Bitcoin Has Tumbled More Than 20%. What to Make of Its Bear Market.

That puts Bitcoin off 21% from the high. A bear market is typically defined as a drop of more than 20%.

Bitcoin has become a monster in 2021. The total value of Bitcoins in electronic-circulation hit $1 trillion this past week. The Federal Reserve’s balance sheet, for comparison, is about $7.6 trillion.

It’s no coincidence that we mention the Fed. Bitcoin’s bear market comes as the central bank’s laissez-faire attitude toward the rise in Treasury yields—the 10-year note traded well over 1.5% on Thursday, before pulling back to 1.47% Friday morning—has started to hit speculative bets of all stripes.

Tech giants like

Apple

and

Microsoft

have been hit, as have the most expensive, speculative parts of the market, including

Tesla

and

Zoom Video Communications.

Don’t expect the pain in Bitcoin to stop until the bond market calms down.

—Al Root

*** Join Beckie Strum, Mansion Global managing editor, and Jonathan Miller, president and CEO of New York-based appraisal firm Miller Samuel, today at noon to discuss the nuts and bolts of home value and how appraisers are navigating a fast-moving home market. Sign up here.

***

Democratically-Held House Expected to Pass Stimulus. What Happens Next.

President Joe Biden’s $1.9 trillion stimulus bill will face its biggest challenge in the Senate starting next week after its expected passage by the House of Representatives today.

• The House version of the bill, which is expected to pass along party lines, largely mirrors Biden’s original American Rescue Plan released on Inauguration Day and includes $1,400 in direct cash payments to most Americans, an extension of federal unemployment benefits, and $350 billion in aid to state, local, and tribal governments.
• It will also include a provision to increase the federal minimum wage. That may be cut from the Senate version of the bill. The Senate parliamentarian ruled Thursday that the wage increase didn’t comply with the chamber’s rules for the budget reconciliation process, which allows Senate Democrats to pass the relief bill with a simple majority.
• “We are deeply disappointed in this decision. We are not going to give up the fight to raise the minimum wage to $15 to help millions of struggling American workers and their families,” Senate Majority Leader Chuck Schumer (D., N.Y.) said Thursday after the ruling.
• “This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change—by either party—on a simple majority vote,” Sen. Lindsey Graham (R., S.C.) said.

What’s Next: Senate Democrats could try to overturn the ruling by the parliamentarian and will still need to conduct their own review of the bill. Any changes made in the Senate would go back to the House for a second vote. Lawmakers are hoping for final passage by mid-March, before the current federal unemployment benefits expire.

—Janet H. Cho

***

Retail Wage Wars Heat Up as Costco Raises Starting Pay to $16 an Hour

One week after rival

Walmart

said it was raising minimum pay for 425,000 of its hourly workers in the U.S. to at least $13 an hour, warehouse club

Costco

is upping the bar by bumping its minimum pay to $16 an hour.

• The $1 an hour increase, which goes into effect March 1 and only applies to U.S. workers, gives employees there the highest starting wages compared to direct rivals
  
  Amazon,
  

  
  Target
  
  and Walmart.

• “This isn’t altruism. It helps in the long run by minimizing turnover, maximizing employee productivity, commitment and loyalty,” CEO Craig Jelinek told the Senate Budget Committee on Thursday. Costco’s annual employee turnover rate is about a third less than competitors.
• By comparison, Walmart still starts hourly workers at $11 an hour and the higher wages announced last week apply to less than a third of its 1.5 million U.S. workers. Amazon has had a $15 minimum wage since 2018, and Target matched that last June.

What’s Next: Costco and other essential retailers saw sales soar during 2020 as people who sheltered at home stocked their pantries and shopped online. The warehouse club’s shares fell 2% on Thursday and have dropped 11% in 2021.

—Janet H. Cho

***

Airbnb, DoorDash Post First Earnings Results Since IPOs

Airbnb

and

DoorDash

each reported their first earnings results since going public in December. Both gig economy firms locked in big net losses.

• Airbnb reported a December quarter net loss of $3.9 billion—though $2.8 billion of that was related to a stock-based compensation expense. DoorDash reported a fourth-quarter net loss of $312 million, but the company was profitable after excluding an expense for $322 million in stock-based compensation, and the related payroll tax expense.
• With Americans stuck at home ordering food delivery, DoorDash’s sales surged 226% year-over-year to $970 million. On the flip side, with travel hampered by the pandemic, Airbnb reported a year-over-year sales decline of 30% to $3.4 billion.
• DoorDash shares were down 11.6% in after-hours trading while Airbnb was up 0.3%. Shares of both have surged in recent weeks. Through Thursday’s close, DoorDash stock has gained 17% in 2021, while Airbnb stock increased 24%.

What’s Next: With reopenings in sight, Airbnb is gearing up for the summer travel season. It plans to spend big on marketing. Meanwhile, DoorDash forecasts declines in consumer engagement and average order volume as vaccines roll out.

