The Death of Office
Despite no real inflation spike, the market had a volatile Wednesday. — More on that in the “Overall Market” section.
Beyond the overall market, one space stock had an excellent day, while a semiconductor stock fell due to no fault of its own. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, is the office space as we know is dying? — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
- U.S. markets: The stock market indices didn’t agree on the direction. They also didn’t move too far from where they started the day despite the mid-day volatility. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price is back at it and moves upward, ending Wednesday above $37,000 per coin.
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The stock market indices had a volatile day and didn’t agree on the direction by the end of the day. The Dow finished in the red, and the other two indices ended in the green but only barley. Yesterday we talked about the Consumer Price Index (CPI) report that came out on Wednesday morning. It seems worries about inflation wasn’t justified, and aside from a 1.6% increase in gasoline prices, the underlying inflation remains tame.
So, what happened?
Shares of Virgin Galactic (Ticker: SPCE) were up by more than 11% on Wednesday. The space tourism company had taken a beating recently after it had to skip one of its test flights due to technical challenges. On Wednesday, however, the gods of the stock market turned their attention to this stock again. Or, to be exact, the queen of the stock market turned her attention to the space travel and tourism industry. Who am I talking about? Cathie Wood, Chief investment office of ARK Invest, announced her company is introducing a new ETF focused on space exploration. Investors celebrated the news by picking up Virgin Galactic shares.
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No Fault of Its Own
So what happened?
Shares of Advanced Micro Devices (Ticker: AMD) were down by almost 4% on Wednesday. The chipmaker shared some good news that it is introducing a new class of mobile processors. However, the news from its rival Intel (Ticker: INTC) is mostly the main reason behind the stock price decline. Intel announced it is replacing its CEO. It seems investors are taking the news as an indicator that Intel can focus on taking back lost market share.
The Death of Office Space
So what happened?
The news broke that Dropbox’s (Ticker: DBX) COO is leaving, and it is laying off 11% of its workforce. In a letter to the employees, the CEO discussed the company’s virtual-first policy and the fact that the company doesn’t need many of its current workforces anymore now that they have moved on to a virtual office model.
The immediate implication is for the company’s stock price, which fell by more than 6% on Wednesday. But, the broader implication is even more critical. This is perhaps the first of many similar press releases through which tech-savvy companies give up their office spaces and cut down the overhead to run lean operations. The even broader implication is for the commercial real estate stocks and REITs. The COVID-19 pandemic may have triggered a much larger change in how we work and live, and Dropbox’s announcement could be the sign of such a change. Perhaps this is the start of the death of the office space as we know it.
If you have any questions, or suggestions let us know by emailing us at [email protected]. We look forward to hearing from you.