January 19, 2021

Market recap

Dow Jones


-177.26 (-0.57%)

S&P 500


-27.29 (-0.72%)



-114.14 (-0.87%)



-$2.88 (-0.58%)



-$13.63 (-2.58%)

JP Morgan Chase


-$2.53 (-1.79%)

Amid evolving news + uncertainty surrounding COVID-19, your financial needs are our top priority. For more information on COVID-19 and your finances click here.


Hey SoFi members,

As part of Congress’s latest coronavirus stimulus package, the Paycheck Protection Program (PPP) was relaunched with an additional $284 billion for loans to small businesses. Select small business owners can now apply for this funding.

Lantern by SoFi provides a marketplace where eligible small businesses can match to one of dozens of qualified lenders based on lender capacity and program eligibility. Through Lantern by SoFi’s single application process, business owners and operators have access to an easy way to compare offers across a set of financial solutions, including those that are part of the SBA Paycheck Protection Loan Program (PPP).

Feel free to share this information with a small business owner you know who could use the help during this uncertain time.


The SoFi Team

Top Story

The Week Ahead on Wall Street

Economic Data

No economic data is scheduled for release today.

Tomorrow, which is also Inauguration Day for President-elect Joe Biden, the January National Association of Home Builders Index will be released.

On Thursday initial jobless claims will be published, along with December housing starts, December building permits, and the January Philadelphia Fed Index. Homebuilding and permit issuance both increased steadily in November, underscoring the housing market’s strength despite slowing overall economic recovery. First-time jobless claims for the week ending January 9th surged to 965,000. This figure was much higher than economist expectations of 800,000. The total number of people receiving unemployment benefits was down to 18.4 million, but that is still far higher than pre-pandemic levels. Investors will be watching to see if this disheartening trend continues.

On Friday January Markit manufacturing PMI, January Markit services PMI, and December’s existing home sales will be released. In December the manufacturing Purchasing Managers Index (PMI) hit a 15-month low—a sign of trouble for the broader US economy. Rising tariffs were cited as a manufacturing cost that slowed growth.


Today Netflix Inc (NFLX) will release earnings for the holiday quarter. Investors will likely be most interested in the streaming service’s subscriber growth. During the first and second quarters of 2020, Netflix added 15.8 million and 10.1 million subscribers respectively as most of the world sheltered in place due to coronavirus. If the company can meet management’s guidance this quarter, it will be a record year for the streaming service. Bank of America Corp (BAC), Goldman Sachs Group Inc (GS), Interactive Brokers Group Inc (IBKR), and Halliburton Co (HAL) also report.

Tomorrow Procter & Gamble Co (PG) is scheduled to release its latest results. Procter & Gamble is the world’s second-largest advertiser, surpassed only by Amazon (AMZN). The company has made significant changes to its marketing strategies in order to drive ecommerce sales. UnitedHealth Group Inc (UNH), Morgan Stanley (MS), Bank of New York Mellon Corp (BK), and Discover Financial Services (DFS) are also reporting.

On Thursday Intel Corp (INTC) will release earnings. Last week at CES, Intel unveiled a preview of its next chip release—a 12th-generation Alder Lake. The chip could help Intel catch up to Apple’s (AAPL) M1 CPU. Union Pacific Corp (UNP), International Business Machines Corp (IBM), and Travelers Companies Inc (TRV) are also scheduled to report.

Finally Ally Financial (ALLY) will release earnings on Friday. Ally outperformed the general market in 2020 and ended the year up by 20%. As the economy regains strength in 2021, analysts expect Ally’s car loan business to benefit. Schlumberger NV (SLB), New Oriental Education & Technology Group Inc (EDU), and Kansas City Southern (KUS) are also reporting.

The Week Ahead at SoFi

If you haven’t attended a virtual event in 2021, now’s the time. Join us this week to discuss ageism in the job search, learn from the leaders of tomorrow, and more. Register for upcoming events in the SoFi app, or catch up on past events in our YouTube channel.


All About the Latest Paycheck Protection Program (PPP)

Background on the Bill

After months of negotiations, the $900 billion pandemic stimulus package bill was passed into law on December 27. The new law provides another round of funding—$284 billion—to the Paycheck Protection Program (PPP), a key small-business relief program that closed in August. The fresh injection of cash for eligible small businesses across the country will offer an important lifeline to those struggling to stay afloat. Due to business interruptions caused by the COVID-19 pandemic, an estimated 100,000 businesses had permanently closed by the end of August.

Created by the CARES Act in the spring of 2020, the PPP has been heavily criticized. One major issue was the fact that it awarded a significant portion of the funds to big companies. Other flaws included inflexibility when it came to the use of loans, confusing terms for forgiveness, and an overall lack of transparency. Over the past year, lawmakers have amended the rules through a number of acts, and the latest bill tries to correct more problems.

The PPP reopened for first-time borrowers on January 11 and for second-time borrowers on January 13 initially to community financial institutions and other lenders that help the underserved. It opened for small lenders on January 15 and all other lenders today, on January 19. The SBA has provided updated guidelines for the program’s latest round.

Who Is Eligible?

