Elon Gives a Rocket to His Staff at SpaceX – Closing Bull Dec. 3rd, 2021

Quick Summary:

In this week’s Closing Bull, we will be discussing Elon’s statement on the bankruptcy of SpaceX, briefly discussing the Omicron variant that is going around, Captial One’s rise to the largest bank to ditch overdraft fees, Crypto current executives testifying before the House, Fed Chair Jerome Powell wanting to retire the word “transitory” to describe the current inflation dynamics in the US and a fun fact for the end.

Key News This Week:

• Market recap.
• Omicron variant.
• Capital One became the largest US bank to ditch overdraft fees.
• Elon gives a rocket to his staff.
• Cryptocurrency executives to testify before the House.
• Fed Chair says it’s time to retire the word “transitory” to describe current inflation dynamics in the US.

Read the Transcript

Welcome to my financial markets’ re-cap for the week.

Before we get to the news, a quick update on the system. Phew, crazy week in the markets this week, lots of whipsaws caused by fear over this new covid strain. 

We are long this market now and thankfully not from the beginning of the week. I am expecting some good news next week to turn this fear around. 

That is what we are seeing in our forecasts and therefore that is what I expect. 

It is amazing to me how quickly the markets can turn even in the face of fear. I have seen it too many times to expect anything less. So, I remain positive and expect a rally in December, and soon.

That was the system update, what happened in the news this week?

Obviously, the main news story is a new strain called Omicron. I am not going to spend much time talking about it suffice to say that investors prefer the devil they know… And there’s still plenty we don’t know about Omicron.

All we can do is rely on the scientists and hope for positive news in the days and weeks ahead.

So…In other news this week, there was good news in the retail banking sector:

Capital One became the largest US bank to ditch overdraft fees, which often hurt vulnerable consumers. These fees brought in $14B in revenue for the banking industry last year, so this is a significant step by a major bank. It followed moves by 2 other banking firms recently. I think it’s now only a matter of time before they all go down this path.

And this week Elon Musk says SpaceX faces a bankruptcy crisis, however, the move was more designed to motivate the team to find a solution to a problem they are having with their latest rockets. 

Sometimes pressure is the greatest motivator. So even though Elon has conceded that even if a global recession were to hit, a SpaceX bankruptcy is unlikely.

He has also underscored: “Only the paranoid survive.” So, he’s raising alarms to motivate employees to reach SpaceX’s ambitious goal of flying Starships at least once every two weeks next year.

In crypto news, executives at eight top cryptocurrency firms will testify before the House Financial Services Committee next week in the first such hearing for the industry. Crypto is all grown up now apparently and is starting to be taken seriously by the powers that be.

In Senate testimony this week, Fed Chair Jerome Powell said that it was time to retire the use of the word “transitory” to describe the current inflation dynamics in the US.

Powell has led Team Transitory since the summer when supply chain bottlenecks caused a surge in prices for goods like used cars.

Powell and other officials argued those prices would return to normal levels once the wrinkles of the economic recovery were ironed out.

But Team Transitory has been on a losing streak since then, as inflation has spread to other sectors and is generally overstaying its welcome.

He said “The economy is very strong and inflationary pressures are high”, telling lawmakers that the Fed will consider accelerating the wind-down of its stimulus measures at its next meeting later this month, something the markets didn’t want to hear.

However, like everyone else, Powell will be waiting for more information on vaccine effectiveness before making any changes to the policy.

The fact that the jobs data out this morning disappointed for November may make the Fed pause this idea. We shall see.

Here’s an interesting fact:

Amazon expects to surpass FedEx and UPS as America’s biggest delivery company by package volume by early 2022…now if you spend a few days at my house, you’d think they already were, especially at this time of year.

That’s it from me, it’s the weekend, time to down tools, have a great weekend, thanks for watching and bye for now.