Markets were guided by a tug-of-war last week, between growing inflation worries and concerns about the timing of when the Fed might begin to taper its accommodative policies. Minutes from the Federal Open Market Committee’s (FOMC) meeting in late April offered additional insight into policymakers’ thinking on the economy and inflationary pressures. Investors focused on a statement that “a number of participants” suggested that policymakers “begin discussing a plan” for tapering the Fed’s monthly asset purchase program, which stands at USD 120 billion.
FOMC members acknowledged the potential for inflation to run “temporarily” above their 2% target due to “transitory supply chain bottlenecks” that would fade, though some highlighted the risk that price increases could reach “unwelcome levels before they become sufficiently evident to induce a policy reaction.”
The tension behind the wheel may likely remain for a little while. As for this week’s, the major indexes posted mixed results. The large-cap S&P 500 ended 0.43% lower while the tech-heavy Nasdaq Composite gained 0.31% for the week. The DJIA lost 175, finishing the week 0.51% lower. Within the S&P 500, health care posted the largest gain. Energy and industrials lost ground.
Read on for more trading insight from our team and to find out how our stock picks fared for the week.
05-17-2021_ABNB down 1.78%
At the pandemic’s peak, Airbnb (ABNB) had to gather emergency funds and cut a fourth of its personnel. These efforts were pivotal in helping Airbnb recover from the “most harrowing crisis of our lifetime,” according to CEO Brian Chesky. Airbnb’s income was $3.4 billion at the end of the year, down 30% from the previous year. That’s impressive, given that the company had expected revenue to drop by more than 50% in 2020.
Chesky appears to be optimistic about the company’s future prospects. In an interview with Yahoo Finance last week he identified a crucial travel pattern that could be long-term. According to data from Airbnb’s most recent fiscal quarter, enthusiastic visitors are already taking short “staycations” fewer than 50 miles from home.
Furthermore, a quarter of these stays were for 28 days or more. This, according to Chesky, demonstrates customers’ rising interest in lengthier vacation stays. When you combine all of this with the fact that Airbnb’s recent quarter revenue exceeded analysts’ expectations, things could be looking bright for the company.
05-18-2021_TWLO up 4.12%
Twilio’s products will only become increasingly popular as we rely on our smartphone apps more and more. It’s customer base is expanding healthily and customers are increasing what they spend. The company posted a full-year 2020 net expansion rate of 137% , which means its 235,000 active customers spent 37% more money on its services.
The pros on Wall Street also look favorably on TWLO. Of 27 analysts offering recommendations for the stock, 24 call it a Buy, and 3 say Hold.
05-19-2021_LYSCF down 3.25%
The world is in desperate need for rare earth supply outside of China. Headquartered in Malaysia, Lynas Rare Earths (OTC: LYSCF) is only one of two companies in the world who have rare earth processing capacity that is not located in China.
The company has a partnership with private Blue Line Corp. to develop rare-earths processing plants in Texas because we can’t be independent if we’ve got to send our rare earths to China for processing. The joint venture has been chosen to receive funding by the Pentagon from the DPA to the tune of $30.4 million to “build a Texas facility to process specialized minerals used to make weapons, electronics, and other goods,” as reported by Reuters.
As you can see, LYSCF has shares that trade on the U.S. OTC markets. Of six analysts offering recommendations for the stock, 3 rate it a Buy, 1 calls it a Hold and 2 have a Sell rating for the stock.
05-20-2021_IJR up 0.69%
iShares Core S&P Small-Cap ETF (IJR) is the largest small-cap focused fund on Wall Street with over $60 billion in assets under management. The investment thesis behind a small cap investment is the growth factor that comes along with these securities. While mega cap firms have already hit their peak, many of these companies may be well on their way to becoming the next large cap, and this product gives investors access to over 600 of them.
05-21-2021_WYNN up 0.5%
Wynn Resorts Ltd. (WYNN) owns and operates resorts and casinos in Nevada and Macau. The company holds more Forbes Travel Guide Five Stars than any other independent hotel company in the world. The company also just announced big plans in the wings for its online gaming and sports betting unit.
More than a year after the world was shut down, the U.S. is ready to get back into action. Occupancy rates are jumping in Las Vegas, even nearing capacity for a few hotels on weekends. Macau revenue is also on its way back. Analysts expect more than 100% revenue growth this year for Wynn Resorts Ltd. (WYNN) and nearly 46% growth in 2022.
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