“There are three ingredients for success—aggressiveness, timing and skill—and if you have enough aggressiveness at the right time, you don’t need that much skill.”
― Howard Marks

1. WarnerMedia’s Combination with Discovery Is the Latest Salvo in the Streaming Wars — WarnerMedia’s combination with Discovery creates the second-largest U.S. media company behind Walt Disney. Viacom and Comcast, the parent of NBCUniversal, will find themselves on the smaller end after the deal closes in terms of streaming scale, competing against their rivals’ bigger subscriber bases with their Paramount+ and Peacock offerings.
2. New York Drops Masks and Capacity Limits, a Potential Boon to Tourism — New York officially drops mask mandates for the vaccinated and capacity limits for everything from restaurants to museums and theaters on Wednesday, a potential boon to New York City’s economy as workers return to Midtown offices and tourists repopulate Times Square. More than 42% of all New Yorkers have been fully vaccinated as of Tuesday, and 12- to 15-year-olds became eligible for the Pfizer shots last week. Nearly 53% of the state’s adults are fully vaccinated. Tourists can get vaccinated in the city.
3. Fed Officials Discussed Tapering Bond Buying in the Latest Fed Minutes — The minutes related to the Federal Open Market Committee meeting at the end of April, before a weak report on the number of jobs added that month and before the April consumer-price index reported the fastest yearly increase since 2008. In the minutes, Fed officials noted elevated risk appetite in capital markets. “Should investor risk appetite fall, an associated drop in asset prices coupled with high business and financial leverage could have adverse implications for the real economy,” the minutes said. Supply chain bottlenecks and input shortages may not be resolved quickly, the minutes said, and could put upward pressure on prices.
4. Treasury Calls for Crypto Transfers Over $10,000 to Be Reported to IRS — The U.S. Treasury said the Biden administration’s proposal to strengthen tax compliance includes a requirement for transfers of at least $10,000 of cryptocurrency to be reported to the Internal Revenue Service. Cash transactions in excess of $10,000 are already subject to IRS reporting requirements.
The IRS in 2020 added a line about cryptocurrency on the Form 1040, the individual tax return, in an effort to gain more visibility into virtual currency transactions.

The week ahead — Economic data from Econoday.com:

May 14, 2021 Weekly Recap Will Not Be Published This Week; The Office is Closed for Some Needed R&R

The week ahead — Economic data from Econoday.com:

“Be patient and learn how to sit on your hands.” — Doug Kass

1. Fully Vaccinated Tourists Can Visit Europe This Summer — fully vaccinated travelers will be allowed to visit 27 European Union nations this summer under a travel proposal the European Commission. If approved, the policy would allow visitors from countries with low infection rates and proof of vaccination. The EU is creating a “Digital Green Certificate” to help governments more easily verify a completed vaccination, a negative test, or Covid recovery. Certificates will be in digital or paper form, include a QR code for authenticity, and contain limited personal data.
Canada is also considering a vaccine passport for travelers, perhaps as an upgrade to its ArriveCAN app for visitors to report their contact information, quarantine and travel plans, and symptoms. In one poll, 78% of Canadians said vaccine passports should be required of all inbound travelers.
2. U.S. to Back Waivers for Covid-19 Vaccine Patents — The U.S. government signaled Wednesday that it would support a temporary waiver for intellectual property rights on coronavirus vaccines, as advocated by the World Health Organization, in spite of the strong objections of the global pharmaceutical industry. The pharmaceutical industry has argued that waiving patents would not address the current manufacturing bottlenecks that explain vaccine shortages, and that it could hand crucial sensitive technology and scientific secrets to countries like Russia or China.
3. U.S. Births at Lowest in 41 Years on Pandemic Worries and Economic Uncertainty — the U.S. birthrate fell 4% in 2020, the sixth straight year of decline and the lowest since 1979, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. The birthrate was hurt by pandemic worries, economic uncertainty, and postponed pregnancies. The average number of children American women might have over their lifetimes is 1.64, a record low. Fewer babies are being born than the number needed to replace people who are dying, the CDC said.
4. India’s Covid-19 Cases Top 400,000 Again, as Vaccinations Decline — India reported another 412,262 coronavirus cases, the second time in a week it has recorded more than 400,000 cases in 24 hours, per Johns Hopkins University data. India is home to 18% of the world’s population but accounted for 46% of new Covid-19 cases globally and one in four deaths this past week, the World Health Organization said Wednesday. India has vaccinated more than 30 million people, or 2.2% of its population. President Joe Biden supports sharing Covid-19 vaccine patents, but the European Union and other World Trade Organization nations would need to approve waiving intellectual property protections. Other countries would also need the facilities, techniques and ingredients to make vaccines.

The week ahead — Economic data from Econoday.com:

“Try to get a little smarter every day and read as much as humanly possible. An investment in knowledge pays the best dividends” — Doug Kass

1. Fully Vaccinated Americans Will Be Able to Visit the European Union This Summer — European Commission President Ursula von der Leyen told the New York Times that “all 27 member states will accept, unconditionally, all those who are vaccinated with vaccines that are approved by E.M.A.” The European Medicines Agency has approved all three of the vaccines currently being given in the U.S. She didn’t provide a timeline or details on how travel would reopen, but said the United States was making “huge progress” toward reaching herd immunity of vaccinating at least 70% of its adult population by mid-June.
2. Fed Holds Steady on Interest Rates — the Federal Reserve held its key interest rate near zero and said it plans to continue supporting the economic recovery, while acknowledging recent progress in growth and employment. The Fed has held overnight interest rates near zero since March 2020, when the Covid-19 pandemic and related restrictions delivered a severe blow to the economy. Since June, the central bank has also been purchasing at least $80 billion of Treasury bonds and at least $40 billion of mortgage-backed securities to hold down longer-term borrowing costs for consumers and businesses.
Fed officials have said they would hold rates steady until the labor market is back to full strength and inflation has reached the central bank’s goal of averaging 2%. Chairman Jerome Powell has said those conditions are unlikely to materialize this year, and most Fed officials indicated last month that they expect to hold off on raising rates until 2024 at the earliest.
3. U.S. Recovery Gains Steam as Spending Fuels 6.4% GDP Growth — Gross domestic product expanded at a 6.4% annualized rate following a softer 4.3% pace in the fourth quarter, the Commerce Department’s preliminary estimate showed. Personal consumption, the biggest part of the economy, surged an annualized 10.7%, the second-fastest since the 1960s. The inflation-adjusted value of domestically produced goods and services climbed to an annualized $19.1 trillion, indicating GDP will soon eclipse the pre-pandemic peak of nearly $19.3 trillion.
4. Biden Tax Proposal Would Kick In at Over $500,000 for Couples — the new top 39.6% tax bracket, proposed in Biden’s “American Families Plan” on Wednesday, would encompass less than 1% of taxpayers, the official said, asking not to be named to speak in more detail beyond the White House’s outline. The official’s comment suggested that the new rate, up from the current 37%, would be applied from 2022. For Biden’s separate proposed increase in the capital gains tax rate to 39.6% from 20%, the administration said earlier this week that will apply to both singles and joint filers who make $1 million or more.

The week ahead — Economic data from Econoday.com: