The Threecap
Three things to recap this past week.
Is It Over?
This past week was the 4th consecutive week that the S&P 500 declined. Continuing its downward trends from the previous weeks of 8/31/2020, 9/7/2020, and 9/14/2020, the S&P 500 and continued their decline as many investors continue to lower their expectations of companies recovering at the pace they previously thought they would. The S&P 500 fell 0.63%. But the NASDAQ broke its losing streak and finished the week 1.11% higher. Tech shares are up quite a bit for the week, with some big names making up ground for the losses suffered earlier in September. For example, Apple is up 5.09%, Amazon is up 4.75%, Facebook is up 0.91%, and Microsoft is up 3.71%, all this week. Note that for the past month, these stocks are still down double-digit percentages. But I urge all of you to put this into context of the time since the coronavirus started because these numbers are fractional compared to the gains the market has made since the bottom in March. Does this mean we’re returning to the times when tech stocks marched higher? Perhaps. But what September has shown so far is that the realities are eventually going to bring certain valuations back down.
2. COVID-19 Update
There’s been some worrying news on the COVID-19 front — daily cases rose this past week in over half of the states. It’s been about 9 months since the first case of coronavirus was diagnosed in the US. According to the CDC, we’ve breached the 7 million cases benchmark in the US, and have close to 205,000 deaths. The worldwide total for deaths is close to 1 million. Just this past week, there were 311,102 new cases in the US, whereas prior weeks saw closer to 280,000 new weekly cases. Adding more worry, scientists say that the US is nowhere near close to herd immunity. Additionally, Democrats and Republicans are still at a stalemate in Washington over the next round of coronavirus relief and stimulus. Democrats are reportedly forming a plan for a $2.4 trillion stimulus package that would continue the same kinds of stimulus as the previous round did. This package would cost $1 trillion less than the initial proposal the Democrats put forward. With the election in November, negotiations will likely heat up as candidates start making their final pushes.
3. Judge Deciding on TikTok
Last week, TikTok announced it would partner and partly be owned by Oracle and Walmart in a deal that would allow it to stay available in the US after pressure from the Trump administration. A judge, however, blocked an administrative order from Trump that would have banned TikTok from app stores. The judge is set to make his final decision late on Sunday, so by the time you’re reading this, he likely will have made his statement. As one can imagine, content creators on TikTok who, like content creators on YouTube and Instagram, have invested so much time into building their presence on the platform, are mad. However, it seems like the law will reign supreme over their attempts to prevent the ban because on Saturday, a judge rejected three TikTok content creators’ bid to block the ban. We’ll see how this plays out, but it’s likely that if TikTok gets banned, then its users who have built out their brand and online presence on the platform are going to want to overturn it.
Recent Articles
University Endowments Explained
In a capitalist society, money is power to businesses. Institutions that generate revenue — for-profits and non-profits, corporations, single-employee businesses, farms, and automobile factories alike — eventually need to achieve solvency to be sustainable long-term. Institutions know that keeping cash is useful in a worsening economy, but presents an opportunity cost when compared to investing that cash in the form of paying shareholders dividends, buying out competitors, and otherwise attempting to get a return on their cash. Even businesses that aren’t traditional “businesses” can do this. Enter the world of university endowments: a place for wealthy non-profits to leverage the power of the economy, for good or for bad, and evade both taxes and loss of their non-profit status.
The Importance of Financial Literacy In India
Today, India is one of the biggest markets for businesses. Its large population is seen as an asset by Multinational Corporations. India has become a hub for Information and Communication Technology with Banglore seen as the Silicon Valley of India. There has been a steady increase in foreign investments and many Indian companies have expanded their operations to other countries. India is quickly emerging as one of the fastest-growing economies in the world. However, many small producers, companies and Indian firms aren’t able to succeed. We have developed ourselves in technology and to some extent in production capacity, but most of the Indian businesses fail because of financial mismanagement. According to the 2011 census, 74.04% of the total population is literate, but only a few understand the importance of financial literacy.
Recent Podcast
In this episode, Rohan Gupta and Rajan Vazirani talk to Anthony Scaramucci, Founder of Skybridge Capital, about hedge funds. They delve into topics like the history of the hedge fund industry, hedge fund basics, hedge fund careers, coming back from failure, and much more!
Team Member Showcase
Arjun Mody
Senior Writer
Major in Mechanical Engineering at CU Boulder
Daily Routine: Researching and writing articles about trends and topics regarding the tech industry.
Why you joined StreetFins: As someone who is very interested in technology, I felt like I could help educate others. I also wanted to learn more about the business aspect of things.
Finance Tip
“Recessions are the best time to start a company. Companies fail. Others hold back capital. If you are willing to do the preparation and work, it is the best time to invest in yourself and start a business.” - Mark Cuban
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