Plus, congressional leaders are nearing a deal on a new coronavirus stimulus deal, United Airlines said it has begun transporting coronavirus vaccines domestically, and Tilray and Aphria are combining to create one of the largest cannabis companies.
Stocks traded slightly higher to start Wednesday with the Dow adding just 3 points, or less than 0.1%. The S&P 500 and the Nasdaq both rose 0.2%.
Bitcoin traded above $20,000 for the first time in its history. The world’s largest cryptocurrency rose as much as 7% to trade at $20,817.80, capping another milestone in what has been an extraordinary rally this year. “We have a new line in the sand and the focus shifts to the net round number of $30,000,” said Antoni Trenchev, co-founder and managing partner of crypto-lender Nexo. This “is the start of a new chapter for Bitcoin. It’s a narrative the media and retail crowd can properly latch onto because they’ve been noticeably absent from this rally.” Jason Deane, an analyst at crypto advisory firm Quantum Economics, said increased institutional interest in the digital coin has “led to an increasingly bullish narrative. The race is on to secure bitcoin in a market of ever-dwindling supply. It’s probably not too strong to say this is institutional FOMO (fear of missing out) and those organizations who have been looking to do this now realize they will have to move fast to secure it.”
Congressional leaders are closing in on a $900 billion coronavirus relief deal. The deal is not expected to include liability protections for businesses or aid to state and local governments, but is likely to include another round of direct payments to Americans, $300 billion in Paycheck Protection Program small business loans, money for COVID-19 vaccine distribution, and testing and relief for hospitals. Following a round of late-night negotiations between House Speaker Nancy Pelosi, Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, House Minority Leader Kevin McCarthy, and Treasury Secretary Steven Mnuchin, McConnell said “I’m optimistic that we’re gonna be able to complete an understanding sometime soon,” while Schumer said the leaders are “making progress, and hopefully we can come to an agreement soon.” The leaders are expected to meet again today to continue negotiations.
The Federal Open Market Committee is all but certain to keep its benchmark overnight interest rate in a target range of 0% to 0.25% when it releases a statement and its economic forecasts this afternoon. Fed Chairman Jerome Powell and his colleagues, facing an economy slowing as the coronavirus outbreak continues to worsen, could deliver fresh guidance on the Federal Reserve’s asset purchases, now at $120 billion per month. “The biggest disappointment would be a failure to deliver on some kind of guidance on asset purchases,” said Diane Swonk, chief economist at Grant Thornton. “The Fed’s most powerful tool is the perception that they are there.” Jonathan Wright, an economics professor at Johns Hopkins University, said, “I would expect that the statement will acknowledge the worsening pandemic and slower progress in the labor market. There is a danger that progress in the labor market could stall completely. That is not yet there in the data, but slow progress is.”
United Airlines said it has started transporting coronavirus vaccines within the U.S. on its passenger aircraft. The carrier’s first domestic passenger flights with the Pfizer–BioNTech vaccine went out after federal regulators approved the shots, a United spokeswoman said. Chris Busch, United’s managing director of cargo, said, “We’re now continuing to meet with our partners to try to lay out a more scheduled flow of the vaccines.” United became the first passenger airline in the U.S. to transport the vaccine last month, operating five flights from Brussels to its hub at Chicago O’Hare International Airport on a Boeing 777 aircraft dedicated solely for air cargo. Each Boeing 777 is capable of holding more than 1 million doses and United received special approval from the FAA to carry more dry ice than is usually allowed for those flights. “Domestically, it doesn’t necessarily have to be on a 777. That all depends on the size of the shipment,” Busch added. “If there’s a smaller amount, that could go on really any aircraft type.”
And Tilray shares are up more than 21% after it and Aphria agreed to combine their operations, forming a new giant in the rapidly-growing cannabis industry. The all-stock deal will create a combined company with an equity value of about C$4.8 billion ($3.8 billion), with combined 12-month sales of C$874 million – putting it ahead of industry heavyweights Curaleaf Holdings and Canopy Growth Corp. The new company will keep Tilray’s name and will trade under its ticker on the Nasdaq, while Aphria shareholders will own 62% of Tilray’s stock. “I realized that Aphria needed to expand out of Canada, and merging with Tilray was a great answer because it’s a U.S.-domiciled business with great international assets,” said Aphria CEO Irwin Simon, who will be chairman and CEO of the combined company.
Stocks We’re Watching
GrowGeneration Corp (NASDAQ: GRWG): GrowGeneration shares are up more than 10% this morning following the specialty hydroponic and organic garden centers company’s announcement that it is acquiring Grassroots Hydroponics. “We are pleased to add Grassroots to our growing portfolio, with its strong commercial operations and market position,” said Tony Sullivan, GrowGen’s COO. “We look to acquire best-in-breed hydroponic operations that complement and expand our footprint in mature cannabis markets, and Grassroots delivers a priority region, the critical Southern California market, for GrowGen.”