Here are five things you must know for Monday, Jan. 25:
1. — Stock Futures Mixed as Investors Assess Stimulus Talk
Stock futures were mixed Monday as hopes remained high that the Biden White House will deliver another round of stimulus for the struggling U.S. economy and as investors prepared for a week heavy with tech earnings.
Contracts linked to the Dow Jones Industrial Average fell 6 points, S&P 500 futures gained 10 points and Nasdaq futures were up 121 points.
President Joe Biden has been pushing for passage of a $1.9 trillion pandemic relief proposal and officials in his administration on Sunday tried to head off Republican concerns that the package was too expensive, Reuters reported.
Lawmakers from both parties agreed that getting the Covid-19 vaccine to Americans should be a priority, Reuters reported, but some have been focused on a smaller plan targeting vaccine distribution.
Republican Sen. Susan Collins, for one, said it “seems premature to be considering a package of this size and scope.” She agreed additional funding was needed for vaccine distribution, but in a “more limited” bill, Reuters reported.
Stocks finished mixed Friday as a spike in coronavirus infections and the possibility of stricter lockdowns offset expectations of more economic support from the Biden administration. The Nasdaq closed at a record, up 0.09% to 13,543.
2. — This Week’s Calendar: Tech Earnings, Federal Reserve Meeting
Kimberly-Clark (KMB) – Get Report will be reporting earnings Monday with companies such as Tesla (TSLA) – Get Report, Apple (AAPL) – Get Report, Microsoft (MSFT) – Get Report and Facebook (FB) – Get Report reporting later this week.
Other heavyweights reporting this week include AT&T (T) – Get Report, Johnson & Johnson (JNJ) – Get Report, Advanced Micro Devices (AMD) – Get Report, General Electric (GE) – Get Report, Lockheed Martin (LMT) – Get Report, Boeing (BA) – Get Report, Starbucks (SBUX) – Get Report, McDonald’s (MCD) – Get Report, Chevron (CVX) – Get Report, Caterpillar (CAT) – Get Report and Eli Lilly (LLY) – Get Report.
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The U.S. economic calendar on Monday is light but later in the week will see releases on Consumer Confidence, Durable Goods Orders, Jobless Claims and Gross Domestic Product.
The Federal Reserve will meet Tuesday and Wednesday, with an announcement on interest rates expected at the conclusion of the meeting. The central bank isn’t expected to move on interest rates and has signaled it will keep them near zero through 2023.
3. — House Speaker Nancy Pelosi Buys Tesla Options
Speaking of Tesla, Nancy Pelosi, the speaker of the U.S. House of Representatives, and her husband Paul, a businessman and private investor, recently bought stock options in the electric vehicle company.
Pelosi on Dec. 22 bought 25 call options on Tesla, with a strike price of $500 and an expiration date of March 18, 2022, according to a government filing. The transaction’s value was $500,001 to $1 million.
“Pelosi and her husband love taking long-term options positions,” wrote Davemanuel.com, who reported earlier on the transaction, noting that Tesla closed at $640.34 on the day of purchase, “which means that the per contract cost was likely in the range of $300-$330 per contract, as Tesla’s options contain a very high amount of extrinsic value (time and volatility).”
Telsa was added to the S&P 500 shortly before Pelosi’s purchase.
The stock likely will benefit more from the nation’s “blue wave,” according to a recent note by analyst Dan Ives of Wedbush.
“A Biden White House and Blue Senate is a very bullish political backdrop and a potential ‘game changer’ for Tesla and the overall (electric vehicle) sector in the US, with a more green-driven agenda now certainly in the cards over the next few years,” wrote Ives, adding that “a doubling down” on EV tax credits and other consumer incentives and government initiatives could help Tesla, as well as General Motors (GM) – Get Report, Fisker (FSR) – Get Report and other names.
Tesla was rising 1.67% to $860.80 in premarket trading Monday. Analysts at Baird on Monday lifted their price target on Tesla to $728 a share from $488, saying “bias for the stock remains to the upside.”
4. — Korean Hedge Fund ‘Less Bullish’ on GameStop
Must Asset Management, the South Korean hedge fund that made a bold bet on GameStop (GME) – Get Report almost a year ago, has turned less bullish on the videogame retailer’s stock, Bloomberg reported.
Kim Doo-yong, CEO at Must Asset Management, said the stock’s high volatility and its surge of more than 10 times since his last interview with Bloomberg in March 2020 prompted his less rosy view.
“We have become less bullish and turned more neutral on GameStop,” Kim said in an interview with Bloomberg on Monday. “This stock will continue to be very volatile and unpredictable in the short term.”
Seoul-based Must Asset Management had a 4.7% stake in GameStop as of April 2020, according to Bloomberg data, making the Korean fund one of the biggest investors in the company.
Kim declined to comment for Bloomberg on the fund’s current holding of GameStop, which soared more than 51% on Friday to a record closing high of $65.01. GameStop is one stock that has become a favorite of retail investors during the coronavirus pandemic, particularly Reddit-charged day traders, Bloomberg noted.
In premarket trading Monday, the stock was skyrocketing another 42.44% to $92.60.
5. — Tom Brady to Play in His 10th Super Bowl
Tom Brady is headed to his 10th Super Bowl, and his first with Tampa Bay, after the Buccaneers beat the Green Bay Packers, 31-26, on Sunday in the NFC Championship game.
Brady has won six Super Bowl titles, all with the New England Patriots, the team he left last offseason.
Brady’s Buccaneers will play the Kansas City Chiefs in Super Bowl LV on Feb. 7. The Chiefs defeated the Buffalo Bills, 38-24, in the AFC Championship.
The Super Bowl will be played at Raymond James Stadium in Tampa, Florida, meaning the Buccaneers will be the first team to play a Super Bowl in their home stadium.