First Time Borrowers

For first-time borrowers—those who didn’t get a loan from the first two rounds of PPP—the rules for who’s eligible are essentially the same. However, the types of businesses that can qualify for PPP loans have been expanded.

Out of the $284 billion available in loans, $35 billion is earmarked specifically for first-time borrowers who have a maximum of 500 employees. Another $15 billion is set aside for businesses with a maximum of 10 employees or for loans less than $250,000 to those that operate in low-or-moderate income neighborhoods.

Here are some of the key guidelines:

•  Business had to have been in operation on Feb. 15, 2020 or earlier.

•  Employers can have a maximum of 500 employees.

•  The applicant can be an independent contractor, self-employed individual, or sole proprietor.

•  Tax-exempt nonprofits are now eligible.

•  Housing cooperatives or destination marketing organizations with no more than 300 employees are now eligible.

•  News organizations with no more than 500 employees per location are now eligible.

Second-Time Borrowers

Those who borrowed from the PPP in one of the earlier rounds can qualify for another loan. The SBA’s guidelines released on Jan. 6 provided greater detail on “second draw loans” from the PPP. Similar to the provisions for first-time borrowers, $25 billion has been set aside for businesses with a maximum of 10 employees or for loans less than $250,000 to businesses that operate in low- or moderate-income neighborhoods.

Meanwhile, the SBA rules narrowed the businesses that can participate in second draw loans. Here are highlights of the terms:

•  The employer can have no more than 300 employees.

•  The business has to have used up all funding from the first loan on eligible expenses by the disbursement date of the second loan.

•  Applicants must now show that gross receipts from any quarter in 2020 were 25% less than the gross receipts in the same quarter in 2019. For businesses that were in operation all four quarters, a reduction in annual receipts of 25% or greater in 2020 vs. 2019 also qualifies.

Minority, Under-served, Veteran, and Women-Owned Businesses

Small businesses owned by minorities may have had difficulty obtaining PPP loans even if they would have qualified, research has shown. The new bill tries to address this problem by allocating $15 billion for first-time and second-time borrowers who are borrowing from community financial institutions. Another $15 billion is reserved for loans made by insured depository institutions, credit unions and farm credit system institutions with assets less than $10 billion.

How to Apply for PPP

The deadline to receive a PPP loan from this latest round of funding is March 31, 2021. Here is a list of online or non-bank lenders, who offer speed and convenience when it comes to lending.

The list also includes fintech companies, such as Lantern by SoFi, that are partnering with lenders to facilitate PPP loans. It’s important to check the guidelines on SBA loans, as well as consult with professionals, especially for matters related to taxes. PPP loan applications via Lantern can be submitted to the SBA as of January 15, 2021. Get started at LanternCredit.com.

Semiconductor Makers Face Chip Shortage

Scarcity Pushes Prices Higher

The semiconductor industry is experiencing a shortage in chips used in cars, smartphones, and other electronic devices. The issue is multifaceted, and involves evolving product offerings, increased demand for high-powered electronics, supply chain delays, and coronavirus-related factory shutdowns. These difficulties have resulted in delayed orders, rising prices rising for some semiconductors, and even pauses in auto production. Despite logistical difficulties, analysts say there was a record amount of investment in the semiconductor industry last year and the sector is headed for even more growth. Analysts expect to see 6% growth in the chip industry in 2021—a record high.

For consumers, the increased demand and limited supply could eventually translate to higher prices for devices powered by semiconductors. There could also be delays in getting these products to consumers as shortages work their way down the supply chain.

Factors Behind the Shortage

The coronavirus pandemic has caused a boom in demand for laptops and other personal electronics. Remote work has also meant a spike in demand for cloud-computing services and the data centers that power them, which also depend on semiconductors. Concurrent with the shift in work habits has been the release of 5G smartphones, which also call for more powerful chips.

As demand for semiconductors rises, suppliers are facing a variety of issues. The United States placed restrictions on Chinese telecom company Huawei Technologies, the largest smartphone seller in the world. Back in August Huawei said it was already running out of chips for its phones due to US sanctions. Meanwhile, chipmaker Nvidia (NVDA) has been facing the opposite issue—the company is unable to make its new chips fast enough to meet demand.

Manufacturers Stockpile, Compete for Limited Capacity

The car industry has been particularly hard-hit by the chip shortage. Last week, Ford Motor Co. (F) said it would idle a Kentucky factory due to chip shortages, and other carmakers had to change their production plans. General Motors (GM) requested that its suppliers stockpile at least one year’s worth of chips to combat shortages.

Chip makers and brokers are warning companies that the shortage could last through the end of 2022 as they work to stabilize supply amidst overwhelming demand and supply chain issues. Investors in the semiconductor market as well as in the auto and tech industries will be eager to see how the next year unfolds.

Not-So-Breaking News

Financial Planner Tip of the Day

“There are two well-known, go-to ways to pay off debt by focusing on one debt at a time. The snowball method is where you focus on paying off your debts in order from smallest balance owed to largest by allocating extra money to those smaller balances, while still keeping up with minimum payments on other debt. The main benefit is seeing some of your debt paid off sooner, because you started with the smallest debt.”

Brian Walsh, CFP® at SoFi

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