Episode 42: Markets selling off.

Happy Monday.  We kick off the week with the markets selling off.  The uncertainty of the stimulus package and the upcoming election is keeping everything under pressure.

Joe Biden is not just up in the polls. His potential presidency has already become Wall Street’s consensus view, according to JPMorgan.

“Market expectations are set up for a Biden win and a front-loaded fiscal package into 2021, and there is room for disappointment if these assumptions do not come to fruition,” said Joyce Chang, chair of global research at JPMorgan.

We have a busy week of earnings with IBM, Netflix, Snap, Tesla, Coke, and Intel. Earnings so far have come in positive but we are still in the early stages of seeing how everything will shake out. We will keep you updated on all the developments. 

Markets Close Dow Today

Dow 30 28,195.42 -410.89(-1.44%)

S&P 500 3,426.92 -56.89(-1.63%)

Nasdaq 11,478.88 -192.67(-1.65%) 

SPACS

The Wall Street Journal is echoing concerns I have about the SPAC bubble that is being created during this pandemic.  As we have seen SPACs have skyrocketed reaching a record of $53B in proceeds raised. Even Shaquille O’Neal has stepped up to try his hand at his own SPAC.

“The fact that there are so many SPAC’s out there searching for mergers certainly allows for operating companies to play them off each other”, says Jay Ritter finance professor at the University of Florida.  We saw Nikola go public via SPAC and their outcome hasn’t been a great model.  Whether this unsettling trend lets the market boom or bust, the reality is this is where investors are looking as an alternative to an IPO. 

We will launch a great interview with Jonathan Hunter on Friday, Managing Director and Founder of Department 13 responsible for the counter-drone and airspace management.

Have a great week.