Newsletter Jul 30, 2021

The economy reached a milestone by returning to the pre-pandemic rate of growth, but the slow pace of recovery from the 1 1/2-year crisis continues.
3 things you must know

  • US economic growth slowly returns to pre-pandemic levels

    The good news: The US economy finally returned to pre-pandemic levels, according to data released by the Commerce Department. The bad news: The 6.5% annualized rate of growth in the second quarter was slower than expected, reflecting the impacts of inflation, supply chain issues, unemployment and the recent COVID spike.

    The mixed bag of news comes as President Joe Biden is trying to usher through his $1.2 billion infrastructure package, which was advanced by the Senate on Wednesday. Biden can point to the numbers as an example of how spending can help the recovery, but his Republican opponents have lots of valid counter-arguments.

    SEE WHAT THE NEW NUMBERS MEAN FOR THE RECOVERY

  • Markets advance behind variety of positive economic factors

    Investors got all the ingredients they needed to push stocks higher in Thursday's trading. Responding to positive data about the GDP and employment, eye-catching earnings reports from major companies, and a shot of confidence from both consumers and the Fed, all three major indices made gains and approached their recently set records.

    "You combine those three things, better data, better earnings, and... a patient Fed, you likely have an environment that's going to be advantageous for equities," one analyst said. It's a recipe that has investors licking their chops for resilient markets during the recovery.

    SEE WHAT THE NUMBERS MEAN FOR ECONOMIC RECOVERY

  • Biden calls for $100 payments to tempt the unvaccinated

    For millions of Americans who waited in line to book appointments to receive the COVID vaccine, perhaps they should have held out a little longer. After the private and public sectors have offered everything from free beer and doughnuts to million-dollar lotteries to convince people to get vaccinated, states may be upping the ante.

    President Joe Biden asked the states to use funds from the American Rescue Plan to pay residents $100 to get inoculated, but the C-note is not retroactively available to those who have already been jabbed. Of course, if the temptation to survive the deadly virus isn't enough to convince the anti-vax crowd, we doubt $100 will do it.

    FIND OUT WHICH STATES ARE ALREADY GIVING AWAY $100
Markets
DJIA 35,084.53 0.44%
S&P 500 4,419.15 0.42%
Nasdaq Composite 14,778.26 0.11%
Japan: Nikkei 225 27,343.45 -1.58%
UK: FTSE 100 7,078.42 0.88%
Crude Oil Futures 73.22 -0.54%
Gold Futures 1,829.50 -0.09%
Yen 109.48 -0.01%
Euro 1.19 -0.04%
* As of market close
Dems say they have the votes for $3.5T bill

The bipartisan votes to advance President Joe Biden's $1.2 trillion infrastructure proposal weren't dry before the political posturing began on both sides of the aisle. Senate Majority Leader Chuck Schumer is going for broke, wasting no time threatening to triple the price tag on the bill.

In an effort to pressure Republicans in negotiations (or maybe he's not bluffing), Schumer said he has the 50 votes, plus the tiebreaker from Vice President Kamala Harris, needed to push through $3.5 trillion in spending by using budget reconciliation rather than settling for the watered-down version favored by GOP leaders. The Dems' "human infrastructure" plan includes funds for childcare, healthcare, education and the environment. 

FIND OUT HOW REPUBLICANS REACTED TO THE POWER PLAY
Senate drafts bill to legalize marijuana

There is one potential piece of legislation in the works that could help bring Democrats and Republicans together in more ways than one. There is growing bipartisan support on an unlikely subject that once seemed unimaginable -- the Cannabis Administration and Opportunity Act.

Although we doubt we're going to see Nancy Pelosi and Mitch McConnell burning one down in closed negotiations (but if they do, please let it be live-streamed), the legalization and taxation of weed on a federal level has lawmakers reaching across the aisle. It would be welcome news for drug companies and the 37 states that have passed some form of legalization.

FIND OUT WHY PHARMACEUTICAL COMPANIES ARE FIRED UP

Nikola founder catches three counts of fraud

After allegedly making false claims about his company's crossover move to the electric vehicle market, Nikola founder Trevor Milton was feeling the jolt of a different kind of charge on Thursday -- as in three counts of fraud.

A grand jury agreed that Milton lied about “nearly all aspects of the business," including a promotional video that proclaimed he had captured the EV magic while showing Nikola's prototype truck rolling down an incline. Milton, who resigned as CEO last year under pressure from investors, was the company's lead shareholder while making the claims.

FIND OUT HOW MUCH NIKOLA'S STOCK DROPPED ON THE NEWS

Car trouble

Nikola founder Trevor Milton isn't the first innovative carmaker/accused con man to face off with the feds. What financier was acquitted of cocaine trafficking in the 1980s, and what movie franchise made his car famous?

Thursday's answer: While the US is the runaway leader for the most Olympic medals in the modern Games, the race for second place is tight. Entering the Tokyo Summer Games, the UK (883) held a slight edge over Germany (855) and France (840). The trio's total still trails the US (2,827).

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