☕️ It's pretty effective

Okay, we'll bite—what's Dogecoin?
January 30, 2021 View Online | Sign Up

Daily Brew

The Motley Fool

Good morning. We interrupt your regularly scheduled GameStop programming with breaking news out the cereal industry: Apparently, there is a major shortage of Grape-Nuts. 

As the brand manager explained yesterday, "Grape-Nuts is made using a proprietary technology and a production process that isn't easily replicated," bamboozling its supply chain and thwarting production (which, it is important to note, involves neither grapes nor nuts).

We'll stay on this story. 

MARKETS

NASDAQ

13,070.69

- 2.00%

S&P

3,714.24

- 1.93%

DOW

29,982.62

- 2.03%

GOLD

1,849.80

+ 0.65%

10-YR

1.064%

+ 1.40 bps

OIL

52.17

- 0.32%

*As of market close. Here's what these numbers mean.

  • Markets: A long time ago in a galaxy far, far away, we used to talk about the stock market in terms of the S&P 500, Nasdaq, and Dow. Those major indexes all performed very poorly yesterday, capping their biggest weekly drop since October.
  • Economy: US consumer spending fell in December for the second straight month. Inflation ticked up, but not enough to worry the Fed, which wants inflation to average  2% over the long-term.

HEALTH

Covid-19 Has Entered the Chat

An illustration of the Earth on a turquoise background with two needles filled with a red serum (symbolizing vaccines) injecting it from either side

Francis Scialabba

As gripping as the GameStop saga is, we'll begin today's newsletter with more pressing developments for public health, the economy, and our ability to, you know, eat at a restaurant without four layers of clothing.

Yes, we're talking vaccines

And there's good news to share: Yesterday, Johnson & Johnson said its Covid-19 vaccine was 66% effective in preventing Covid-19 in a major clinical trial. That may not seem so great compared to the vaccines from Pfizer-BioNTech and Moderna, which are more than 90% effective, but health officials are celebrating it as a big win. Here's why:

  1. This vaccine is a boss when it comes to stopping the worst instances of Covid, preventing 85% of severe disease and 100% of hospitalizations and deaths. "If you can prevent severe disease in a high percentage of individuals, that will alleviate so much of the stress and human suffering and death," said Dr. Fauci.
  2. Unlike the vaccines from Pfizer and Moderna, J&J's requires just one dose. It also doesn't need to be kept in Siberia-level temps to prevent spoilage like the others: it'll stay fresh for three months in the standard refrigeration range of 35–46 degrees Fahrenheit.

Tying it all together: J&J's vaccine won't need to land many of the logistical somersaults required by the other two approved vaccines, which means it could supercharge the vaccination rollout in the coming months. 

What about the other Covid-19 variants? 

This is where it gets a little trickier. J&J's vaccine was more effective in the US than in other regions, including South Africa, where a new variant called B1351 is more prevalent. 

  • While new strains present significant challenges to vaccine developers, they weren't unexpected...and they're not an impossible hurdle to overcome. Vaccines may just need adjustments.
  • Novavax, for example, is working on a booster shot that can fortify its original vaccine against new Covid-19 variants. 

Looking ahead...J&J will apply for emergency use authorization next week, and it may get clearance in March.

+ While we're here: The EU approved AstraZeneca's vaccine for adult use.

        

MARKETS

When the GameStop Stories Don't Stop Coming

Screenshot from Smash Mouth video

Smash Mouth/YouTube

After curbing trading of certain hyper-volatile "meme stocks" on Thursday, online brokerages like Robinhood lifted some of those restrictions yesterday, allowing retail traders to send AMC and GameStop flying once more. 

  • GameStop closed the day up 68% for a weekly gain of 400%. AMC popped 54% to close the week +278%. 

Hedge funds are bending, but aren't breaking

Well, most of them. Citron Research, one of the most vocal firms to take a short position against GameStop, announced that it would stop publishing short-seller reports after it logged a 100% loss on some GameStop positions. But despite short-selling funds losing a collective ~$20 billion so far this year, short interest in GameStop is only down 8% from last week.

Zoom out: The volatility in the market has lawmakers and pundits split. Senator Elizabeth Warren is lobbying for more oversight of the brokerages that halted trading. "To have a healthy stock market, you've got to have a cop on the beat," she said. (The SEC put out a statement yesterday saying it's "closely monitoring" recent activity in "certain stocks' trading prices.")

