U.S. Senate passes a historic $1T infrastructure bill
America’s old infrastructure to get a major facelift
In a rare show of collaboration, Senate Democrats and Republicans came together to pass a $1T infrastructure bill. Nineteen Republicans joined all fifty Senate Dems to approve the package, which advances a key piece of President Biden’s agenda: giving America’s old infrastructure a major facelift.
The spending package, which came after months of negotiations and despite deficit concerns, will see $550 billion going to public works programs, including $110 billion to roads and bridges, $66B to rail, and $40B to transit.
Internet access will get a shot in the arm with $65B to expand its reach. This includes $30 monthly vouchers for low-income families.
Green energy also had its moment with $7.5B allotted to build new EV charging stations, and $7.5B for greener school buses.
Excited? There’s more! This week, Democrats unveiled a $3.5 trillion budget plan for big spending on social programs and climate efforts. Watch this space!
Wall Street had a reasonably decent week with the S&P 500 and Dow Jones Industrial Average hitting fresh all-time highs on Friday as both indexes capped off modest gains for the week.
For the week, the Dow gained 0.87%, and the S&P 500 advanced 0.71%, while the tech-heavy Nasdaq falling marginally at 0.09%.
Top Stories
Frown time for SmileDirectClub
SmileDirectClub (SDC) operates a teledentistry platform that provides members with a customized clear aligner therapy treatment in the United States and internationally.
Unlike its closest competitor, Invisalign-maker Align Technology (ALGN), SmileDirectClub chose the D2C (direct-to-consumer) route. On August 10th, SDC’s aligner sales dropped 13% from the previous quarter, while Invisalign’s sales grew by nearly the same amount. SDC investors indirectly frowned, sending the stock down 25% yesterday.
Investor’s perspective
While D2C may be promising for simple products like fashion accessories, appliances and toys, it doesn’t always work for complex products that require extreme personalization, especially ones that involve health.
SDC is now building out its own dentist partner program, and the move could just help its stock in the long run – which may be down, but certainly not out.
A lot of things have gone wrong for SDC, but it does have the potential to bounce back under the right circumstances. Let’s open wide and see if it has what it takes to reward investors for a change at current prices.
Weight Watcher’s quarterly sales are slimming down
Weight Watchers (WW) expected its dieting programme to fill up this year. But conversely its sales and subscriptions slimmed down last quarter, and its shares dropped nearly 30% after it posted its earnings.
Despite the national reopening, the weight management player’s sales fell 7% last quarter. Four in ten people in the U.S. may have gained unwanted weight during the pandemic, but they’re not in a hurry to lose it. People are more focused on reconnecting with friends than toning their beach bods. Spending at restaurants and bars hit an all-time high in May – and they sure weren’t eating WW’s cauli-rice.
Investor’s perspective
Consumers seem to be favouring options, experiences, and flexibility after a year of restrictions and routines. Companies that are responding to these demands are reaping benefits: Levi’s (LEVI) sales more than doubled last quarter as it embraced baggier jeans and balloon pants.
It must be noted that consumers aren’t abandoning wellness. They are prioritizing convenience. Atkins and SlimFast saw a boost in sales of their pre-made diet foods.
Value is the dimension where WW ranks best as far as stocks go; there it ranks ahead of 83.39% of US stocks. WW’s current lowest rank is in the Sentiment metric.
Disney posts a magical $17 billion in quarterly revenue
Disney (DIS) shares surged 5% as its theme parks division enjoyed its first profitable quarter since the pandemic. Its $17.02 billion in quarterly revenue, beat market expectations.
While the pandemic has crushed the company’s theatrical business and resulted in lackluster movie theatre sales, Disney’s parks, experiences and products segment returned to profitability for the first time since the COVID pandemic began, though the parks alone are not yet profitable.
On the OTT front, the company topped subscriber estimates for Disney+, coming in at 116 million. Disney revealed that its total addressable market is 1.1 billion households across the globe.
Investor’s perspective
Disney’s stock has outperformed the market over the last one year due to an extremely strong performance by its streaming business, Disney+, as streaming demand has been high during the pandemic.
Along with continued strong demand for streaming, with gradual lifting of lockdowns and a successful vaccine rollout, Disney’s traditional businesses like cable and theme parks are also expected to see recovery in the coming quarters.
Signs of recovery of its business are seen with Disney returning to U.S. multiplexes in March 2021 after almost a break of one year, which should bode well for the company in the long term.
What Else is Hot
- Delta vs MRNA: Moderna (MRNA) is 76% effective against variant infection, while Pfizer is just 42% effective.
- Coinbase earns serious coin: Coinbase (COIN) reported $1.6B in profit for last quarter – nearly a 5,000% increase from a year earlier.
- Going ghost: Wendy’s (WEN) shares jumped ~4% yesterday after it revealed plans to launch 700 ghost kitchens by 2025.
- Pepper-only pizza? Pizza Hut (YUM) is set to launch meat-free pepperoni in five US cities.
