Coinbase and crypto slump, but a resurgent economy pushes blue-chip stocks higher
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Good morning, and happy Friday.
Coinbase is slumping at the moment, but U.S. futures are gaining, following global stocks higher. There’s a lot to be bullish about today. Corporate earnings so far look stellar, as does the latest batch of economic data. And that’s sustaining the risk-on mood hanging over markets.
So, where would you make your next big bet? Crypto? Bic caps? IPOs?
That’s the very subject of our latest Quarterly Investment Guide for Fortune subscribers, which went live yesterday. My colleagues and I talked to the most savvy investors and markets innovators out there: including Cathie Wood, and the activist short Nathan Anderson—yep, the one who brought down Nikola Corp last year. There’s a great story on the surprising hedge that billionaires like Bill Gates are using, and we dive into Wall Street’s biggest investments—including crypto and NFTs. Check it out!
In the meantime, let’s see what’s moving markets.
- The major Asia indexes are closing out the week on a high note. The Shanghai Composite is up 0.7%.
- Investors cheered China’s knockout GDP reading. The economy grew by a whopping 18.3% in Q1. There’s an asterisk to that figure, however: it’s a year-on-year number, and that result actually narrowly missed expectations.
- The European bourses are making modest gains out of the gates with the Stoxx Europe 600 up nearly 0.1% at the open, before gaining.
- Shares in Daimler were up 2.2% this morning on a big earnings beat. The German automaker’s Mercedes-Benz unit unveiled yesterday its new battery-powered EQS sedan. “The car comes with a Tesla-beating range,” reports Fortune‘s auto whiz Christiaan Hetzner.
- Nestle is committing $3.5 billion to its net-zero goals, the world’s biggest food conglomerate told shareholders yesterday. Alas, the ESG crowd can be awfully discerning. Nestlé shares are down 0.2% mid-morning.
- U.S. futures are flat, but are off their lows. That’s after the DJIA rose more than 300 points to a new high on blowout economic data, which pushed down Treasury yields and sent stocks on a tear.
- Coinbase closed at $322.75 yesterday, off 1.7% on the day. But the bulls aren’t dissuaded. Gil Luria of D.A. Davidson talked to Fortune‘s Anne Sraders about why he slapped a $650 target price on COIN. He’s hardly alone. Investment firm BTIG thinks it will hit $500.
- For the less bullish argument on COIN… do yourself a favor, and read Shawn Tully’s take. Coinbase living up to its $61 billion valuation is one tall order, he reports.
- Who’s on the earnings calendar today? We have Morgan Stanley, Bank of New York Mellon and PNC Financial Services Group, to name a few.
- Gold is up, trading around $1,770.
- The dollar is up a tick.
- Crude is gaining with Brent trading above $67/barrel. Yesterday’s bullish batch of economic data is doing wonders for the energy sector.
- Bitcoin is in retreat. It’s trading around $61,600, down more than 4% from its all-time high reached earlier in the week.
By the numbers
Big cap bulls, it’s time to break out the cigars. The bluechip Dow has climbed more than 11,000 points in the past 52 weeks to close yesterday above 34,000. That’s a 49% jump. What’s driving the Dow? 👇👇
Economic data is validating some of those super bullish GDP forecasts we’ve been seeing in recent weeks. Case in point: yesterday’s retail numbers. “Markets have much to applaud today,” Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, wrote in an investor note in response to Dow 34K. “Consumers emerged from the chills of February and hit the stores with a pocket full of stimulus money. As a result, retail sales shot up 9.8%, well above consensus expectations and second only to last May’s number. Markets also like what they are seeing in the first round of earnings reports, with earnings momentum expected to continue through 2021.” …. Keep an eye on the data. It’s looking good.
Revisiting the outperforming (yours truly) trade
A week ago, I told you about my nephew. He lives with his buddies in a cool apartment in Philadelphia. He’s a kick-butt skateboarder and mountain-biker. He’s a fan of New England IPAs and Tom Robbins books. He’s also long GameStop, which has had a bit of a rough week, but, hey, there’s a management shakeup underway at the stonky retailer, and, you never know. No matter. He’s still up more than 50% on the trade. (He bought three shares for 100 bucks in early March, and he’s HODL-ing.) He texts me his stocks observations every now and then, which got us chatting earlier this week about Coinbase. He pulled the trigger there too, and got in at $322.61. At the moment, COIN is inching lower in pre-market, but when you have 💎💎 hands, and you’re in your twenties, and you’ve got a cool place in the city, life is pretty good. Bravo, Martino! 🚀🚀🚀
Have a nice weekend, everyone. I’ll see you back here on Monday… But first, there’s more news below.
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Pastrami and EPS to go. Paulsboro, N.J., off Route 295, across the river from Philadelphia, is home to Your Hometown Deli. This deli appears to be the lone operating asset of Hometown International, an OTC stock (HWIN) with a market cap above $100 million. A single deli with a nine-figure valuation? Welcome to the CrazyTown exit of the 2021 bull market. Man, what I'd do for a Jersey deli pickle and coleslaw right about now...
Sherman's march. GameStop CEO George Sherman has forfeited 587,000 shares of the high-flying stock for failing to meet performance targets. My colleague Chris Morris calculates that would cost him a cool $91 million at yesterday's valuation. Oh, he's also apparently out of job. But don't feel too bad for Sherman. He's still got a roughly $280 million stake.
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Quote of the day
The most important thing for new investors is to disabuse themselves of these false pillars of security. Just because a company is listed on a major exchange like Nasdaq or the New York Stock Exchange doesn't mean that they're telling the truth.
That's Nathan Anderson, the whistle-blower activist investor, and founder of Hindenburg Research. Anderson became famous a year ago for his takedown of Nikola Corp., the high-flying EV that soared to a crazy valuation on a prototype truck that famously was never built to drive on its own power—it had to be pushed. Literally. What's Anderson got his eyes on these days? Crypto fraud, a SPAC bubble and a wave of U.S.-listed Chinese firms with dodgy books. Here's the Q&A interview I conducted with Anderson for the Quarterly Investment Guide.