ECONOMY

Has the Economy Finally Turned It Around?

If we had a dollar for every economic prediction that didn't pan out last year, we could single-handedly fund President Biden's stimulus plan. 

Still, the latest wave of economic data has some experts hoping that the US is not only on the rebound, but ahead of schedule. 

The growing signs for optimism

When investors are nervous about what's ahead, they typically buy US Treasury bonds, which sends bond prices higher and yields down. But last week, yields on the 10-year note climbed to a one-year high, a sign that investors are bullish about a quicker rebound. 

So are CEOs, whose confidence is at a 17-year high. Execs are predicting fewer layoffs and a positive wage outlook, according to a recent Conference Board survey. 

On the consumer front...

• Retail sales jumped 5.3% in January, aided by the latest round of stimulus checks. 
• Households are sitting on ~$1.5 trillion in extra savings. 
• Employment in several blue-collar sectors—residential construction, delivery, and warehousing—surpassed pre-pandemic levels. Retail and restaurant jobs are also recovering.

Zoom out: Goldman Sachs recently upped its 2021 GDP forecast to 7%, but economists are still concerned about the K-shaped recovery. 10 million fewer people are working now compared to last February, continuing unemployment claims are still elevated at 18.3 million, and consumer sentiment for those earning <$75,000 remains down.

What does this mean for more stimulus? 

The US government has spent $3.7 trillion since March, and Biden wants another $1.9 trillion. Given indicators of economic improvement, some experts are divided on whether more spending will trigger inflation or get the US out of a 20-year "low-growth rut." 

Treasury Sec. Janet Yellen thinks we're still in "a deep hole." And when he testifies to the Senate and House finance committees this week, Fed Chair Jerome Powell is expected to continue pressing for more action.

ENERGY

Texans Looking at Their Electricity Bills

Most Texans have their lights back on following a harrowing week in which frigid temperatures + energy grid failures contributed to prolonged blackouts. But now, some are facing a whole new disaster: astronomical electricity bills. A few examples:

• An HR director was charged $2,739 this month after paying $130 in January.
• A Dallas resident is facing a $7,000 bill.
• A retired Army vet is stuck with a $16,752 electric bill, 70x what he typically pays for utilities.

How could that happen? Many Texans facing exorbitant charges were customers of power supplier Griddy, whose prices fluctuate with the wholesale energy market. When energy prices skyrocketed last weekend, Griddy knew its customers were in for a painful surprise and even encouraged them to switch providers if they could.

Looking ahead...Texas Gov. Greg Abbott held an emergency meeting on Saturday to see what lawmakers could do to provide relief. And Houston Mayor Sylvester Turner said the state of Texas should "bear the responsibility" of paying the egregiously high bills. 

GRAB BAG

Key Performance Indicators

The best news bites you missed this weekend in the form of one stat, one quote, and one read.

Stat: The Chinese box office generated $1.2 billion in ticket sales over the recent Lunar New Year holiday, a record haul and equivalent to about 10% of the total global box office last year. Detective Chinatown 3 had the biggest opening ever for a film in a single market, topping even Avengers: Endgame. 

Quote: "BTC & ETH do seem high lol"—Elon Musk, despite being a crypto bull, tweeted that surging bitcoin and ethereum prices might be overdoing it a little. For once, though, his tweets went ignored: Both cryptocurrencies hit record highs this weekend.

Read: A financial crisis is heading for the legendary soccer club, Barcelona. (New York Times)

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Think you can beat us? Submit your dream Chobani® Coffee Creamer flavor here.

FINTECH

Too Late to Declare 2021 the Year of Fintech?

Nothing against the ox, but two of Silicon Valley's mega-startups are getting ready for their Wall Street cotillion, and new reports say they're already commanding nine-figure valuations. 

First up, Coinbase

Ahead of its planned direct listing, investors are valuing Coinbase at $100+ billion, which would make it the biggest US tech listing since Facebook, per Axios. As the first US-based crypto exchange to go public, it'll also confer major legitimacy to digital currencies. 

Coinbase has licenses to operate in over 40 states and 100+ countries. And in the first nine months of 2020, it did $141 million in profit... 

...and that was before bitcoin started shooting up like bamboo. The crypto has risen ~96% YTD and is pushing $58k. 

Next is Stripe

Thanks to the pandemic-fueled e-commerce boom, Stripe processed an estimated 50% more payments last year. Investors are valuing the company at $115 billion in the secondary market, more than 3x its valuation from last April.

• This weekend, Stripe announced that former Bank of England Gov. Mark Carney is joining the board. 

Zoom out: With Ant Group's IPO blocked by Chinese regulators, American fintechs may steal the show. SoFi is going public via SPAC, and while Robinhood is...working through some things...it hasn't ruled out a 2021 IPO. 

CALENDAR

The Week Ahead

Stimulus: The House could vote on Biden's $1.9 trillion stimulus package this week, per House Speaker Nancy Pelosi. As a reminder, the bill includes direct payments of up to $1,400 and $400/week in extra unemployment benefits. 

Powell testimony: Fed Chair Jerome Powell will try for a Roaring Kitty-like performance when he testifies on Capitol Hill on Tuesday and Wednesday about the state of the economy.

Earnings: Should be a fun week, with lots of big retail names (Home Depot, Etsy, Lowe's, TJX, Best Buy) and plenty of others (Nvidia, Square, Salesforce). On Thursday, Airbnb and DoorDash will deliver their first earnings reports since going public.

Everything else:

• The Conservative Political Action Conference (CPAC) starts Wednesday. Former President Trump is expected to deliver a speech on Sunday. 
• Warren Buffett will release his famous annual shareholder letter on Saturday.
• Chag sameach to our Jewish readers celebrating Purim Thursday night. Let us know if you've got any fun costumes planned.

WHAT ELSE IS BREWING

• A United Airlines Boeing 777 safely returned to Denver after suffering an engine failure post-takeoff, raining debris on a town below. United is taking 24 planes out of service temporarily, and Boeing has called for all 777s with a specific Pratt & Whitney engine model to be grounded until the FAA inspects them. 
• Activist investors have acquired a 9.5% stake in Kohl’s and are attempting to take control of the retailer’s board, according to the WSJ.
• Merrick Garland's confirmation hearing for US Attorney General is today.
• The UK sped up its timeline for administering vaccines, pledging that every adult would get a first dose by July 31.
• Naomi Osaka and Novak Djokovic took home trophies in the Australian Open.

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Work playlist ideas: Listen to a) radio stations all around the world or b) recreate your favorite bar's atmosphere.

Dive back into the week:

• Shallow dive: Up, reimagined
• Medium dive: Fascinating visual showing building ages in the Netherlands
• Deep dive: The Brew's guide to all the confusing acronyms in this newsletter
• Cannonball: Prof. Scott Galloway on the algebra of wealth

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GAMES

Nutritional Facts

Which famous food product is made from the following ingredients:

Unbleached enriched flour, sugar, palm and/or canola oil, cocoa, high fructose corn syrup, leavening, salt, soy lecithin, chocolate, artificial flavor

ANSWER

Oreo cookies 

** A Note From Chobani

NO PURCHASE NECESSARY. Enter Contest by: 2/28/21. To enter and for Official Rules, visit http://www.chobanicoffeecreamer.com/.