Bitcoin and other cryptocurrencies have fallen on hard times recently, but the sector may have found its hero in the form of Amazon.
The company’s job vacancy advertising for a “digital currency and blockchain product lead” has sparked rampant speculation over what the tech giant might have planned. The new position will be part of the team responsible for how Amazon’s customers pay on its platforms.
The possibility of Amazon accepting cryptocurrency payments—by the end of the year, according to some reports—saw Bitcoin surge to six-week highs just below $40,000. There’s even the suggestion the internet behemoth could be developing its own coin and may also accept alternatives such as Ethereum.
Cryptocurrencies face a fight over their role in society, their use, and ultimately their value. Acceptance by a company as big as Amazon will only help their case. It’s a bold move from Amazon, and how the company deals with the famed volatility of cryptocurrencies will be fascinating to see.
Investors may not need to wait long for answers. Amazon reports earnings on Thursday and executives will surely face a volley of questions on the matter.
—Callum Keown
***On this week’s Barron’s Streetwise podcast, columnist Jack Hough discusses the future of power distribution and why breaking up is a bad idea with Duke Energy chief Lynn Good. Listen here.
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China’s Education Crackdown Sparks Selloff
Chinese regulators have turned their attention to the education sector as Beijing unveiled sweeping new regulations banning academic tuition groups from making profits, raising capital in the stock market and foreign ownership. The news puts billions of dollars of investment in China’s booming private education sector at risk and sparked a selloff in Chinese stocks.
- U.S.-listed TAL Education Group and peer New Oriental Education & Technology said in separate statements that they would comply with the rules and regulations, but warned the new measures would have a “material adverse impact” on their after-school tutoring businesses. Both stocks fell more than 20% in U.S. premarket trading.
- In Hong Kong trading, Tencent dropped as much as 8%, after the State Administration for Market Regulation ordered the technology giant to give up its exclusive music licensing rights, continuing a crackdown on competition. E-commerce platform operator Meituan dropped 11%, and Chinese internet giant Alibaba dropped 5% in late trade.
- The latest reforms to the education sector follow a crackdown on China’s tech industry that has included an antimonopoly investigation into Alibaba and a data-related cybersecurity investigation into Didi Global just days after the ride-hailing giant raised $4.4 billion in a New York initial public offering.
What’s Next: China’s widening regulatory crackdown on a range of industries from tech to real estate shows no sign of slowing down and has left U.S. investors grappling with the increased risk of investing in U.S.-listed Chinese companies.
—Lina Saigol
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Bipartisan Senators Group Is Close to Agreement on Infrastructure Plan
The bipartisan group of senators trying to craft the details of the $1.2 trillion infrastructure package appear close to an agreement. Eleven Republicans who voted against considering the bill on Wednesday told Senate Majority Leader Charles Schumer (D., N.Y.) they would support moving forward with it this week.
- Sen. Rob Portman (R., Ohio), the lead Republican negotiator, told ABC’s “This Week” on Sunday that negotiators were “about 90% of the way there,” but still disagreed on how much to spend on public transit, The Wall Street Journal reported.
- Senate Banking Committee Chairman Sherrod Brown (D., Ohio) and Senate Environment and Public Works Chairman Tom Carper (D., Del.) issued a joint statement that robust funding for public transit is vital, and they would not support any package neglecting “this fundamental part of our nation’s infrastructure.”
- Meanwhile, groups representing nursing homes and other long-term care facilities have urged lawmakers not to tap into their unspent Covid relief funds to pay for infrastructure, The Washington Post reported.
- Democrats are also trying to rally support for a separate $3.5 trillion package on healthcare, education and child care measures that they hope to pass through budget reconciliation with only Democratic votes.
What’s Next: Congress also has to tackle the debt ceiling, or the government could run out of cash. A 2019 suspension of the limit expires Aug. 1, and Republicans said they won’t support raising it. House Speaker Nancy Pelosi said Sunday: “Let there be no question: We will address the debt limit.”