—Connor Smith

***

Nursing Home Covid-19 Cases Have Dropped Sharply Since the Vaccine Rollout

After being devastated by coronavirus infections and deaths for most of last year, nursing homes are emerging as the biggest success story to date in the U.S. vaccination effort.

• Since mid-December, new cases in nursing homes have dropped by more than 80% versus about 45% for the U.S. overall, according to New York Times data. Nursing home deaths, meanwhile, have plummeted 65%. A third of all deaths due to the virus have occurred among residents and employees of long-term care facilities.
• “It’s a dramatic decline,” Dr. Sunil Parikh, an associate professor of epidemiology and medicine at Yale School of Public Health, told the New York Times.
• More than 4.5 million of the 68 million vaccinations given to Americans to date have gone to long-term care facilities, according to the Centers for Disease Control and Prevention.
• Some nursing home workers are hesitant to get vaccinated, a trend also seen in the rest of the U.S. The Biden administration has said it will launch public education campaigns to overcome concerns about the vaccines.

What’s Next: The expected approval of the

Johnson & Johnson

drug for emergency use as soon as this weekend should help further speed vaccinations of those most vulnerable to severe outcomes from the virus.

—Janet H. Cho

***

France Fails to Curb Pandemic as Macron Resists Lockdowns

The number of new coronavirus infections has been on the rise in France in the last two weeks, making it the only major European power seemingly unable to curb the pandemic, as the government remains reluctant to impose a national lockdown.

• The number of new daily infections, at more than 25,000 according to the latest data, is now three times higher than the U.K.’s. In mid-January, France’s tally amounted to only a third of the British count.
• A deputy mayor of Paris asked today that the capital city be put into lockdown for three weeks, which he said would be more efficient than the 6 p.m. to 6 a.m. curfew currently in place nationwide.
• French Prime Minister Jean Castex said Thursday that a few regions might be ordered into complete lockdown next month “if the situation keeps deteriorating.”
• About half of all new cases registered in the country are now due to the U.K. coronavirus variant, Castex said.
• Less than 4% of the French population has received a jab in the two months since vaccines began to be distributed in the EU, compared to 27% in the U.K.

What’s Next: Macron has been criticized for playing electoral politics by voicing concerns about the vaccines, notably throwing doubt on the efficacy of the Oxford/

AstraZeneca

jab. And with regional elections in June, and his own reelection effort next year, he has seemed reluctant to take tougher measures for fear of a political backlash.

—Pierre Briançon

***

U.S. Launches Air Strikes Against Iran-backed Militias in Syria

The U.S. on Thursday launched military airstrikes in eastern Syria against Iran-backed militia groups in response to rocket attacks on Feb. 15 that killed a U.S. contractor and injured others in Iraq, Pentagon spokesman John Kirby said. It’s the first known military action taken by the Biden administration.

• The attack destroyed facilities at a border-control point in Syria used by Iranian-backed militant groups. A U.S. official said casualties were minimal, The Wall Street Journal reported.
• “The operation sends an unambiguous message: President Biden will act to protect American and coalition personnel,” Kirby said. “At the same time, we have acted in a deliberate manner that aims to de-escalate the overall situation in both eastern Syria and Iraq.”

What’s Next: This action comes as the Biden administration seeks to engage Iran about reentering the nuclear deal that former President Donald Trump exited and lift sanctions against Iran.

—Pierre Briançon

***

Do you remember this week’s news? How well do you know your Wall Street history? Take our quiz below about this week’s news. Tell us how you did in an email to thebarronsdaily@barrons.com.

1. In which department store has a group of activist investors taken a sizable stake and is attempting to take control of the company’s board?

a. Kohl’s

b. Macy’s

c. Nordstrom

d. Ross Stores

2. Facing pressure from several industries, President Biden signed an executive order this week to review the supply chains for critical materials such as semiconductor chips used by auto makers. What other supply chain areas are under review?

a. Large capacity batteries

b. Pharmaceuticals

c. Rare-earth elements

d. All of the above

3. Which Northeast regional bank is planning to merge with People’s United Financial in a $7.6 billion all-stock deal in the latest string of regional mergers?

a. Community Bank System

b. M&T Bank

c. Webster Financial

d. Valley National Bancorp

4. Which state is the latest to legalize recreational marijuana?

a. Georgia

b. Florida

c. New Jersey

d. Idaho

5. Federal Reserve Chairman Jerome Powell told Congress this week that the Fed doesn’t foresee raising its benchmark fed-funds rate from near zero until which conditions have been met?

a. The labor market is at maximum strength

b. Inflation has hit the Fed’s 2% target

c. Inflation is expected to stay at a 2% level or higher

d. All of the above

100 Years of Barron’s
6. Before President Franklin D. Roosevelt made the Tennessee Valley Authority his signature infrastructure initiative, which industrialist offered to buy and run the project as a private corporation?

a. Thomas Edison

b. Henry Ford

c. J. Paul Getty

d. Joseph P. Kennedy Sr.

Answers: 1(a); 2(d); 3(b); 4(c); 5(d); 6(b)

—Pauline Yuelys and Kenneth G. Pringle

***

—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer, Ben Levisohn