Plus, jobless claims unexpectedly rose, Apple is reportedly planning to release new iPad Pro models in April, Peloton has teamed up with Adidas on an athletic apparel line, and Amazon is testing its Rivian-made electric delivery vans in San Francisco.
Stocks were lower at the open on Thursday with the Dow dropped 87 points, or nearly 0.3%. The S&P 500 slid 0.5%, while the Nasdaq sank 1.3%.
Tech stocks are getting slammed this morning as the 10-year Treasury yield jumped to 1.75%, its highest level since January 2020, while the 30-year rate rose to 2.5% for the first time since August 2019. Market measures of inflation expectations are near multi-year highs, with traders paring back bets the Fed would start tightening as soon as late next year after Fed Chair Jerome Powell indicated he wasn’t worried over the recent surge in long-term yields. “Powell has given the green light to higher 10- and 30-year yields as progress out of the pandemic accelerates,” said BMO Capital Markets’ Ian Lyngen. “Underlying inflation expectations remain elevated and will remain a bedrock of the bearish trend in Treasuries until those assumptions are challenged. For now, it doesn’t pay to fight the cheaper and steeper yield curve.”
Jobless claims unexpectedly jumped. The Labor Department reported initial claims rose to 770,000 for the week ended March 13, while economists expected a reading of around 700,000. Continuing claims fell to 4.12 million for the week prior, while claims from all federal unemployment programs came in at 18.22 million. Federal Reserve Chairman Jerome Powell said the recovery “remains uneven and far from complete” at a press conference yesterday. “There are 10 million people that need to get back to work and it’s going to take some time for that to happen,” Powell said. “It’s not going to happen over night.”
Apple is reportedly preparing new high-end iPads that could launch as soon as April. Bloomberg reported that the company is planning a refresh of the iPad Pro line that would include a faster processor, improved cameras, and a new type of mini-LED display with improved brightness and contrast. The iPad devices have performed well amid the pandemic, and generated $8.4 billion in revenue during the 2020 holiday quarter. The iPad Pro was last updated in March 2020 at the beginning of the pandemic, adding a tweaked processor, support for the Magic Keyboard with Trackpad case, and a lidar scanner alongside the camera.
Peloton is teaming up with Adidas on a new line of athletic apparel and lifestyle gear. The line, announced Thursday, will include shorts, hoodies, tees, crewnecks, sports bras, and jogger pants in inclusive sizing up to 2X, and with pricing ranging from $30 to $85. The “Adidas x Peloton SS21 collection” will be available for sale on both companies’ websites and in select Adidas and Peloton retail stores starting on March 25. “During a time where we are not able to be physically together, we have an incredible opportunity to help grow connected communities and continue to support people as they build their new fitness journeys at home,” Adidas General Manager of Global Training Aimee Arana said in a statement.
And Amazon announced that it has begun testing its new electric delivery vans developed in partnership with start-up Rivian Automotive in San Francisco. Amazon began testing the vans in Los Angeles last month and plans to expand the program to 14 more cities this year. “From what we’ve seen, this is one of the fastest modern commercial electrification programs, and we’re incredibly proud of that,” Amazon global fleet and products director Ross Rachey said in a statement. “As we continue to grow and invest in California, we want to do so responsibly, so we’re excited for customers in the Bay Area to see these vehicles cruising through their neighborhood.”
Stocks We’re Watching
Townsquare Media (NYSE: TSQ): Townsquare shares are up 15% since Tuesday after the company announced fiscal fourth quarter and full year 2020 results. As I look back over the past year, I am extremely proud of Townsquare’s performance, driven by our passionate and committed employees, our loyal audience and communities, and our resilient “Local First” operating strategy,” Townsquare CEO Bill Wilson said in a statement. “Our fourth quarter financial results reflect that performance as they exceeded our goals and expectations, and as we look at 2021, we believe that we will continue to see strong improvement and strong results in our business. In the fourth quarter, year over year net revenue declines significantly narrowed to -3%, from a low of -35% in the second quarter and -15% in the third quarter, and I am so proud to report that Adjusted EBITDA returned to growth, increasing +8% year over year. Townsquare Interactive, our digital monthly subscription business, excelled throughout the year, accelerating year over year net revenue growth in Q4 to +16% and generating over $70 million of revenue for the full year (+14% YoY) at a profit margin of approximately 30%. In total, digital net revenue increased +6% year over year, driven by both Townsquare Interactive and Townsquare Ignite (our digital programmatic advertising platform), which grew net revenue by +11% year over year. With $162 million of 2020 digital net revenue, digital now accounts for approximately 44% of our total net revenue, further differentiating us in the local media marketplace. I am also pleased to reaffirm our expectation that Townsquare Interactive and Townsquare Ignite will each generate $100 million in revenue in two to three years. 2020 served to accelerate Townsquare’s transformation into a premier local media and digital marketing solutions company proudly super-serving markets outside the top 50 markets. Although we are proud of our roots and DNA in local radio and we continue to love local radio, 2020 was the year Townsquare became a “Digital First” company.”