Monday,
February 22, 2021

Market recap

Dow Jones

31,494.32

+0.98 (+0.00%)

S&P 500

3,906.71

-7.26 (-0.19%)

Nasdaq

13,874.46

+9.11 (+0.07%)

Uber

$58.39

-$0.61 (-1.03%)

Pfizer

$34.44

-$0.12 (-0.35%)

Moderna

$174.74

+$5.17 (+3.05%)

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.

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Top Story

The Week Ahead on Wall Street

Economic Data

January leading economic indicators are released today. This figure is meant to forecast the health of the economy in the future. Between November and December, the metric was up 0.3%.

Tomorrow look for the December S&P CoreLogic Case-Shiller Home Price Index, the December FHFA Home Price Index, and the February Consumer Confidence Index. Consumer confidence climbed slightly in January after falling in December.

January New Home Sales will be released on Wednesday. A total of 5.64 million homes were sold in 2020—a 5.6% increase from 2019.

On Thursday January durable goods orders, January core capital goods orders, and the January Pending Home Sales Index will be published. Initial jobless claims will also be released. Claims increased to 861,000 last week after several weeks of declines.

On Friday January personal income, January consumer spending, January trade in goods, February Chicago PMI, and the final February University of Michigan Consumer Sentiment Index will be published. January Core inflation will also be released. This measures changes in the costs of goods and services but does not include food and energy.

Earnings Reports

Today Royal Caribbean Cruises (RCL) will report its latest results. Investors will be listening to the earnings call to see if the company’s leadership shares any news about plans to sell ships, upcoming test cruises, and updates about discussions with the CDC.

Tomorrow look for an earnings report from Home Depot (HD). The world’s largest retailer has seen demand for its products boom over the past year. People have turned to Home Depot during the pandemic as they work on DIY projects to pass the time at home.

On Wednesday NVIDIA (NVDA) hands in its report card. The company builds chips which are used mainly for data centers and in video game systems. The ongoing remote work trend and the video game boom has caused demand for NVIDIA’s products to rise.

Salesforce (CRM) will report its earnings on Thursday. In late 2020, Salesforce announced a decision to buy business communication platform Slack for $27 billion. Last week, the Department of Justice requested additional information from both companies as it evaluates the deal. Salesforce says it does not expect regulatory procedures to delay the acquisition, which is scheduled to close during the quarter ending July 31.

On Friday DraftKings (DKNG) hands in its report card. The sports betting platform has reported strong revenue growth over the past three quarters but has not yet turned a profit. DraftKings currently operates in 12 states after recently launching operations in Virginia.

The Week Ahead at SoFi

Wrap up February on an ambitious note with four events—from happy hours about finding your dream job, to real conversations with career coaches. Reserve your space for upcoming events in the SoFi app!


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Uber Loses a Legal Battle in the UK

UK Rules that Uber Drivers Are Employees, Not Contractors

The UK’s supreme court unanimously decided to uphold a ruling that Uber (UBER) drivers are employees, not independent contractors. A legal battle between the UK government and Uber about this has been ongoing since 2016.

This decision could have sweeping implications for Uber’s business in the UK as well as for the country’s gig economy as a whole, which employs an estimated 5.5 million people. There are more than 40,000 Uber drivers in the UK, making it Uber’s largest European market.

Arguments on Both Sides

Supporters of the UK court’s decision say Uber drivers are entitled to basic employment rights like a minimum wage and holiday pay. For many people, driving for Uber is their primary source of income and they do not have protections and benefits from another employer.

Uber argues that it is not an employer, but more like an agency which connects drivers and passengers. The company claims most of its drivers appreciate the flexible lifestyle that driving for Uber provides. It also argues that its business model allows it to keep costs low for riders.

Comparisons to Proposition 22 in California

The battle in the UK echoes Uber’s fight against Proposition 22, a proposed California law which would have required Uber, Lyft (LYFT), and other companies to treat gig-workers as employees. The difference is that the bill did not pass in California, and these companies continued operating with their same model. In the UK, however, Uber and other companies employing gig-workers will need to make significant changes.

The UK’s verdict technically only impacts the 25 Uber drivers who sued the company in 2016, but it sets an important precedent for other cases. Uber says it is seeking input from its UK drivers in order to “understand the changes they want to see.” Drivers, riders, and investors will be eagerly waiting to see what is down the road for Uber in the UK.

The Pandemic’s Impact on the Vaccine Industry

Smaller Vaccine Companies Gain Ground

The COVID-19 pandemic will likely cause long-lasting changes for the vaccine industry. For years, four main publicly traded companies dominated the industry, selling billions of dollars worth of vaccines each year. Those companies were Pfizer (PFE), Merck (MRK), GlaxoSmithKline (GSK), and Sanofi (SNY).

As the race to create and then distribute a COVID-19 vaccine unfolded, other companies like Moderna (MRNA) and Novavax (NVAX) gained power in the space. These companies have been more nimble than some of their larger counterparts. They were able to ship their vaccine doses directly to government warehouses and did not have to hire large sales forces.

How the Vaccine Market Differs From Other Healthcare Markets

The Biden administration said that the US will have 600 million total doses of the Moderna and Pfizer vaccines by July, which will be enough to immunize most of the population. Investors are now beginning to look ahead and think about what distribution of vaccines for COVID-19 and other illnesses will look like after this milestone is achieved.

The market for vaccines is different than the market for other drugs because it is not generally driven by physician or consumer choices. Patients usually do not have a choice about which vaccine they receive for the flu or other illnesses. Vaccine companies make money from large contracts and compete on price. They do not typically compete for attention from individuals.

New Technologies for Vaccine Development

The tools available to vaccine developers have also been changed as a result of the pandemic. Companies have found new ways to employ messenger RNA technology, viral vector technology, and other methods of vaccine development. These achievements could accelerate the process of making new vaccines in the future.

There are still hurdles to overcome in the process of distributing COVID-19 vaccines around the world. But there is light at the end of the tunnel, and the advancements that have taken place during the pandemic will have far-reaching effects on vaccine development in the future.

Not-So-Breaking News

Financial Planner Tip of the Day

“If you want to build savings into your monthly financial plan, but can’t imagine how, you have to begin by tracking your spending. Identify areas that you can cut back in so that you are then able to re-allocate those funds to your future.”

Brian Walsh, CFP® at SoFi

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