Good morning and welcome to the stock market today! As we kick off the week, one big story is in focus. On Monday morning, the U.S. Food and Drug Administration granted full approval to the Covid-19 vaccine from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX). This marks yet another milestone in the battle against the pandemic… and it has PFE and BNTX stock shooting higher today. So beyond cheering on a vaccine victory, what else will the stock market do today?
- The S&P 500 is up 0.84%
- The Dow Jones Industrial Average is up 0.73%
- The Nasdaq Composite is up 1.16%
So what else will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Call a Cab.
Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) are getting the wrong sort of wake-up call on Monday. The ride-hailing companies and their investors are dealing with news that Proposition 22, a California ballot initiative, has been ruled unconstitutional.
So what do you need to know?
This story largely starts back in January 2020 when California Gov. Gavin Newsom signed Assembly Bill 5. The new legislation declared that companies like Uber and Lyft had to designate their drivers as employees, not independent contractors. Importantly, this change brought implications around benefits such as healthcare and paid sick leave.
But the ride-hailing companies did not eagerly accept AB5. Instead, they spent more than $220 million to raise awareness around Proposition 22. This ballot initiative went through in November 2020, and found approval from 58% of Californians. As a result, Uber and Lyft could continue to classify their drivers as contractors. Investors saw this as a victory, and the gig economy was, at least momentarily, in the clear.
On Friday, a California judge took a different tune. Alameda County Superior Court Judge Frank Roesch ruled that Proposition 22 was “unconstitutional” and “unenforceable.” This has UBER stock and LYFT stock down just slightly in Friday morning trading.
So what is the bottom line? Some gig economy advocacy groups are hailing this ruling as a victory for drivers. However, others are worried that this ruling will not hold (acknowledging appeals will come), or will not expand beyond California. Perhaps this uncertainty explains the muted reaction in Uber, Lyft and DoorDash (NYSE:DASH) shares.
Coinbase Makes an Altcoin Splash
This morning, investors are paying close to attention to Bitcoin (CCC:BTC-USD) prices. The leading cryptocurrency has been hanging out above $50,000, bringing levels of $55,000 and beyond into view. In fact, after the latest leg of its rally, experts think Bitcoin could in fact be setting up for a new all-time high.
Underneath this major story, there is something important for investors to be watching.
Coinbase (NASDAQ:COIN) announced late last week that it would invest $500 million of its $4 billion reserves into cryptocurrencies. This comes just days after news broke that Coinbase was stockpiling cash — a move designed to help the exchange survive a slow winter. There has been some fear that companies like Coinbase and Robinhood (NASDAQ:HOOD) will suffer as day trading enthusiasm wanes throughout the rest of 2021. The announcement also follows criticism that Coinbase is not leading the way with crypto investments. Specifically, some fanatics have said Coinbase should have Bitcoin and other cryptos on its balance sheet to lead by example.
Now, Coinbase will put that $500 million in BTC and in a variety of altcoins. It says these altcoins will largely match what its customers are buying — perhaps signifying a grouping of top altcoins to watch.
More importantly, the move could be a new vote of confidence for the crypto community. Keep this story in mind as Bitcoin remains in focus.
What Else We’re Watching
- General Motors (NYSE:GM) is spending $1 billion to expand its recall of Chevy Bolt electric vehicles. This recall stems from concerns over battery defects that could result in fires. While General Motors has been making a big push into all things EV, this setback could dampen electric plans.
- On Sunday, the Department of Defense activated the Civil Reserve Air Fleet to gather passenger planes from six commercial airlines. These planes — from United (NASDAQ:UAL), American (NASDAQ:AAL), Delta (NYSE:DAL) and others — will help with evacuations in the Middle East.
- Coffee chain Dutch Bros just filed for an initial public offering. Hopefully the company will get the jolt of caffeine it needs; Dutch Bros wants to raise $100 million and expand to 4,000 coffee stands.
- Topps is not feeling the going-public love. In fact, the trading company announced it was terminating its deal to come public through a SPAC merger after losing its 70-year deal with Major League Baseball. Maybe its next endeavor will be trading cards for NFT rocks?
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
View more information: https://investorplace.com/2021/08/what-will-the-stock-market-do-today-aug-23-3-big-stories-to-watch/