But Shark Tank's Kevin O'Leary doesn't think the crazy swings are all bad. "[Investors] are learning about the risks of the market. We forgot to educate them in high school so let them learn in the real world, which is even better," he said on CNBC.

        

CRYPTOCURRENCY

Crypto's Going to the Doges

Dogecoin

GitHub

Seems like the writers of Earth are running out of material, because amateur traders on Reddit are banding together to push up the price of another asset: Dogecoin. The cryptocurrency spiked more than 500% this week. 

And while a single Dogecoin isn't worth much—just $0.0565 as of this writing, compared to bitcoin's $35,000—what perked our ears isn't the price, but the origin story: Dogecoin started as a joke.

  • The punchline? Based on 2013's popular shiba inu meme, Dogecoin is a parody of bitcoin that was intended to poke fun at the concept of cryptocurrency. I.e., If any digital currency can be valuable, why not a digital currency based on a meme?

That punchline has gotten a lot more punchy recently, as members of the Reddit forum r/SatoshiStreetBets and elsewhere rallied to push Dogecoin's value "to the moon." 

Zoom out: The wild trading in the stock market has spilled over to the world of cryptocurrencies—and so have the growing pains. Digital currency exchanges Coinbase and Bittrex both experienced outages Friday, while Robinhood temporarily paused instant deposits from cryptocurrency purchases.

        

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FEEL GOOD

Taking Matters Into Their Own Mittens

People getting vaccinated on a snowy road

Josephine County Public Health

On Thursday, healthcare workers in Oregon were on their way back from a vaccination site when a trailer crashed on a snowy road, stranding cars for hours. While most drivers would sigh and crank up the heat, these volunteers had to consider what to do with some ultra-precious cargo: six doses of the Covid-19 vaccine. 

Rather than let the shots expire from lack of proper refrigeration, the volunteers went car-door-to-car-door asking stranded drivers if they wanted to be vaccinated. 

  • They got some takers: "We had one individual who was so happy, he took his shirt off and jumped out of the car," Michael Weber, a public health director, told the NYT

Bottom line: Healthcare workers have already been deemed the MVPs of this pandemic, but the chilly heroes in Oregon said their decision was an easy one. "Our No. 1 rule right now is nothing gets wasted," said Weber.

        

STOCKS

Consuming GameStop Content Like

Cookie monster eating cookies

Giphy

This week's GameStop news is a little like "Despacito": You know you're going to get sick of it at some point, but until then...hammer the repeat button.   

To help you better digest one of the most dramatic finance stories in years, we compiled insightful reads/listens/videos on the subject to fill your Saturday. 

The best long reads

The best podcasts

The best from social media 

        

WHAT ELSE IS BREWING

  • New York City restaurants can open for indoor dining at 25% capacity on Valentine's Day, as long as current Covid trends continue, Gov. Andrew Cuomo said.
  • United Airlines warned 14,000 employees they could be furloughed once payroll support from the government expires April 1. 
  • More than 1,100 students at Columbia University have begun a tuition strike.
  • IPO news: Roblox has reportedly delayed its public offering due to SEC scrutiny of its revenue accounting, while Honest Co., a beauty products company cofounded by Jessica Alba, filed confidentially for an IPO, according to Bloomberg.
  • Incredible news: Apple has greenlighted a TV series on WeWork, starring Anne Hathaway and Jared Leto. It's called WeCrashed

SPONSORED BY THE MOTLEY FOOL

The Motley Fool

Even Congress is doing it. It's the most cannabis-friendly Congress in history, and the investing pros at The Motley Fool say it could be time to take the marijuana industry seriously. Read up on what you need to know about shifts in legislation and how they think it is prime to reconsider cannabis company investments. 

BREW'S BETS

Test drive: Emerging Tech Brew writer Ryan Duffy took a spin in the new 2021 Ford Mustang Mach-E, the poster child of the automaker's multibillion-dollar embrace of electric vehicles. Read his review

Weekend conversation starters...that aren't about GameStop:

  • Speak with (and maybe insult) each other in Shakespearean
  • Name a worse pizza combo than pineapple and olives.
  • What's scarier: a voicemail or a doorbell?
  • Play Chopped by taking turns naming three ingredients and coming up with an app, main, or dessert.

GAMES

Brew Crossword

Crossword

Francis Scialabba

The theme of today's ingenious Brew Crossword, written by Stuart Agler, will be as easy to spot as a billboard...once you figure it out, that is. Play it here

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Written by Jamie Wilde, Neal Freyman, and Toby Howell

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