Good morning and welcome to the stock market today! As we wrap up a busy trading week and prepare for the weekend, what should investors be watching? And what will the stock market do today?
To start, the major indices are once again split, with the Nasdaq Composite dipping into the red. Producer prices are surging more than expected, and Netflix (NASDAQ:NFLX) just struck a big deal.
So what else will the stock market do today? Here are the top three stories.
What Will the Stock Market Do Today? Work on Immunity.
Soon, the supply of Covid-19 vaccines may catch up with demand in the United States.
As Caitlin Owens writes for Axios, this changes a key narrative around the supply-demand imbalance, and comes as President Joe Biden says all adults must be eligible for their first dose by April 19. According to data from Surgo Ventures, this shift in the supply-demand equation could come in April, much sooner than previously thought. States are working through the doses they have received, and 59% of survey respondents say they are vaccinated or ready to be vaccinated.
What does this mean for investors?
An interesting takeaway from this is that, as Owens writes, we could hit a vaccine wall. Wall Street has been tracking this idea of herd immunity, which requires a 70%-90% threshold. Herd immunity factors in those who have already had Covid-19, and those who are fully vaccinated. Now that we have a better picture of where the supply-demand balance is, Surgo Ventures says it has a better picture of the herd immunity timeline. Unfortunately, the firm says the overall immunity rate may only be 65% by July.
In other words, the reopening narrative may face yet another roadblock. As investors count on the vaccine rollout as the key to returning to normal, any delay in that immunity rate will hurt. Plus, with reports of manufacturing challenges hitting vaccine makers like Johnson & Johnson (NYSE:JNJ), the vaccine story is far from over.
Investors Are Hungry for Chips (Still)
The chip shortage of 2021 continues to hit automakers, with General Motors (NYSE:GM) and Ford (NYSE:F) reporting the latest blows. Both legacy automakers shared that they will have to undertake more plant closures in response to the shortage.
GM will close plants for at least a week, with the potential to extend closures at already-idled plants by several more weeks. General Motors has already said that the closures will eat into its 2021 earnings forecasts. They have also impacted a variety of vehicles, including models from GMC and Cadillac. Ford is in a similar position, extending downtime at plants in Illinois, Missouri and Michigan. This will also impact a wide variety of vehicles, including the Ford Mustang.
Prior to the chip shortage emerging as a dominant headwind, investors were looking to GM and Ford as losers in the electrification race. Although both companies have committed to all things electric, Tesla (NASDAQ:TSLA) and its peers were winning. While Tesla appears unaffected (according to one cryptic tweet from Elon Musk), other EV companies are not as lucky.
Thanks Tesla suppliers for providing us with critical parts!
— Elon Musk (@elonmusk) April 8, 2021
This is really where retail investors have been feeling the heat, especially with beloved Nio (NYSE:NIO). Although the company beat its own estimates for Q1 production, NIO stock has continued to stumble. The Chinese EV darling has already issued a warning for Q2, and is facing other threats. Despite the long-term appeal, many investors have found it hard to power through the volatility.
As even top companies like Apple (NASDAQ:AAPL) feel the heat, investors should be closely tuned into the chip shortage story.
The Coinbase IPO Is Coming, But What About Robinhood?
Coinbase starts trading next week, bringing hype to the cryptocurrency world. But what about Robinhood? The popular trading platform is planning a 2021 initial public offering of its own, and it offers investors more than just access to equities popular on r/WallStreetBets.
Yesterday, Robinhood made sure investors knew that.
The company emphasized that crypto is at the core of its mission, and that crypto trading on the Robinhood platform will only continue to grow. It says 9.5 million customers traded crypto in the first quarter, up from 1.7 million in Q4 2020. Plus, Robinhood said it has already tripled its crypto team since the beginning of 2021, and plans on continued growth. Tying in crypto trading as part of its mission to make investing more accessible, Robinhood will likely continue to lean into cryptocurrencies, perhaps by adding more to its platform.
One immediate takeaway: Coinbase has a huge impact on tokens listed on its exchange. However, amid the rush of interest in Dogecoin (CCC:DOGE-USD), Robinhood stands out. Until Coinbase responds to investor calls, that gives Robinhood an edge, as it does facilitate DOGE trading.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
