Netflix and Revenue Sitting in a Tree

Tale of the Tape

Good evening, folks. The market of stocks marched higher after Janet Yellen’s treasury confirmation hearing. See more below.

Every major index finished green as the Nasdaq Composite closed 0.04% within its all-time high. The Russell 2000 continued its rally. $RUT is up 117% since March 18, 2020.

Energy was the strongest sector. $XLE surged 2%. Communications and technology both gained 1%. Real estate, consumer staples, and utilities all closed lower.

Ethereum etched a new all-time high as Bitcoin continues to bounce between 42,000 & 30,000. Where will the cryptos crack next? Place your bets… 

The China Technology ETF gapped up to another all-time high. $CQQQ cruised 5.77%.

Is Blackberry back? 🤭 $BB has bounced back 66% in the last 3 days, but will it last? Time will tell. 

Stitch Fix continues to drift. $SFIX is up 68% since the company reported earnings in early December.

Lithium Americas lept 30% and closed at a new all-time high. Regulators approved its new lithium mine in Nevada on Friday after the close.

Netflix reported earnings after the close, and the stock shot to levels not seen since last fall. 🚀 Is $NFLX heading to new highs? Time will tell.

Here are the closing prints: 

S&P 5003,798+0.81%
Russell 20002,151+1.32%
Dow Jones30,930+0.38%

Yellen on The Economy

Janet Yellen’s Treasury confirmation hearing was today, and she’s on track to become the first female Treasury Secretary in US history. 👑 🙌

During her hearing, she honed in on 3 key points:

  1. Stimulus, ASAP. Yellen told Senators today that without a new stimulus package, the economy could face a “longer, more painful recession now… and a long term scarring of the economy later.”
  1. Higher taxes, later. During her questioning, Yellen acknowledged that Biden plans to raise corporate and high-income personal taxes, but she suggested we should focus on getting the economy through the pandemic and recession first.
  1. Strong dollar, always. In sharp contrast to Trump’s opinion on a weak dollar, Yellen said she wants to focus on maintaining a strong and stable currency impacted by the market, not the Treasury.

Oh, and Yellen said cryptocurrencies are concerning due to connections to terrorist financing and money laundering… we’re guessing she’s not a HODLer. 

Earnings Roundup

Goldman Sachs reported killer results before the bell. The firm’s trading division posted its highest annual revenues in a decade, up 43% YoY. Additionally, the company provided an update on its strategic plan.

Here are the numbers:

EPS: $12.08 vs $7.47 est.
Revenue: $11.7B, △ 18% YoY growth

And here’s the revenue breakdown by segment:

$GS closed down 2.25%.

Bank of America posted a quarterly profit, but missed revenue estimates. 

Here are the numbers:

EPS: $0.59 vs $0.55 est
Revenue: $20.2B, ▼ 10.1% YoY growth

$BAC fell 0.73%.

Netflix shares soared after the streaming service disclosed its almost-positive free cash flow. 💸 The company also saw strong subscriber growth, and will consider share buybacks.

EPS: $1.19 vs $1.39 est.
Revenue: $6.64B, ▼ 21.5% YoY growth

Netflix said this in its shareholder letter:

With 8.5M paid net additions in Q4, we crossed the 200M paid memberships mark. For the full year, we added a record 37M paid memberships, achieved $25B in annual revenue (+24% year over year) and grew operating profit 76% to $4.6B.

$NFLX flew 11% after hours. Here’s the daily chart: 

Inauguration Day 2021 🇺🇸

Tomorrow, President-elect Joe Biden will be sworn in as the 46th President of the United States. 🇺🇸

Before leaving for Washington, Biden delivered a speech thanking his home state of Delaware. He also gave a tribute to his son Beau, who died from brain cancer in 2015.

For the first time ever, Americans are encouraged to stay home from tomorrow’s inaugural ceremony. The National Guard has the capital on lockdown, and a Field of Flags will take the place of the usual crowd:

Meanwhile, President Donald Trump takes off for Florida tomorrow— he is the first president in US history to skip his successor’s inauguration. 

Rivian Gets a Pickup

Rivian, one of the most hyped EV manufacturers, raised $2.65B— that places its valuation at more than $27.5B. 🤯

Rivian has now raised more than $8B in the last two years alone. This is a unique situation in the EV space, since most companies take advantage of the hot market by going public in an IPO or through a SPAC.

The company is now on track to begin production later this year in Illinois. 👏

There’s two kinds of people in this world — Cybertruck people and R1T people. Which one are you? 

Read Rivian’s press release here.

Merck vs. Gilead 🥊

Today the Supreme Court rejected Merck & Co’s appeal to resurrect the drug company’s $2.54B winning verdict against competitor Gilead Sciences. 

Merck & Co sued Gilead in 2016 for patent infringement, claiming Gilead’s hepatitis C treatments breached patents for Merck’s Idenix drug. 

But in 2019, the US Supreme Court ruled Merck’s winning verdict invalid— the court said Merck’s patent actually violated US patent law. 

Soo… now Merck claims the Supreme Court’s decision from 2019 “undermines biotechnology breakthroughs,” and IP experts agree. 

What a mess. 🤦‍♀️  $GILD gapped up 5.91% and closed at its highest price since last September. Here’s the daily chart:

And the monthly too, for good measure:

Earnings This Week

Be sure to know when your stocks report earnings. Here’s the earnings calendar

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