Which one is it Janet!?
Quick Hits From Grit
Happy Friday everyone đ
Welcome to our *NEW* âQuick Hits From Gritâ edition. Every Friday at 11am ET. Highlighting FIVE things you need to know that happened this week with Gritâs Hot take in 60 seconds â°
*as of 4pm ET, 5/6/21
1. MACROWhich one is it Janet!?
On Tuesday morning Janet Yellen said aloud what everyone has been thinking:
âIt may be that interest rates will have to rise somewhat to make sure that our economy doesnât overheat.â
The comments sparked a selloff, particularly tech stocks which suffer most from higher rates. She later clarified:
"I don't think there's going to be an inflationary problem, but if there is, the Fed can be counted on to address [it]."
GRITâS TAKE: Because youâre a genius and subscribe to Grit, you already know how to play this no matter which way it goesâŠhint:(Donât) Fear the Reaper.
2. DEALSWealthsimpleâs new BIG valuation
Millennials are still plowing MONEY into the stock market at a record pace which is great news for fintechs. In March, both Robinhood and eToro announced plans to go public. This week Wealthsimple crashed the party with a star-studded list of +1âs and a new funding round that raised US$610MM, valuing the company at +US$4B. Thatâs 3x their valuation from the fall!
GRITâS TAKE: The valuation might seem crazy, but not when you consider that Robinhood is rumored at USD $40B with 13MM users (compared to 2MM for WS). Nuts that Goldman Sachsâ market cap is only $122B!
3. STOCK MARKETItâs a terrible time to buy a car
If youâre thinking about buying a car: DONâT! April saw a record-high 18.5 million vehicles sold against a 33-day record low inventory. The global semis shortage has hit automakers the hardest and the low supply is driving up prices of all cars, new and used.
GRITâS TAKE: The last year has been great for selling cars and buying car stocks (check out the 1Y returns for 5 top automakers above), but can it continue?
4. COMMODITIESOil prices near 1-year high
Oil prices are up 12% in the last MONTH and 17% over the past quarter. Meanwhile, vehicle miles driven were already back up to pre-COVID levels in March. Now the big iBanks want their employees to start commuting back to the office! What are we, trying to hurt the environment and our wallets at the same time?
GRITâS TAKE:Â No thanks, weâll stick with the Challenger Banks and Fintechs like Square who WORK ON THE INTERNET (zero-emissions) while theyâre wasting the most precious brain cell hours of the day stuck in traffic commuting to the office.
5. ENTERTAINMENTCharlie Munger must be so disgusted right now
Ethereum hit all-time highs for 4 consecutive days and has many talking about a potential âflippeningâ - Ethereum supplanting Bitcoin as the ALPHA cryptocurrency.
Meanwhile, Dogecoin wanted to show it could play with the big dogs too and hit an all-time high of 0.6966 on Wednesday (sooooo close!) putting everyoneâs favorite meme coin up over 12,000% YTD!
GRITâS TAKE:Â Crypto surges already crashed Robinhood once this week, if Elon Musk mentions Dogecoin on SNL this weekend their servers might literally explode.
P.S. Genevieve found $25 in an old Kraken crypto wallet from 2017. She bought Dogecoin. Hedging her bets that thereâs a 0.000001% chance Dogecoin becomes the worldâs reserve currency ; )
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