Good morning, Bull Sheeters.
Another day, another all-time-high. So much for those taper fears.
To recap, Federal Reserve Chairman Jerome Powell yesterday announced the central bank will be a much more fiscally prudent guardian of our tax dollars. Rather than spend $120 billion per month on Treasuries and mortgage-backed securities, the Fed will spend just $105 billion this month, and then $90 billion the next, and $75 billion in January (maybe)…and so on. Investors greeted that news like a kid who learns that his punishment for failing his math test is one hour less of screen time each evening.
That’s to say the markets rallied, and they’re climbing again today.
The crypto price board, meanwhile, is quiet. There’s more red than green out there, with Bitcoin and Ether both down 2%. The doggy coins, Doge- and Shiba Inu, are down double digits. Woof!
Let’s see what else is going up (and down).
Markets update
Asia
- The major Asia indexes are rebounding today with the Shanghai Composite up 0.8% in late-afternoon trading. Chinese stocks have all but missed out on this week’s global equities rally.
- Shares in Tencent jumped nearly 2% on Thursday after the Chinese internet giant gave investors a rosy progress report on its new chips-making capability. It just launched three new high-powered semiconductors as the company pushes further into this vital tech-hardware sector.
- A warning to Shiba Inu bulls. Ownership of the joke-coin, which has a market value of more than $50 billion, is overwhelmingly concentrated in the hands of a mere ten “whale wallets.” And one of those whales is divesting.
Europe
- The European bourses were off to a good start, with the Stoxx Europe 600 up nearly 0.6% 30 minutes into the session. The banks and autos are leading the way higher.
- Bond hawks are watching closely the Bank of England today. The markets give the central bank 50-50 odds of raising interest rates to combat rising inflation. A BOE move could be big enough to pressure global bond yields.
- Europe has been pushing the bicycle as a key mode of clean urban transport for years, never more so than since the unwelcome arrival of COVID. It’s creating a lot of innovation in the space. On cue, Fortune‘s Phil Wahba, who wrongly thinks he could out-cycle me in a road race (I’d catch him in the hills, I tell ya), features the story of the runaway hit VanMoof, a Dutch e-bike maker.
U.S.
- The U.S. futures are a touch higher. The major averages closed at fresh records on Wednesday with the Nasdaq now on an eight-day winning streak. Who said tapering would be bad news for tech? 🤷🏼
- Shares in Zillow fell an astonishing 23% yesterday (they’re up a 3.6% in pre-market) as investors continue to digest the surprise collapse of the firm’s iBuying house-flipping business. According to one report, the Zillow Offers unit was vastly overpaying for properties in some of America’s hottest real estate markets. Perhaps more ominously, true-believer Cathie Wood dumped 3.9 million Zillow shares yesterday.
- Taper, schmaper. It feels as if meme-stock mania has returned to the markets. Shares in Reddit favorites GameStop and Bed Bath & Beyond soared yesterday as retail traders once again dive into options-trading. Fortune‘s Chris Morris captured some classic online reactions from will-they-ever-learn? bystanders. All this meme-stock love has done wonders for the small-cap Russell 2000, up nearly 7% in the past week.
Elsewhere
- After yesterday’s taper tail-off, gold is up, trading above $1,770/ounce.
- The dollar rallied after the Powell press conference. It’s up again this morning.
- Crude has had a rough week.Brent trades below $82/barrel.
- Bitcoin is slipping. It trades below $62,000. The big action is Ethereum’s Ether, which hit a new all-time high on Wednesday.
***
Buzzworthy
The year of the ATH
There are, by my count, 40 trading days left in 2021. Does the benchmark have 16 more record-closes in its future? The bulls would say there are plenty of seasonal tailwinds for stocks. Buybacks are surging, and we now have guidance on tapering.
🚀🚀🚀
Meanwhile, at the corner of Zillow and Wall
Zillow shares are down 37.7% since the Friday close.
😬😬😬
Tapering Take-two
A coding gremlin messed with the essay in yesterday’s Bull Sheet. To repeat: here’s a recap of the path ahead now that tapering is no longer theoretical:
🧹🎉🧹
And finally…gotta love Jersey politics
Vito Perillo, a World War II vet, is, according to the Washington Post, “at the peak of his political career.” On Tuesday, he won re-election for another four-year term as mayor of the New Jersey town, a bedroom community in Central New Jersey. If there are any Bull Sheet readers from good old Tinton Falls, drop me a line. Being a former municipal-beat reporter, I’m always curious to hear about local politics.
🗳️🚀🗳️
***
Have a nice day. I’ll see you here tomorrow… Until then, there’s more news below.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Tesla stock just made the biggest 12-day gain in the history of capital markets—Fortune
The Fed has two options on inflation—and neither of them are pretty—Fortune
How a risky bet on the Shiba Inu coin made this warehouse manager a millionaire—Fortune
Market candy
A year ago this week
On Nov. 3, 2020, Chinese regulators effectively canceled what would have been the biggest IPO ever—that of Ant Group, the popular fintech subsidiary of Alibaba. In the year since, Alibaba shares in Hong Kong have fallen more than 40%, sinking the once high-flying Chinese tech sector with it. Fortune's Yvonne Lau looks back on the past year, concluding the "golden era" for Chinese unicorns is probably gone for good.
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