JC Weekly Brief – 8th February, 2021

by Jefferson Capital
February 8, 2021

Global Overview

Battle for Stimulus

As the debate on $1.9 trillion package intensifies, members of the Biden administration are preparing to weigh in on various specifics including direct payments and earning thresholds. Democrats have unveiled a new proposal of $3,000-per-child direct benefit, which is viewed as a defining feature of Biden’s economic agenda.

If congress passes Buden’s stimulus plan, full employment could be achieved by next year, the Congressional Budget Office concludes. Although it would take until 2025 for the unemployment rate to go below 4% without a stimulus package approved.

Treasury Yield on a Rise

Long-term Treasury yields have been climbing up amid positive data on vaccines. As 30-year Treasury just hit 2%, investors are becoming concerned with an extra risk of losses across the equity market with rising yields.

As analysts estimate that rising yields could be dangerous for the stock marketas a whole, it is not yet clear as to what extent and how sharply Treasury yields have to rise in order to have an impact. Goldman Sachs predicts a surge of at least 36 basis points within a month is necessary to shift investors’attention.

Capital Markets


PX Last 1 Week YTD
United States
S&P 3 871.74 4.65% 3.48%
NASDAQ 13 777.74 6.01% 7.51%
Euro Stoxx 50 3 642.12 5.01% 2.90%
FTSE 100 6 503.72 1.28% 0.45%
DAX 14 060.29 4.64% 2.40%

Fixed Income

10 Year Week* YTD*
United States 9.10% 27.41%
United Kingdom 47.67% 130.1%
Germany 13.64% 22.20%
Switzerland 15.81% 32.16%
*Change in sovereign debt Yield

Union by Amazon

As the world has seen a dramatic shift to online shopping in the past year, Amazon is playing a major role in servicing its customers’ needs, although it has been doing so at the expense of its own employees. Nearly 6,000 warehouse workers are voting to form the first Union within the U.S. Amazon facility.

Known for its harsh and uncompromising working conditions, Amazon has been fighting against working unions for some time, as they did in 2014 in Delaware. Forming the union could become a precedent that will potentially spark a wave across worldwide facilities.

Short Report

Hindenburg Research, a company that specialises in investigative journalism and short reports, has issued another short attack this time targeting healthcare software maker Clover Health. Short sellers have announced an undergoing investigation by Department of Justice over Clover’s business model and software product, resulting in CLOV’s stock to plummet 12% in a day.

Not so long ago Hindenburg took aim at a $13 bn an EV startup Nikola, in asimilar manner, which resulted in wiping out more than half of company’s market capitalisation.

Private Equity & Venture Capital

The Second Delay for Roblox

Roblox public market debut has been postponed for a while longer by the SEC. The gaming platform developer was aiming to go public in a direct listing inearly February after it has raised another $520 million in Series H round pushing its valuation to $29.5 billion.

The company has already put on hold its IPO in December last year , as it was seeking a defence against large first-day share surges typical in 2020 IPO spree. However this time the Securities and Exchange Commission is responsible for delaying Roblox’s direct listing due to an ongoing investigation.

M&A on the Rise

European M&A market has seen a surge in the last six month of 2020. According to the 2020 Annual European M&A Report, investors have engagedin a total of more than €1 trillion deal flow. Major rebound is seen across IT and healthcare sectors as the SPAC craze have reached Europe.

Commodities & Digital Assets

PX Last 1 Week YTD
WTI Crude 57.97 11.05% 19.48%
Gold 1 814.11 -1.82% -4.44%
XBT/USD 37 858 9.29% 30.56%

Oil Prices Climb

Commodities markets are seeing strong rebounds, as Oil prices have surged to pre-pandemic highs. Brent crude has hit a mark of $60 a barrel, which can be associated with depleting of oil reserves due to production cuts of 2.1 billion barrels by the OPEC.

Visa to Integrate Cryptocurrency

Visa CEO has revealed its plans to integrate cryptocurrency across its payment network. World’s largest payments provider is seeking ways to increase the accessibility of crypto assets, as was stated during the company’s earning’scall.

Along with the announcement, Visa has released a pilot program in apartnership with First Boulevard, digital neobank, who will be the first one to integrate Visa’s new suite of crypto API’s.