- Nick Burgess
This Week In The Market - July 2, 2021
Welcome back to "This Week In The Market," where we break down all of the latest market news in easy to read, easy to understand ways. Let's go!
Call Jack Harlow, Because It's Poppin'
The BFD: The June jobs report dropped this week and we are en fuego. June U.S payrolls jumped 850,000, crushing the 706,000 expected by "experts." The unemployment rate saw a slight edge northward as more companies are getting back to business as usual and are posting those jobs opportunities.
In Plain Speak: Looking at the numbers as a whole, it's pretty impressive how many jobs were added. However, when you look at the sector-by-sector numbers you'll discover how lopsided the report is. Predictably, the strongest wave of job openings are in the sectors hardest hit by COVID, namely hospitality and travel. And this is a mixed bag. We're seeing extremely strong jobs numbers, but they're jobs that don't pay an enormous amount (typically), and we're seeing examples across the country of hotel employees and even airline pilots refusing to come back to work until the unemployment benefits have expired in September. Despite this lopsided report, it should be a positive guiding light for the upcoming Q2 GDP report.
How Can This Make Me Rich?: You could go and get a job, since it seems like we're adding quite a lot of those. Outside of that, so called "recovery stocks" are the ones to watch. Stocks like Vegas mega-operators $LVS, $WYNN and $MGM could all be companies to watch. And airline stocks, once recovered from the pilot shortage, could be advantageous. I've always like $LUV since they're built to be profitable at less than 90% capacity, but since I'm in Atlanta, I also see the huge resurgence of $DAL.
Weird Story of the Week
Michael Burry, famed Principal of the now shuttered Scion Capital and portrayed by Christian Bale in "The Big Short" is calling for the mother of all crashes in the meme-stock sector. His argument is that the "free money" is over, and now here comes the crash of the retail investment darlings due to the lack of available funding propping up the share prices. His hit rate is actually not bad on these types of calls, as evidenced by Graham Stephan last week in the video below, so keep one eye on stocks like $GME and $AMC.
Stock of the Week
OK, stay with me on this one. This week we're highlighting $SPCE. Here's why:
It's a billionaire fight! The kings of capitalism are going at it: Jeff Bezos with his company Blue Origin, and Richard Branson with his Virgin Galactic SPAC. It all kicked off in May, when Bezos announced he was putting his considerable sums of money where his mouth is and will be boarding a Blue Origin spaceflight in on July 20. Branson struck back, announcing this week that in fact HE would be the first billionaire in space, set to launch July 11. This caused Virgin Galactic shares to jump an eye-watering 25% before settling back down like the smooth landing of a reusable rocket ship. Interested in riding with Branson? The good news is that these tickets are only $250,000 each. The bad news? There are 600 people in line ahead of you. In the meantime, you can feel like a new age spaceman with Under Armor's official line of space wear.
How Can This Make Me Rich?: Virgin Galactic is currently the only publicly traded space tourism company having gone public via Chamath Palihapitiya's SPAC deal in 2019. This company doesn't trade on fundamentals or revenue; it trades on news. Good news? The stock could jump another 25%. Bad news? Goodbye dreams of that new beach house. But if you believe that space tourism is something that could appeal to the average customer in the future, it may be worth jumping in sooner rather than later.
Thanks for joining us this week, and enjoy the long July Fourth weekend! You might have earned it. And don't forget to sign up for our email list below so you can get these sent directly your inbox!