Stock Market News 4/16

Johnson & Johnson stock plummets

This week the J&J vaccine was put on hold immediately after discovering a rare but severe blood clot that could occur. The CDC has pushed their final decision to a later date as more investigation continues.

It was found that 6 women developed a rare but potentially life-threatening blog clotting disorder that left 1 dead and 1 in critical condition.

It’s possible they could completely shut down the use of this vaccine or simply limit the use based on age, gender and other risk factors.

Lumber Shortage Pushes Home Prices

There is a large shortage of lumber which is one of the main factors driving up home prices. The National Association of Home Builders estimates the price of lumber has risen 180% since last Spring. This possibly resulted in adding an additional $24,000 to the price of a single-family home since last year.  

The industry has expressed frustration in their stricter production which limits their work. Social distancing requirements have slowed the process. The NAHB say lumber producers need to ramp up production and the US Government need to work on an agreement with Canada for new softwood lumber.

March Inflation Numbers High

Consumer prices spiked in March, due to our strong economic recovery and a comparison to last year when COVID was about to impact our economy.

The consumer price index rose 0.6% from last month but 2.6% from March last year. This is a clear indication of inflation in prices which are impacting consumer prices. Michael Pearce, Senior US Economist at Capital Economics mentioned the strongest upward pressure on prices is coming from the services sector.  

Gasoline prices were the biggest contributor to the monthly gain, jumping up 9.1% in March. This covers half of the overall CPI increase.

Food also jumped higher, up 0.1% for the month and 3.5% for the year. Food away from home, which includes pickup, take-out and delivery increased 3.7% this month and 6.5% for the year. This was the largest annual increase since 1997.

Coinbase IPO

Coinbase IPO went public on Wednesday, which was referenced to sell at $250 per share. The stock opened around $381 and closed the market at $328.28. The stock showed high volatility, going as high as $429 and as low as $310, reflecting the rollercoaster ride of crypto prices.

Bitcoin and Ethereum hit all-time highs in anticipation of Coinbase going public, reaching almost $65k, until falling down to $62k. Ethereum is still holding strong at the $2,400 mark.

Wells Fargo Post Earnings

Wells Fargo shares rallied in the post market as the bank’s 1^st Quarter results beat analysts’ expectations. They posted earnings of $1.05 per share on revenue of $18.1 Billion, beating out estimates of $0.71 per share from $17.5 Billion in revenue.

The results were benefited by $1.05 Billion from reserve releases. Banks increased their credit loss reserves last year once the Pandemic started pushing the US economy into a sudden recession, but financial firms have started to release these reserves as the economy begins to recover.