March 2, 2021

Market recap

Dow Jones


+603.14 (+1.95%)

S&P 500


+90.67 (+2.38%)



+396.48 (+3.01%)

Virgin Galactic


+$0.91 (+2.44%)

Rocket Mortgage


+$2.47 (+11.30%)

United Airlines


+$0.63 (+1.20%)

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.


Top Story

Two Space Industry Companies Are Ready for Blastoff

Rocket Lab and Spire Global Plan to Go Public Via SPAC Mergers

Yesterday, two space venture companies announced plans to go public via mergers with SPACs. One is Rocket Lab, a company building small rockets to launch satellites. The other is Spire Global, a company which develops satellites.

Several other space-related companies have announced plans to go public in this way, such as BlackSky, which specializes in satellite imagery, and rocket builder Astra. Virgin Galactic (SPCE), Richard Branson’s space flight company, went public through an SPAC deal in 2019.

Merging With NavSight and Vector Acquisition

Spire Global is joining forces with the SPAC NavSight Holdings (NSH). Spire builds satellites which can forecast weather, track ships and airplanes, and perform other tasks. The satellites are small and relatively inexpensive. With its new funding, Spire plans to grow its sales team in order to reach new markets around the world. It also hopes to make acquisitions in the software and data analysis sphere.

Rocket Lab is going public through a merger with Vector Acquisition (VACQ) in a deal that gives the rocket maker a $4.1 billion enterprise valuation. Rocket Lab is the top company building compact rockets to launch satellites. Its current rocket, Electron, has launched into orbit 18 times. It is in the process of developing a second, larger rocket called Neutron.

How a SPAC Works

A SPAC, also known as a special purpose acquisition company or a blank-check company, is formed to raise money through an IPO in order to acquire an existing company. A SPAC has no commercial operations of its own.

There has been an increase in SPACs being used for companies to make their public debuts. SPACs raised over $82 billion in 2020—a record high and a sixfold increase compared to 2019.

What Rising Rates Mean for Mortgage Lenders

Interest Rates Climb from Historic Lows

Interest rates have been historically low the past several years, except for a slight uptick in 2018. The pandemic has pushed them even lower. But last week, mortgage rates climbed to their highest weekly average since August.

For companies like Rocket Mortgage (RKT), which make and sell home loans, climbing mortgage rates can cause falling demand.

Rocket Mortgage’s Predictions

Despite the interest rate uptick, Rocket says it expects its origination volume to stay fairly consistent. Last week, Rocket said it predicts that it will close on about $100 billion of loans this quarter, compared to $107 billion in the fourth quarter of last year.

Investors are also examining how much originators are earning on each mortgage they sell. Rocket shared that its quarter-over-quarter gain-on-sale margin declined from 4.52% to 4.41%. This decline was less than one-third as much as the median drop for mortgage lenders and banks on the whole.

What Rising Rates Mean for People with Mortgages

There are different types of mortgage loans, and what rising rates means will depend on the kind of loan you have.

A fixed-rate mortgage (FRM) has an interest rate that stays the same for the entire life or “term” of the loan, even if it’s 30 years. The rate remains fixed regardless of any changes that might occur in the broader economy.

By its nature, a fixed-rate loan shields you from fluctuating interest rates. As interest rates rise, the cost of borrowing can rise as well. With an FRM, the mortgage rate is locked in for the life of the loan—even if lending rates rise significantly during that period.

An adjustable-rate mortgage (ARM) loan is so named because the interest rate can change over time. In many cases, an ARM loan’s rate will stay the same for a specified period of time, such as five or seven years.

Borrowers with adjustable mortgage loans tend to secure lower initial interest rates than those who use fixed-rate loans. But as lending rates rise, so does the borrower’s payment.

Calculator: How Much Home Can You Afford?

Buying a home is complicated enough—and trying to estimate how much house you can afford based on just the sales price can be even more confusing. This calculator can estimate your total monthly house payment so you can better budget your home buying journey.


Trustpilot Plans a London IPO

Customer Review Platform Sees Growth

Yesterday, Trustpilot announced plans to list its shares in London when it goes public. Trustpilot is a Denmark-based customer review website which hosts over 120 million reviews for businesses in over 100 countries, with its main markets being the US and the UK. The company will sell 25% of its shares and hopes to raise $50 million. It is aiming for a market valuation of about $1.4 billion.

Trustpilot’s revenue hit $102 million last year—a 25% jump compared to the year before. The company is not yet profitable, but it reduced its losses from $22.6 million in 2019 to $12.9 million in 2020.

A Win for the London Stock Exchange

This planned offering will help London cement its role as a financial hub and a home for tech companies post-Brexit. London is competing with exchanges around the world, particularly in Amsterdam and the US, as several European tech companies look toward going public.

Moonpig, a company specializing in personalized eCards and gift deliveries, had a blockbuster IPO in London last month. Food delivery app Deliveroo is expected to launch a multibillion-dollar listing in the city in the upcoming weeks.

Trustpilot’s Post-Pandemic Future

Trustpilot’s popularity has surged during the pandemic. The ecommerce boom has caused both businesses and consumers to rely on the platform more heavily.

Trustpilot uses a “freemium” model, meaning that businesses can use some of its services at no cost, but can upgrade for a monthly fee. Nearly 20,000 businesses pay for these services, like rights to display Trustpilot’s ratings and tools for monitoring customer feedback. Analysts expect that many online shopping habits formed during the pandemic will be here to stay, so Trustpilot and other companies which support the ecommerce industry could be poised for growth.

Not-So-Breaking News

Financial Planner Tip of the Day

“When getting ready to buy a house, after assessing your budget and affordability, you may want to give yourself time to save up for a larger down payment. Buyers who put down less than 20% may end up paying private mortgage insurance, which typically costs between 0.3% and 1.5% of your loan amount annually.”

Brian Walsh, CFP® at SoFi

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