It’s Friday and the stock market is in love with record highs. Investors spent the day celebrating an estimate-beating jobs report and took the S&P 500 and Dow Jones Industrial Average to record highs. So what else did the stock market do today?
- The S&P 500 closed up by 0.17%
- The Dow Jones Industrial Average closed up 0.41%
- The Nasdaq Composite closed down 0.4%
So what did the stock market do today? Here are some of the top stories.
What Did the Stock Market Do Today? Buy Bitcoin Miners.
Lawmakers and cryptocurrencies are a dangerous combination. Today though, their intersection resulted in what was at least a short-term rally in Bitcoin (CCC:BTC-USD) mining stocks. So what do you need to know?
A bipartisan infrastructure bill calls to spend roughly $1.2 trillion on “hard” infrastructure — roads, bridges, electric vehicle chargers. Part of the funding for it will come from $28 billion in new cryptocurrency taxes, raised over 10 years. How those crypto taxes are levied is of critical interest to investors.
An initial draft of the proposal was unclear on who was classified as a “broker.” Without clarity, crypto bulls were worried the taxes would affect everyone from decentralized exchange operators to miners, an unprecedented blow to the digital asset class. Then, Sens. Ron Wyden, Cynthia Lummis and Pat Toomey drafted an amendment that at least temporarily saved the day. Under their proposal, miners would be exempted as “brokers.”
So everything was swimming along just fine… until today. The latest proposal from Sen. Mark Warner gets a little nitpicky with what type of miners are exempted. Right now, he is calling for exemptions for miners of proof-of-work cryptocurrencies like Bitcoin. However, proof-of-stake miners would be considered “brokers” and have to pay taxes.
Importantly, Ethereum (CCC:ETH-USD) is about to embrace a proof-of-stake model, which is largely considered greener thanks to its lower energy usage. This has crypto fanatics decrying the Warner proposal as being dangerous to green blockchain… and to decentralized finance.
Bank Stocks Rally on Jobs Boost
Today investors learned that the U.S. economy added 943,000 non-farm payrolls in July, besting expectations for a gain of 865,000. In the same month, the unemployment rate fell to 5.4%.
Analysts have dubbed this report a “blowout,” although there is more to the story than meets the eyes. Previously, investors assumed such a report would pressure Federal Reserve Chair Jerome Powell to kick off tapering talk during his next event. However, Powell recently countered that assumption, highlighting further improvements needed in the labor market. Specifically, Powell touched on the resurgence of Covid-19 fears and the lower market participation. In other words, there are still many Americans who are not considered unemployed because they are not actively looking. These are people who may still be apprehensive about the pandemic or otherwise serving as caregivers.
But still, investors took the jobs report as a victory. Benchmark 10-year U.S. Treasury yields climbed on Friday to 1.29%, as investors start anticipating an easing of Fed bond purchases.
And, unlike other more growth-oriented stocks, bank stocks can thrive in a higher-bond-yield environment. Considering that and post-pandemic catalysts, bank stocks like Bank of America (NYSE:BAC) and Wells Fargo (NYSE:WFC) posted gains to close Friday.
What Else We’re Watching
- Ethan Allen (NYSE:ETH) is ready for a rebrand… or at least it is ready to have a more unique identity. The furniture retailer announced it would change its ticker symbol from ETH to ETD. Cryptocurrency fanatics have been mistakenly diving into ETH stock instead of Ethereum (CCC:ETH-USD).Now, with a new ticker, Ethan Allen hopes to enjoy its own life.
- Novavax (NASDAQ:NVAX) dropped by more than 19% on Friday after announcing it would not file for emergency-use authorization until the fourth quarter. Vaccine plays like NVAX stock have been enjoying investor favor amid renewed Delta variant concerns. However, without making progress on its regulatory path, it will be hard for investors to support Novavax.
- Kaixin Auto (NASDAQ:KXIN) rocketed today because it has Hollywood… or at least electric vehicle stardom… in its sights. The Chinese used car retail announced it is moving into the new energy vehicle space in an attempt to rival Nio (NYSE:NIO), Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI). KXIN stock closed higher by 90% today.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.