Global Overview
EV Companies to Benefit from Infrastructure Plan
President Joe Biden is set to unveil his $2 trillion infrastructure plan in the steel town of Pittsburgh today. The biggest beneficiaries should be electric-vehicle makers and clean-energy providers. Biden’s plan includes additional incentives to buy electric vehicles in the form of tax credits and rebates.
A new all-electric Volkswagen ID.4 starts at about $40,000 but qualifies for a $7,500 tax credit, effectively wiping almost 20% off its purchase price. Tesla, however, no longer qualifies for the current federal tax credit because it has sold too many vehicles. Wall Street expects Biden’s plan to eliminate that cap according to Barrons.
Ambition in Infrastructure
President Joe Biden’s $2.3 trillion proposal to upgrade the nation’s infrastructure faces challenges both from some moderate Democrats, who want the president to reinstate the state and local tax deduction, and Republicans, who oppose paying for the bill with tax increases.
To pay for the bill, Biden wants to increase corporate taxes from 21% to 28% and require companies to pay at least a 15% tax on income. It would take 15 years for those tax increases to cover the proposed cost of the bill.
Capital Markets
Equities
| PX Last | 1W | YTD | |
|---|---|---|---|
| United States | |||
| S&P | 4 128.80 | 2.98% | 9.92% |
| NASDAQ | 13 480.11 | 5.42% | 5.27% |
| Europe | |||
| Euro Stoxx 50 | 3 945.96 | 2.05% | 9.51% |
| FTSE 100 | 6 895.37 | 1.24% | 4.46% |
| DAX | 15 107.17 | 2.43% | 8.66% |
Deliveroo Did Not Deliver
Shares of food delivery company Deliveroo tumbled 30% in the first hours of their first day of trading in London despite having been priced at the lowest end of the range, underlining investors’ worries about the profitability of gig- economy companies.
Several institutional investors had declined to take part in the IPO, citing concerns about the company’s governance or the way its self-employed drivers or cyclists are compensated.
Exploring the Space with ARK
Cathie Wood’s ARK Space Exploration & Innovation exchange-traded fund finally launched. The ETF dipped about 1% on its first day of trading. The ETF is the eighth fund from Wood’s ARK Investment Management. The firm’s flagship ARK Innovation ETF was a standout in 2020, returning 153% and trouncing the S&P 500 index.
The space ETF’s top holdings include Trimble, which specializes in things like geospatial, laser, and optical technologies; defense and aerospace names like Kratos Defense & Security Solutions and L3Harris Technologies; and Komatsu, a multinational company from Japan that manufactures construction and mining equipment.
Private Equity & Venture Capital
Round Secured by Plaid
Fintech provider Plaid has secured $425 million in Series D funding led by Altimeter Capital. The deal comes less than three months after the company ended a planned takeover by Visa due to an antitrust lawsuit from the Department of Justice.
Most merger targets try to avoid antitrust challenges, but Plaid benefited from the collapsed deal. The new financing values Plaid at $13.4 billion, according to a PitchBook estimate—more than 2.5 times the $5.3 billion Visa agreed to pay for the company in January 2020.
Biotech To the Rescue
As the world battled through the pandemic, VC investment in biotech and pharma thrived in 2020. The industry saw $28.5 billion invested across 1,073 deals, a 60.5% year-over-year increase, as investors recognized the importance of vaccine development.
VC-backed biotech and pharma financings are expected to remain strong this year. The IPO market for VC-backed biotech companies saw $11.5 billion raised across 73 biotech public listings in 2020 according to PitchBook.
Commodities & Digital Assets
| PX Last | 1 Week | YTD | |
|---|---|---|---|
| Brent Crude | 65.46 | 0.51% | 25.21% |
| Gold | 1 729.70 | -0.99% | -9.24% |
| BTC/USD | 60.013 | 3.81% | 104.75% |
Crypto Payments are Here
Visa Inc said on Monday it will allow the use of the cryptocurrency USD Coin to settle transactions on its payment network, the latest sign of growing acceptance of digital currencies by the mainstream financial industry. Visa’s move comes as finance firms including BNY Mellon, BlackRock Inc and Mastercard Inc take steps to make more use of cryptocurrencies for investment and payment purposes.
Bitcoin, the most popular crypto coin, jumped to a one-week high on the news, rising as much as 4.5% to $58,300 and heading back toward a record-high above $61,000 hit earlier this month.
