Friday,
September 10, 2021

Market recap

Dow Jones

34,879.38

-151.69 (-0.43%)

S&P 500

4,493.28

-20.79 (-0.46%)

Nasdaq

15,248.25

-38.38 (-0.25%)

Amazon

$3,484.16

-$41.34 (-1.17%)

United Airlines

$46.58

+$1.05 (+2.31%)

Ford

$12.76

-$0.27 (-2.07%)

Amid evolving news surrounding COVID-19 and the economic reopening, your financial needs are our top priority. For more information,click here.

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Top Story

Amazon Gears up to Sell Fire TVs

Amazon Expands its Private Label Empire

Amazon (AMZN) is entering the television market, announcing two branded Fire TVs which will include Alexa, its voice assistant. This marks Amazon’s latest push to expand its private label business which already includes apparel, groceries, home decor, and other items.

Amazon is pricing its two new TVs competitively. The Fire TV Omni Series is starting at $409.99, and the Amazon Fire TV 4 Series will start at $369.99. Consumers can purchase the TVs in October from Amazon or through Best Buy (BBY).

TVs Are a Low-Margin Business

By launching branded TVs, Amazon is entering an area of consumer electronics which is known for low margins. Apple (AAPL) has looked at the market for years, but so far has only launched a streaming device and video streaming service, Apple TV+. Low margins likely will not deter Amazon, which has shown its willingness to chase market share at the expense of profits in other areas of its business.

Amazon’s Fire TV operating system has been in Toshiba and Best Buy brand TVs for several years. Amazon said it will continue to maintain its partnerships despite launching competing products. On Thursday the online retailer also announced new Fire TVs from Toshiba and Pioneer.

Competition Heats Up

Amazon wants to differentiate its TVs by equipping them with far field voice controls. This technology enables users to ask Alexa questions without a remote. The TVs will range in size from 43 to 75 inches and boast 4K resolution. Later in the year Amazon plans to roll out an update which will let customers control smart devices in the home via a dashboard on the TV.

Amazon’s FireTV streaming sticks are currently leading in the industry, but rival Roku (ROKU) is closing in. This has prompted Amazon to spend more money on its streaming service and smart devices. It will be interesting to see how consumers respond to Amazon’s latest big initiative.

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.


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US Airline Operators See Impact of Delta Variant

Rising Case Numbers Slows Airline Industry Recovery

Recovery for the airline industry appears to be slowing, at least for now, as rising COVID-19 cases dampen consumers’ interest in flying. American Airlines (AAL), Delta Air (DAL), United Airlines (UAL), Southwest Airlines (LUV), and JetBlue (JBLU) all reported a slowdown in bookings and an increase in cancellations during August.

Most analysts did not expect this trend for airlines. Of the industries hit hard by the pandemic, airlines were poised to have a quick recovery due to pent-up demand for travel. Earlier this summer, airlines could barely handle the demand from vaccinated travelers ready to vacation again. However, rising cases of COVID-19 have caused many consumers to rethink their travel plans.

Airlines Reduce Capacity

United Airlines is among the airline operators reducing capacity for the rest of 2021 to match current demand. United also scaled back its profit forecasts for the third quarter and warned that it will likely lose money in the last quarter of the year if demand stays at its current level.

Meanwhile, Southwest Airlines is seeing losses in its current quarter as a result of cancellations and lower bookings. Sales in August were at the low end of its target, while weaker bookings from travelers have continued for September and October. The airline also expects flying capacity in the fourth quarter to be 5% lower than it was two years ago.

Looking Ahead

Though it has been an unexpectedly difficult period for airlines, they do not expect the downturn to be permanent. United said in a recent filing that the current increase in COVID-19 cases has had less of an impact than previous increases and will likely be temporary. Once cases peak, United expects bookings to increase again. Meanwhile, Delta Airlines said it saw bookings stabilize in the past two weeks. It expects that in about 90 days, travel will pick up again.

After more than a year and a half of the pandemic, airlines have practice dealing with fluctuating demand. While the Delta variant is slowing down the industry’s recovery, airline operators are optimistic that this will be temporary.

Friday Fundings: Wave, Snyk, and Scalapay

Mobile Money Startup Raises $200 Million

Wave, a mobile money provider based in the US and Senegal, raised $200 million in venture funding. The Series A round, which was led by Sequoia Heritage, Founders Fund, Stripe, and Ribbit Capital, values Wave at $1.7 billion. It marks the biggest Series A round for a sub-Saharan Africa startup in history.

The investment comes as the mobile money market in sub-Saharan Africa is booming. So far in 2021, $500 billion has moved between 300 million mobile money accounts in the region. Proceeds from the fundraising round will be used to expand in Senegal and Ivory Coast and to grow the company’s headcount of product developers, engineers, and business support staff. Wave also wants to enter new markets, including Uganda.

Security Scan SaaS Obtains a $8.5 Billion Valuation

Snyk, a security scanning platform for developers, raised $530 million in a Series F round, giving it a valuation of $8.5 billion. Snyk raised $300 million in new capital, with investors buying existing shares for the remaining $230 million. The startup's Software-as-a-Service platform enables developers to spot security holes and license violations in their code. The platform is used by developers at Google (GOOG), Intuit (INTU) , and Salesforce (CRM), among others.

What makes Snyk unique is its ability to spot problems in real time as developers write code. Snyk plans to use proceeds from the fundraising round to develop new products and enhance its existing technology.

BNPL Startup Raises $155 Million

Scalapay, a buy-now, pay-later startup out of Italy, raised $155 million in funding. The Series A round was led by Tiger Global and included participation from Baleen Capital and Woodson Capital. Scalapay is among the BNPL startups riding the popularity of paying for online items in interest-free installments. Earlier this week, PayPal (PPYL) paid $2.7 billion for Paidy, a Japanese BNPL startup.

Scalapay plans to use the funding to expand its headcount and operations. It will also use the money to scale in international markets and to land merchants in luxury, fashion, and travel.

Not-So-Breaking News

  • Sea, an online gaming and ecommerce company which counts Tencent (TCEHY) as a backer, is raising $6.3 billion in what amounts to the largest offering of the year. Sea is selling 11 million shares valued at around $3.8 billion. The company will also issue $2.5 billion of equity-linked debt.

  • Ford (F) is exiting India, ending vehicle production in the country and terminating thousands of workers. The move, which will cost Ford $2 billion, is part of its turnaround plan. Ford has been losing money in India during the past decade.

  • Walmart (WMT) is getting rid of quarterly bonuses in response to its move to raise hourly wages. The retailer said the bonuses, which Walmart paid out for years, will stop at the end of January. Last week Walmart raised its minimum wage to $12 per hour.

  • Tencent and Netease are facing increasing pressure from Chinese regulators. This is weighing on their stocks. Chinese regulators held meetings with gaming companies to remind them of the new rules which will restrict how much time children in China can spend playing video games.

  • Moderna (MRNA) is developing a two-in-one vaccine that would provide a booster for COVID and protection from the seasonal flu. Moderna’s announcement sent its shares higher.

  • Are you ready to make an offer on a house? Here’s some tips on what you need to know about making an offer on a house that will help make you an informed buyer.

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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