—— Total U.S. household debt surged; Peloton CEO left; ARK lightened up Twitter to avoid big volatility; vaccine company stocks faded; Apple increased employee benefits in retail stores; Web3 company Alchemy raised $200 million; state-owned funds added to Chinese company stocks.
1. U.S. household debt soars
According to statistics released today by the Federal Reserve Bank of New York, Americans’ credit card debt will rise every quarter through 2021, reaching $856 billion at the end of the year. Among them, the fourth quarter saw the largest increase and set a new record in 22 years.
On the other hand, total mortgage-backed loans rose from $9.56 trillion at the end of 2019 to an all-time high of $10.93 trillion at the end of last year, an astonishing increase.
Overall, total U.S. household debt has reached $15.6 trillion by the end of 2021, $1.4 trillion higher than two years ago. Among them, the proportion of mortgage loans reached 70%. With the exception of student loans, all other categories of debt rose.
The FED report also shows that in the fourth quarter of 2021, banks issued a total of more than $1 trillion in mortgage-backed loans, and more than two-thirds of them had a credit score of more than 760.
Mortgage rose the most of all debt categories, driven by a hot housing market and rising prices
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2. Peloton CEO leaves
Today, the smart bike brand Peloton Interactive Inc. announced in a statement that CEO John Foley will step down as executive chairman. Over the past year, the company’s revenue performance has been disappointing, and active shareholder Blackwells Capital LLC. is very optimistic about John’s leadership.
It is reported that Spotify Technology SA’s former CFO Barry McCarthy (Barry McCarthy) will take over John’s position starting February 9. Peloton also announced that the company will cut 2,800 jobs globally.
Shares of Peloton have fallen more than 80% from their peak a year ago. Peloton’s stock price jumped 30% on Monday after rumors revealed that Amazon and Nike might buy Peloton.
The demand for Peloton’s products has become less and less during Covid-19
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3. ARK Lighten Up Twitter
Twitter will release its latest quarterly earnings on Thursday. The company sold nearly 4 million shares of Twitter Inc. on Monday, according to data released by Cathie Wood’s ARK Investment Management LLC.
Casey’s flagship fund ARK Innovation ETF and ARK NextGen Internet ETF sold 3.66 million and 280,000 Twitter shares, respectively, for a combined $142 million.
ARK’s flagship fund has gained 150% in 2020, but the 2021 return has been disappointing as investors sell off stocks of overvalued tech companies and the ARK fund has gradually lost its halo.
Recently, social platform companies such as Meta Platforms Inc. and Snap have delivered mixed quarterly reports, and their stock prices have fluctuated greatly. To avoid a similar situation with Twitter, Casey decided to reduce his holdings a few days before Twitter’s earnings report.
ARK has sold millions of Twitter shares since February
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4. Vaccine company stocks fade
Today, the shares of the three vaccine giants BioNTech, Moderna Inc., and Pfizer Inc. fell 5.6%, 3.5%, and 4%, respectively, wiping a combined $20 billion in market value.
Pfizer’s new quarterly report this morning showed that the company’s 2022 revenue and profit guidance missed analysts’ expectations. Still, Wall Street believes government contracts for Pfizer’s vaccine will help the company maintain revenue in the next few years, but it may be difficult to return to levels seen during the worst of the virus.
Citi analyst Andrew Baum (Andrew Baum) said the market believes that Pfizer’s sales are closely related to the new crown virus situation, so if the epidemic eases, the company’s revenue may be difficult to maintain.
Vaccine companies have seen fewer retail transactions over the past few months as the coronavirus has gone from a major infectious disease to a virus that coexists with humans. Shares of Pfizer have fallen 14% since the beginning of the year.
The revenue performance of vaccine companies is going down
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5. Apple increases retail store employee benefits
Apple Inc. plans to significantly increase benefits for workers at 270 U.S. retail stores, according to people familiar with the matter.
It is reported that starting April 4, Apple will:
- Double the paid vacation salary for full-time and part-time employees, and full-time employees will also receive 12 days of paid vacation per year;
- After three years of employment, employees can gradually get more annual leave days, which is shorter than the previous five years of employment;
- Part-time employees will receive 6 paid vacation days per year, the first time in the company’s history;
- Part-time employees can get the emergency child and elderly care services.
Apple revealed that the recent competition in the job market has made it more difficult to recruit and retain employees. Employees at Apple retail stores have also complained about unsatisfactory work conditions during the outbreak. The company hopes to take this opportunity to improve employee job satisfaction and benefits.
Employee benefits are now another battleground for big U.S. companies
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6. Web3 firm Alchemy raises $200 million
Today, cryptocurrency software development company Alchemy announced in a statement that the company has closed a new round of $200 million in the financing, raising its valuation to $10.2 billion. Investors in this round of financing include private equity firm Silver Lake and venture capital firm Lightspeed Venture Partners.
Developing an application that can handle the high volume of cryptocurrency transactions has been one of the industry’s early challenges, and this transaction underscores the strong investor interest in cryptocurrency application development.
Alchemy said the company’s software has $105 billion in annual cryptocurrency transactions.
Alchemy co-founder Nikil Viswanathan said that many people are busy developing the infrastructure of Web3, this market is very large.
Web3, also known as Web 3.0, is a concept about the development of the World Wide Web, mainly related to blockchain-based decentralization, cryptocurrencies, and non-fungible tokens (NFTs).
According to PitchBook statistics, unlisted cryptocurrency companies received a total of $31.6 billion in capital injections last year.
Alchemy can help develop application platforms that carry huge transaction volumes
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7. State-owned funds increase Chinese company stock holdings
Today, China’s state-owned fund announced that it will add to its holdings in Chinese blue-chip companies to help cushion the recent general decline in stocks.
Shares and U.S. depositary receipts of a number of Chinese tech companies, including JD.com, Alibaba, Pinduoduo, and Didi, rose more than 1 percent each. The Nasdaq Golden Dragon China Index rose as much as 3.3%.
Shares and U.S. depositary receipts of a number of Chinese tech companies, including JD.com, Alibaba, Pinduoduo, and Didi, rose more than 1 percent each. The Nasdaq Golden Dragon China Index rose as much as 3.3%.
However, the U.S. Department of Commerce recently added 33 Chinese companies to its blacklist, and the relationship between the two countries is still relatively rigid. Companies on the blacklist will need to obtain additional licenses if they want to import products from the United States.
Among them, after Wuxi Biologics Cayman Inc. was blacklisted, its American Depositary Receipts (ADR) fell by 19%, and the company’s shares listed on the Hong Kong Stock Exchange were also suspended from trading.
Chinese companies rose after gaining support from Chinese state-owned funds
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The content of this article comes from various financial news media such as The Wall Street Journal, Financial Times, Bloomberg, etc.