The Market News Reel for the week of September 6th! Find out the most important market news and updates for the upcoming week each Monday!
Major headlines, excerpts from a reputable news source and a link to the full article are shown below. "Our Thoughts" section is purely our opinion.
El Salvador makes Bitcoin its National Currency
"El Salvador becomes the first country to adopt it as legal tender Tuesday.
Both enthusiasts and detractors of cryptocurrencies will be monitoring to see if a significant number of people want to transact with Bitcoin when it circulates alongside the U.S. dollar, and whether it brings any benefits.
The country bought 400 bitcoins ahead of the roll-out, with a market value of about $20 million at current prices. The country plans to buy “a lot more” of them, President Nayib Bukele said via Twitter" - read more on Bloomberg here
Our Thoughts: This is a big step forward for their country and the use of crypto globally. Many other countries are looking to see how feasible it is to implement something similar, so its success or struggles will impact future adoption. El Salvador is also taking a risk as international/US based organizations have seen this move as a threat, with the World Bank & IMF issuing warnings.
However, it seems that the local government has stepped up to provide a domestically built crypto app, mining, servers, ATMs, and other infrastructure to make the use of Bitcoin as currency possible. This strengthens local tech capabilities, and will help save the country $100s of millions in yearly fees as their citizens rely heavily on remittance payments from abroad.
GameStop to Report Q2 Earnings as Meme Hype Persists
"GameStop Corp. will report second-quarter fiscal 2021 earnings results after the market closes on Wednesday, September 8, 2021. GameStop shares have surged over 975% so far this year. The stock closed 5.04% lower at $202.75 on Friday.
Caught in meme-frenzy, GameStop has soared and outperformed the industry year to date. The company has been undertaking efforts to fast-track growth, mainly in the digital arena. To accelerate transformation, the company has resorted to board as well as capital restructuring. In this context, the company concluded selling 5 million shares in its last at-the-market equity offering program, and generated net proceeds worth as much as $1.13 billion." - read more on Yahoo Finance here
Our Thoughts: What started as meme induced short squeeze earlier this year by mostly Robinhood based traders, has held up the price of GameStop to the point where they can raise billions in fresh funds, paydown debts, and execute digital transformation plans. Prior to this GameStop was facing a major decline as stores closed due to covid restrictions and video game sales went more online. The millennials who grew up shopping at GameStop, who were the primary users of Robinhood, seem to have saved the company.
Markets make wild things possible!
Major Earnings This Week
Wednesday September 8:
GameStop (GME): Expected Q2 earnings of $-0.66 per share
Lululemon (LULU): Expected Q2 earnings of $1.18 per share
Oracle (ORCL): Expected Q1 earnings of $0.97 per share
Descartes Systems (TSX:DSG, DSGX): Expected Q2 earnings of $0.25 per share
Thursday September 9:
Affirm (AFRM): Expected Q4 earnings of $-0.29 per share
Friday September 10:
Kroger (KR): Expected Q2 earnings of $0.64 per share
Major Expected IPOs This Week
None
See you next week!
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