Market Update 2/17/21

(08:15)

Market futures are slightly up with the exception of the NASDAQ which is down slightly. I think the market overall has trying to take a breather and that is a good thing. Many stocks have seen quite some gains and then there is also the added anxiety caused by the "Reddit Phenomena" and pumping and dumping of weed stocks. The underlying economic conditions are much better than they have been and are continuing to improve. President Biden has announced that the US has ordered enough COVID-19 vaccines for the entire country, of course, that does not mean everyone will take it, but it is still promising.

The "reopening" trade is being ignored in my opinion, and I think that specifically, the cruise lines could see a lot more upside as people look for something to do for the coming Summer. Hotels and domestic airlines are close behind.

Another thing to watch this week is the earnings reports. Some very important companies are reporting this week and that will give us a great insight into how the economy is doing. Shopify is reporting today which will give a window into how well some small businesses are doing and how people are spending their money. Twillio is another great company that will report and gives us information about how consumers are using their services, which is mostly business-to-consumer communication, which is an area that is crucial in the current and post-COVID economy. Another interesting earnings report will be Walmart, the largest retailer on the earth has benefitted from the pandemic and despite plenty of effort, Amazon has not replaced the company as a grocer. Walmart has stepped up their e-commerce biz and is well-positioned for even more growth as US retail sales surge due to stimulus and unemployment compensation.

I am cautiously optimistic about the short term but I believe that things are looking good enough to be positively inclined long term. Still, discipline should prevail and if a company is running too much for no real reason then there might be something off.

A company I have been watching is called STEM. A SPAC will soon merge with the company and come public under the name STEM, but it is currently trading under ticker STPK. The company is engaged in energy-storage technology and already has an impressive amount of projects and customers. Battery technology and energy storage are industries that will see incredible growth in the future and with a current administration that wants to expand the grid for EV's we might even have a long-term catalyst. The stock has seen some abrupt moves lately and that is expected for a SPAC, but after the merger is completed the stock might stabilize.

Thanks,

The Punkrock Capitalist