans to investigate how the vaccine is related to the blood clot instances. Furthermore, investors’ sentiment toward the company turned bearish as the clinical issues could affect the public’s perception of J&J’s vaccine efficacy. Moreover, the FDA encouraged those who received J&J’s vaccine to keep an eye open if blood clot symptoms appear.

Tech Companies’ New Frontier

So what happened?

Microsoft (Ticker: MSFTannounced the acquisition of Nuance Communications (Ticker: NUAN).

Nuance is an artificial intelligence and speech recognition software provider focused on healthcare technology services. Although Microsoft still needs its investors’ approval, the company is confident that the acquisition will happen. After completing the purchase, the tech company hopes to bolster its offerings for the rapidly growing medical computing field with Nuance’s products. The primary factor that raised Microsoft’s interest in acquiring Nuance is the healthcare company’s vast array of speech and text data. Microsoft believes that the large database will be a critical part of developing Microsoft’s health system. The deal is the most significant Microsoft’s investment in more than five years, valued at $16 billion. For Nuance, the advantage of the acquisition will be easier and faster exposure to international markets.

As tech companies are looking for the next frontier, it seems Microsoft foresees significant potential in the tech healthcare business and wants to be a part of it as soon as possible.

If you have any questions, or suggestions let us know by emailing us at [email protected]. We look forward to hearing from you.

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