For the week ending March 6th - the S&P 500 increased by 0.8%, the NASDAQ decreased by 2.1% and the Dow Jones Industrial Average increased by 1.8%. The NASDAQ has continued its decline from the all time high on February 16, 2020.
The decline in growth stock prices is a reaction to heavy sell-off of U.S. government bonds. 10-Year Treasury rates have remained at about 1.5% through the week. Market participants continue to expect U.S would experience high inflation from Biden's $1.9 trillion stimulus package and re-opening of the economy post-pandemic. It remains uncertain whether this would lead to the U.S. Federal Reserve taking measures to manage the yield curve.
U.S. Bureau of Labor Statistics released Non-farm Payroll data for February 2021 on Friday, March 5th and it showed U.S. economy added 379,000 jobs (much higher than the gain of 182,000 jobs expected by analysts). An increase in the jobs was expected as COVID-19 restrictions started to relax as new infection case count continued to lower and increase in pace of vaccination.
Strong increase in jobs during February further added to inflationary fears and may have possibly led market participants to sell innovative, high growth potential stocks and move into stable, cash flow producing stocks.
Mergers & Acquisitions Updates:
Okta (ticker: $OKTA) announced
it has agreed to acquire Auth0
, a developer-centric Single Sign On (SSO) identity platform on Wednesday, March 03. Okta has proposed to acquire Auth0 for $6.5 billion in $OKTA shares. Todd McKinnon, the CEO of Okta on his comments on the Auth0 during the
Q4 2020 Earnings Call
shared - "They've [Auth0] grown the company on a trajectory to generate over $200 million in ARR here in FY '22, representing growth of over 50%. Like Okta, Auth0 has a highly recurring revenue stream that is very loyal."
Square (ticker: $SQ) announced
it has agreed to acquire a majority stake of TIDAL
, a music streaming service, on Thursday, March 04. Square has proposed to acquire the stake for $297 million in a mix of cash and $SQ shares from artists shareholder group led by Shawn Carter "Jay-Z". Jay-Z will join Square's board of directors and will continue to be co-owner of TIDAL after the the acquisition. TIDAL will operate independently within Square.
its video streaming service Paramount+ on Thursday, March 04. Paramount+ is a bundled offering of live sports, breaking news, and a collection of TV shows and popular movies from ViacomCBS' brands and production studios - BET, CBS, Comedy Central, MTV, Nickelodeon, Paramount Pictures and the Smithsonian Channel.