Episode 87: Technology and growth stocks are back

Technology and growth stocks are back in favor with some investors. Tom Lee changed his sector ratings to overweight FANG while downgrading financials, a popular value play, to neutral. “We are rethinking which sectors will lead the S&P 500 to 4,400 by mid-year 2021 (really the next 4 weeks).  The primary reason for this shift in view is that interest rates are declining, and to a secondary extent, it reflects the fact markets already ‘panicked’ about inflation,” Lee's note said.

  • What are we going to wear? The Wall Street Journal story last week, but for better or worse, the issue it grapples with—what post-pandemic workwear will look like—remains painfully relevant. I found it particularly reassuring that even Elizabeth Spaulding, incoming CEO of Stitch Fix, a company that’s all about clothing and styling, is struggling with her new work look, ultimately settling on espadrilles and white jeans for one recent in-person meeting. (“It’s more casual than I would have been in the past, but getting dressed and pulling it all together is harder,” Spaulding told WSJ.)

  • Blue: Twitter launched its first subscription service, "Twitter Blue," for ~$3/month — but will people pay for social media? We don't know how many people will actually pay for Twitter Blue, which still shows ads. But if a social giant offered an ad-free subscription, that could have wide appeal. Social apps reward engagement because they want users to spend more time scrolling ads. An ad-free sub could change their business incentives.

Market Closed

Dow 30 34,479.60 +13.36 (+0.04%)

S&P 500 4,247.44 +8.26 (+0.19%)

Nasdaq 14,069.42 +49.09 (+0.35%)

IPO/SPAC

Chinese ride-sharing giant Didi, which has filed to go public, earned a small profit last quarter on $6.4 billion in revenue. The company reported a small profit this past quarter on $6.4 billion in revenue. In its filing, the company listed a net income of $837 million before certain payouts to shareholders.

LegalZoom.com, a Glendale, Calif.-based provider of online legal solutions, refiled for an IPO (it first filed in 2012 but withdrew in 2014). It plans to list on the Nasdaq (LZ) and reports $10 million of profit on $471 million in revenue for 2020. Shareholders include Francisco Partners, IVP, Kleiner Perkins, TCV, and Bryant Stibel. http://axios.link/sxH0

LATAM

Clip, Mexican digital payments, and commerce platform raised $250 million led by SoftBank and Viking Global Investors at a valuation north of $2 billion. www.clip.mx

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Episode 88: Energy stocks as a recovery play

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Episode 86: The meme stock mania is back