The daily business briefing: February 9, 2021
Stock futures flat after Dow and S&P hit record highs, Democrats consider quick minimum wage hike to $9.50, and more
Dow, S&P 500, and Nasdaq set records
The Dow Jones Industrial Average, the S&P 500, and the Nasdaq closed at record highs on Monday. The Dow and the S&P 500 rose by 0.8 percent and 0.7 percent after a sixth straight day of gains. The tech-heavy Nasdaq gained 1 percent. U.S. stock index futures inched lower early Tuesday. All three of the main U.S. indexes were down by less than 0.1 percent several hours before the opening bell. Wall Street has been getting a boost from strong earnings reports, improving coronavirus data, and Democrats' push for President Biden's $1.9 trillion coronavirus relief package. "We are still very much in a bull market at the early stages of an economic recovery that's gaining momentum," Michael Wilson, chief U.S. equity strategist at Morgan Stanley, said in a note.
Democrats consider raising minimum wage to $9.50 this year
House Democrats are discussing a plan to gradually raise the federal minimum wage to $15 per hour, starting with an increase from the current minimum wage of $7.25 to $9.50 within the year. Democrats are looking to include the first hike to the federal minimum wage since 2009 in President Biden's coronavirus relief bill. They plan to revise the proposal Tuesday, but it currently calls for increasing the minimum annually until it reaches $15 in 2025. The nonpartisan Congressional Budget Office said in a report released Monday that raising the minimum wage to $15-an-hour would lift 900,000 people out of poverty and raise 17 million people's income, but cost about 1.4 million jobs by 2025. Net pay to American workers would increase by $333 billion.
Tesla support helps lift bitcoin price to record high
Tesla revealed Monday in a regulatory filing that it had bought $1.5 billion in bitcoins in January and that it might soon start accepting the digital currency for payments. The news sent bitcoin prices to record levels, soaring by 15 percent to $44,203 on Monday, then as high as $48,000 early Tuesday. Tesla's founder and CEO, Elon Musk, has recently spoken out in favor of cryptocurrencies via social media. Late last month, he tagged bitcoin in his Twitter bio and tweeted, "In retrospect, it was inevitable." Tesla is among the larger companies to accept bitcoin. Institutional investors also are showing increasing interest in cryptocurrencies as assets, fueling bitcoin's recent record rally.
Democrats reject lower cutoff for stimulus checks
Leading House Democrats on Monday rejected a call to reduce the number of people who would receive direct coronavirus relief payments, and proposed sending $1,400 stimulus checks to individuals earning up to $75,000 a year, and married couples making $150,000. House Ways and Means Chairman Richard Neal (D-Mass.) released the legislation after some Democrats had suggested narrowing eligibility to $50,000 for individuals and $100,000 for married couples. The proposal for broader stimulus-payment eligibility suggested that momentum is building for Democrats to push through President Biden's $1.9 trillion economic relief package with or without Republican support. The individual payments would decrease sharply for those with higher incomes, with individuals making $100,000 or couples earning $200,000 receiving no payments.
Reddit valuation doubles in latest fundraising round
Reddit said Monday that it raised $250 million in a new round of funding led by venture capital firm Vy Capital. The funding doubled the social media company's valuation to $6 billion compared to its value in its last funding round two years ago. Reddit has added users during the coronavirus pandemic, and attracted attention as users of the Reddit "WallStreetBets" message board fueled frenzied buying of GameStop and several other previously downtrodden stocks. "It's a good market to fundraise," Reddit Chief Executive Steve Huffman said. "Valuations are very high right now. It never hurts to raise money when there's an opportunity to do so and Reddit had a strong year."