The Week Ahead on Wall Street
The February Empire State Manufacturing Index is released today, which is a metric based on a survey of about 200 manufacturing executives in New York State. In January 27% of those surveyed said conditions had improved, while 23% said conditions were worse than the previous month.
Tomorrow will be an important day for economic data with the release of the January Producer Price Index, January industrial productions, January capacity utilization, December business inventories, and the February National Association of Home Builders Index. January retail sales will also be released. Retail sales dropped in December as a result of more stringent restrictions on restaurants and shopping centers. FOMC meeting minutes will also be released tomorrow and investors will be parsing through them for clues about the committee’s stance on monetary policy and upcoming decisions that could impact interest rates.
On Thursday January housing starts, January building permits, the January Import Price Index, and the February Philadelphia Fed Manufacturing Index will be released. Initial jobless claims will also be reported. During the week ending February 6, 793,000 Americans filed new unemployment claims. Though this is still above pre-pandemic jobless levels, it was the lowest figure seen in five weeks.
To round out the week, on Friday the February Markit manufacturing PMI (flash), the February Markit services PMI (flash), and January existing home sales will be released. Existing home sales in 2020 reached their highest levels since 2006.
Today Palantir Technologies (PLTR), a company which builds software for businesses dealing with complex and sensitive data, will report its earnings. The company was private for 17 years before it went public through a direct listing in September 2020. Since then its shares have been volatile, but they are up 52% so far this year.
Tomorrow Shopify (SHOP) hands in its report card. The ecommerce platform has seen substantial growth during the pandemic. Last week it announced that it will partner with Facebook (FB) to give merchants on Instagram and Facebook access to Shop Pay, its payments tool.
On Thursday, Walmart (WMT) will share its latest results. This week the retail giant will begin administering COVID-19 vaccines at more than 1,000 Walmart and Sam’s Club pharmacies in 22 states. According to the company, 90% of Americans live within 10 miles of a Walmart, so it will be able to distribute vaccines to people in communities who might not be close to healthcare facilities.
Lastly, on Friday Deere & Co (DE) reports earnings. Prices for corn, soybeans, and other commodities have been surging in recent weeks as a result of dry weather and strong demand from China. This may cause Farmers to invest in new machinery from John Deere.
The Week Ahead at SoFi
Check out this week’s upcoming events, and be sure to reserve your seat in the SoFi app!
The Solar Industry's Time to Shine
Solar Stocks Climb
A number of stocks in the solar power industry have hit all-time highs in recent weeks. There have also been a number of recent IPOs in the sector and many investors seem hopeful that more solar-related companies will make their public debuts soon. This boom is happening for a variety of reasons.
In both Europe and the US, governments are eager to invest in building green electric grids and transitioning to clean energy systems. Additionally, sustainability-focused indexes are becoming increasingly popular with investors. Also the cost of solar energy has fallen sharply in recent years, which makes it more attractive to consumers than some other, more expensive clean energy solutions.
Deals in the Solar Sector
Investors are piling into a variety of companies within the solar industry. For example, Tennessee-based solar power components maker Shoals Technologies Group (SHLS) had a successful IPO in late January.
Meanwhile Sunlight Financial LLC, a company which lends money to homeowners to install rooftop solar panels, is making plans to go public through a merger with a SPAC backed by Apollo Global Management. Solar lending has surged in recent months. Sunlight has originated over $3.5 billion in loans.
There have been spikes in the popularity of solar investments before. Several companies in the space went public in 2014 and 2015. But SunEdison Inc, which used to be the world’s largest renewables company, went bankrupt in 2016. Following these events, investors were wary of the sector, and no solar companies made public debuts between late 2016 and early 2019.
Some investors say that if solar companies prioritize growth over profitability now, they could suffer a similar rise and fall. However, others argue that market conditions are different than they were in 2016, and solar-focused companies will continue to shine.
Audio-Focused Social Media Gains Popularity
Looking for New Ways to Connect
Social media platforms focused on audio are gaining attention from both users and investors. Many consumers are experiencing “Zoom fatigue,” meaning they are tired of looking at screens all day. As a result, podcasts, audiobooks, and audio chat platforms are gaining popularity.
After nearly a year of social distancing measures, people are hungry for ways to connect with others. Many feel that speaking and hearing another person’s voice offers a deeper virtual connection than simply typing and reading messages.
One audio platform generating significant buzz is Clubhouse. The app allows users to make a virtual room for a discussion about a topic featuring specific speakers. Users can find everything from discussions about bitcoin to guided meditations to stand-up comedy in these rooms. Celebrities like Elon Musk, Drake, and Lindsay Lohan have used Clubhouse to connect with listeners.
Monthly downloads of Clubhouse hit 2.4 million in January—up from just 2,000 in September. The app raised $100 million in funding last month, bringing its valuation to $1 billion less than a year after it launched. Agora (API), the Shanghai-based software company which powers Clubhouse, has also seen a boom in investor interest. The company’s shares have climbed more than 150% since mid-January.
Competition on the Horizon
Larger social media companies are taking note of Clubhouse’s success. Twitter (TWTR) recently launched a voice feature for tweeting, and is in the process of experimenting with an audio chat-room feature called Spaces. Facebook (FB) has also said it is doing preliminary tests of audio features.
Emerging social media companies with unique offerings face several difficult challenges. The majority of advertising money still goes to established companies like Facebook (FB) and Google (GOOGL). Additionally, companies with new ideas tend to be concerned about social media giants copying their business models. Facebook, which has been known to create features that are similar to rival platforms, recently came under regulatory scrutiny for these practices. The outcome of these discussions could impact Clubhouse and the future of audio social networks in general.