Just a couple days after Congress agreed to pass an $892 billion coronavirus relief bill, President Trump surprised many by strongly criticizing the bill and threatening not to sign it until Sunday night. President Trump lambasted the lengthy bill for it’s billions in foreign aid without focusing internally on the American people. His signature did two things for the US economy: it prevented a government shutdown on Tuesday and it extends aid to the American people in coronavirus aid. The two key pandemic unemployment programs received their last payment this weekend, but due to the bill being signed on Sunday instead of Saturday, the payments could be delayed several weeks.
The President cites too small of a direct payment in the form of a stimulus to citizens referring to the proposed $600 stimulus as “ridiculous low. He instead proposed an increased stimulus of $2000 for individuals and $4000 for couples.
Yesterday, President Trump ended up signing the bill as his club in Mar-a-Lago, with the stipulation that Congress consider implementing legislation to increase direct payments in the future. Although less than timely, the signing of this bill allows an approximate 12 million benefit recipients to continue receiving benefits for another 11 weeks and signals an end in the latest point of contention in the Trump Presidency.
PELOTON – RIDING MOMENTUM INTO THE NEW YEAR
Peloton, the American exercise equipment and media company, has struck a deal to acquire Precor. Precor is an industry leader in exercise equipment manufacturing and this deal presents a unique opportunity for Peloton to continue to capitalize on the significant success they’ve had this year boosted by the pandemic. This deal is expected to close early in 2021 and will cost $420 million but stands to return far more. Peloton has the great problem of struggling to meet their ever growing demand for their orders. This in conjunction with shipping delays due to the pandemic have led to an increase in cancelled orders by frustrated customers. Peloton’s stock had a meteoric ascent this year up more than 500% on the year and a successful solution to their distribution issues will surely please their investors and pique the interest of many more.
JACK MA AND ANTI-MONOPOLY PROBE
It appears that Jack Ma would have far preferred a lump of coal this Christmas instead he received news that chinese regulators were conducting an anti-monopoly probe into the chinese monolith. This news led to a massive selloff for the E-Commerce company with a 13% drop in share value on Christmas eve. This appears to be just the start of the implications from their recent woes including the halting of the $37 Billion IPO of their subsidiary Ant Group. As of yesterday, the Zhejiang Provincial Administration for Market Regulation has concluded the probe into Alibaba reporting that they cooperated with the investigation team in a timely manner. Subsequently Alibaba has announced a 67% increase in their share buyback program from $6 to $10 Billion USD over the next two years. This may be great timing considering the discount in share price although the timing has led to speculation amongst investors. In demonstrating their confidence in their outlook they may have provided a bit of good news. Whether this is reflected in the halting of their tumultuous stock price has yet to be seen. With Alibaba down 26% since it’s peak in late October, there are certainly a number of investors tuned in for an answer.
New Coronavirus Strain Induces Widespread Concern
Despite the FDA announcing emergency approval for immediate distribution of Pfizer and Moderna’s coronavirus vaccines, panic is still prevalent. A few new coronavirus strains have been detected in the UK, South Africa, and Nigeria and others in the past few weeks bringing rise to questions as to whether the vaccines carry the same macroeconomic implications from before. The effects of each strain are far reaching. The strain in the UK for example, does not appear to be more fatal but it is reportedly 70% more transmittable leading to dozens of countries banning travel from the United Kingdom. The Public Health Agency of Canada confirmed the first two North American cases in Ontario Saturday night. Japanese officials have announced that their borders will be closed from midnight tonight to January 31st after receiving seven positive results for the new coronavirus strain. BioNTech’s CEO has announced that there is a “relatively high” chance the vaccine they created in conjunction with Pfizer will prove resistant to the new coronavirus vaccine. The importance in the accuracy of this statement cannot be overstated and we can expect significant public reaction to the conclusion one way or another.
LAST WEEK’S EARNINGS