"Summer should be getting a Speeding Ticket!"- Weekly Market Update- August 29, 2020
“NBA Leads Pro Sports Boycott”
Following the tragic shooting of Jacob Blake, where Blake was shot 7 times in the back by a police officer, boycotts have erupted across all professional sports leagues. The boycotts were lead by the Milwaukee Bucks (the shooting happened in Kenosha, Wiconsin) but have since rippled to other NBA teams, the WNBA, NFL, MLB, MLS, NHL, and tennis.
The last time that NBA players boycotted a game was in 1961 when the Bill Russell and the Boston Celtics protested racial injustice. It’s unfortunate that the players today are protesting similar isues. However, it’s uplifting to see widespread support from other leagues that aren’t normally as vocal on social issues.
Let’s take a look at some of the biggest business updates from this week.
The Bytedance-owned social media company TikTok has been dominating headlines recently and not always for the best reasons.
1. In November of last year, the FBI announced that they will be investigating TikTok over national security concerns.
2. This has since escalated to a Donald Trump announcement that the company has 45 days to sell or it will be banned from the United States (that was on August 7th).
3. Now, multiple companies are in talks to acquire TikToks’ U.S. operations including Microsoft, Oracle, and Walmart.
TikTok is wildly popular in the United States with over 2 billion downloads and 100 million American users. Whichever company wins the bidding war will be able to leverage this audience to their advantage. This decision will most likely come in the next week or so.
Doordash prepares for a Q4 IPO
Since the mandated stay-at-home orders were instituted, Doordash has risen through the ranks to become America’s #1 food delivery service. This is a great time to be in the delivery service because the need for reliable delivery has only intensified due to people staying at home, restaurants operating delivery-only, and social distancing rules in place at grocery stores and restaurants. Now, Doordash is also venturing into grocery delivery to expand their reach and compete with Amazon Fresh and Instacart.
What makes Doordash so unique is their powerful backend. Similar to how Shopify creates eCommerce software that has powered about 1 million online stores (like Kylie Cosmectics), Doordash creates software to power delivery services (and then sells it to Walmart and Wegmans).
The Dow Jones gets adjusted
Who’s out - Raytheon, Exxon Mobile, Pfizer
Who’s in - Salesforce, Amgen, and Honeywell
Shakeups like this are relatively rare and was prompted because of Apple’s 4-1 stock split, which would have significantly reduced the indexes’ exposure to the technology sector.
Of all the major indexes (S&P, NASDAQ, and Dow Jones) the Dow has been the slowest to regain it’s coronavirus losses, being outpaced by the NASDAQ and S&P.
A few other updates:
➢ KFC suspending their “Finger-Lickin Good” slogan in light of the pandemic saying that it “just doesn’t feel quite right”.
➢ The US is experiencing an aluminum can shortage amidst the pandemic due to a surge in people buying canned goods and canned drinks (seltzers, sodas, beers, etc.)
➢ About half of the States are approved to receive the additional $300 in unemployment benefits.
➢ J Crew may be back from the dead after getting the greenlight for their reorganization plan, allowing them to emerge from Chapter 11 bankruptcy.
That’s it for this week -- Join us next week for another market update.
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This material is not intended as an offer or solicitation for the purchase or sale of a security or an other financial instrument. Past performance does not guarantee future performance.
All the views expressed are those of Chris Simpson and not those of Sierra Ridge Wealth Management or NEXT Financial Group Inc.
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