Hey Snackers,
Important logistical update: Dr. Fauci has returned from his trip to the North Pole and confirmed that Santa Claus has been vaccinated. Phew.
Stocks hit record highs last week as investors eagerly waited for Congress to pass a new stimulus plan. Bitcoin jumped 28% for the week, soaring past $22K for the first time.
On the pod: Re-live your favorite Snacks stories on our "Best of 2020" pod.
The second stimulus: what's likely included in the much-needed $900B package
The stimulus, Round #1... When lockdowns hit full force nine months ago, the economy suffered: a staggering ~22M Americans lost their jobs between March and April, and the unemployment rate soared to 14.7% in April from 3.5% in February. The US government moved quickly to provide financial medicine, in the form of a massive $2T economic rescue package.
- That helped drive a swift recovery, but now the pace of financial healing has dramatically slowed.
- Meanwhile: 10.7M Americans are still unemployed, ~8M have fallen into poverty since June, and Covid cases are soaring in a 3rd wave.
The stimulus, Reloaded... Nine months after the first stimulus was passed, Congress has finally agreed to pass another (smaller) stimulus bill. Here's what's likely included in the nearly $900B package:
- Checks: Direct payments of $600 to many American adults, and in some cases an extra $600 per dependent child.
- Boosted unemployment: An extra $300/week in unemployment benefits for at least 10 weeks.
- Business aid: At least $300B in small business assistance, including PPP loans.
- Healthcare funding: Funds for distributing the two FDA-approved Covid-19 vaccines, and relief to overwhelmed hospitals.
Small businesses lost big in 2020... While the Payroll Protection Program was intended to help mom-and-pop shops, it was bigger businesses who benefited most. More than half of the ~$525B in PPP loans doled out through November went to just 5% of the 5M total recipients. Most of the loan money was given to larger businesses, according to The Washington Post. ~100K businesses have permanently shutteredsince lockdowns. Meanwhile, 45 of the 50 largest US companies have been profitable since March. Small businesses badly need this 2nd stimulus — hopefully it'll be more helpful than the first.
Who's up...
Ludicrous Mode 500... Today, Tesla is joining the famous S&P 500 index, which tracks the stocks of the 500 most valuable US public companies. People use it like a "scoreboard" for how the overall market is doing. Big BTW: over $11T is invested in mutual funds and ETFs that track the index. Fund managers have been buying up Tesla shares for their S&P-tracking funds — that's likely why Tesla stock soared 14% for the week to a record high.
Double high... Literally. Tilray and Aphria are combining to create Earth's largest pot company (by sales). The new company will keep Tilray's name (#MarriageFlex). Tilray shares jumped 14% for the week. The merger will help expand reach in Europe and the US, where more pot legalization is likely. Despite their soon-to-be "world's largest weed company" status, Aphria and Tilray make less than $700M in sales per year combined — less than Juul's sales in 2018. Cannabis is like freshman year Harry Potter: gets all the attention, but hasn't really done much yet.
...and who's down
You Yougled GooTube... Must be the stress. Google shares ticked down for the week after it was served a hearty plate of antitrust salad. Ten states sued Google on Wednesday, accusing it of running an illegal digital ad monopoly. Then, on Thursday: 38 states joined an antitrust lawsuit that alleges Google used anti-competitive tactics to protect its search monopoly. For example: by paying Apple billions to be the default search engine on iPhone. If Google loses the suit, it might have to split off its Search biz.
Niet good... SolarWinds' network-monitoring software is used by multiple US federal agencies and most Fortune 500 companies. Usually, that's a major flex — now, not so much: last week, we learned that SolarWinds' software was hacked (likely by Russia). That led to a breach of the US Treasury and Commerce departments, and possibly the Department of Homeland Security (yikes). SolarWinds stock plunged 40% for the week, while cybersecurity stocks like FireEye (which was also hacked) soared.
What else we’re Snackin’
- Talk: The 11 most annoying business jargon words (please circle back to ideate on synergies).
- Enjoy: How to enjoy being alone, especially if you can't see family for the holidays.
- Learn: Why should I think about investing? And the potential difference between investment and savings.
- Work: Six things not to say in a job interview... if you want to get the role.
- Love: The four things that make almost everyone feel loved (stare deeply into your dog's eyes).
- See: 2020 in 20 visualizations, from the Australian bushfires to the first Covid vaccinations.
🍪 Want to start getting Snacking daily? Sign up here for our daily market newsletter.