—Janet H. Cho
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Fauci Says U.S. Is ‘Going in the Wrong Direction’ on Coronavirus Cases
The U.S. is “going in the wrong direction” on coronavirus, as infections soar among unvaccinated Americans and because of the contagious Delta variant, Dr. Anthony Fauci told CNN’s “State of the Union” on Sunday.
- Florida has more Covid-19 cases than any other state, with 73,181 cases over the past week, a fourfold jump between July 1 and July 22, per the Centers for Disease Control and Prevention. Florida’s 319 Covid deaths last week were the highest in the U.S.
- In Alabama, where 34% of residents are fully vaccinated, cases have risen 192% over the past two weeks, the New York Times reported. Gov. Kay Ivey said that “it’s time to start blaming the unvaccinated folks” for “letting us down.”
- In Arkansas, where 35% of residents are fully vaccinated, Gov. Asa Hutchinson is holding town hall meetings where people have called vaccines “bioweapons.” Covid cases there are up 141% over the past 14 days, but he said vaccinations have increased 40%.
- As of Sunday, 163 million Americans are fully vaccinated (including 60% of adults), and nearly 188.5 million have received at least one shot (69% of adults) per the CDC.
What’s Next: Fauci said that U.S. public health officials are considering urging vaccinated people to wear masks again, and could recommend booster shots for fully vaccinated people who have suppressed immune systems.
—Janet H. Cho
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What to Expect in Robinhood’s IPO Later This Week
Robinhood has grabbed a lot of attention this year as the champion of the retail investor fighting the Wall Street establishment. Later this week, the creator of the zero-commission trading platform will follow a very traditional path, debuting its stock on the Nasdaq.
- It is one of the year’s most anticipated initial public offerings. Robinhood seeks a $35 billion valuation through the offer of 55 million shares at a range of $38 to $42 a share. It will trade under the ticker HOOD.
- Robinhood controversially makes money by selling customer trade orders to Wall Street firms to execute, something called payment for order flow. That contributed 81% of first-quarter revenue.
- In December, Robinhood agreed to pay $65 million over charges it misled customers over payments from trading firms. The company has said it wants to diversify its revenue.
- The company’s website said it wants to build Robinhood Gold, which gives customers access to professional research, instant deposit starting at $5,000, and, if approved, margin trading. It is also looking to expand internationally.
What’s Next: Robinhood is setting aside as much as 35% of its shares in Thursday’s IPO for sale to its customers through its IPO Access, which gives retail investors the chance to buy shares of some new issues before they begin trading on an exchange.
—Liz Moyer
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With Evictions Set to Begin Again, Watch for Rising Rent Market
The federal pause on evictions ends this weekend, putting 8 million households at risk of being removed from their dwellings without any last minute reprieve that protects tenants. The end of the moratorium on July 31 is expected to pressure an already hot housing market, and stoke inflation.
- Weekly Census Bureau data show 15% of people in rented housing units are behind on rent. One-quarter of 51 million households surveyed said they either weren’t confident or had slight confidence they would make next month’s rent.
- Landlords could replace delinquent tenants with new occupants at higher rates. Janney Montgomery Scott analyst Rob Stevenson estimated that rents in coastal markets hard hit last year are up 4% from earlier this year.
- Rents were rising at a 3.4% clip immediately before lockdowns, and their continued climb even with evictions on hold indicates pressure as wages rise and mobility increases with vaccinations and reopenings.
- The National Association of Realtors said the median price of a previously owned home hit a new high in June, to $363,300. House prices lead rents by 12 to 18 months, Citigroup economist Veronica Clark said.
What’s Next: The Federal Reserve will meet this week to decide on interest rates. In previous meetings, the central bank has argued the surge in inflation is transitory, but current conditions might make that a tougher sell in coming months.
—Liz Moyer
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MarketWatch Wants to Hear From You
We’re thinking of buying a condo for our college student child. What are the financial pros and cons?
A MarketWatch correspondent will answer this question soon. In the meantime, send any questions you would like answered to [email protected].
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—Newsletter edited by Liz Moyer, Camilla Imperiali, Steve Goldstein, Callum Keown
