Tesla, Lucid Motors, Elon Musk and Bitcoin - 5 Things You Must Know Tuesday

Stock futures fluctuate and the Nasdaq 100 is poised to extend its longest losing streak in four months; the U.S. tops 500,000 deaths from COVID-19; Lucid Motors going public in SPAC deal; bitcoin drops below $50,000.
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Here are five things you must know for Tuesday, Feb. 23:

1. -- Stock Futures Mixed as Tech Extends Losing Streak

Stock futures fluctuated Tuesday and tech stocks headed sharply lower after the Nasdaq 100 posted its longest losing streak in four months.

Contracts linked to the Dow Jones Industrial Average were up 4 points, S&P 500 futures fell 16 points and Nasdaq futures dropped 191 points.

Stocks closed mostly lower Monday and the Nasdaq dropped 2.46% to a three-week low with rising bond yields increasing worries that high-growth stocks will be more vulnerable to inflation pressures. 

The Nasdaq 100, the large-cap growth index, has fallen for five straight days, as has the broader S&P 500.

The 10-year Treasury yield traded at 1.367% on Tuesday, near 52-week highs.

Rising interest rates and fears of increasing inflation have put the brakes on strong gains made at the beginning of February. Despite recent losses, equities remain near all-time highs.

Investors will be monitoring what Federal Reserve Chairman Jerome Powell will say about inflation in testimony Tuesday before the Senate Banking Committee. The Fed chief likely will play down the risk of inflation despite President Joe Biden’s massive $1.9 trillion coronavirus relief plan.

Powell has cautioned in the past that inflation could rise, but only temporarily, as the economy reopens.

2. -- U.S. Tops 500,000 Deaths From COVID-19

The U.S. topped 500,000 deaths from COVID-19 on Monday, a somber milestone that comes amid growing hopes that vaccination programs have begun to cut into the rate of infection and spread of the deadly disease.

The United States continues to suffer an outsized impact compared with other countries.

The U.S. has only about 4% of the world’s population, but has suffered more than 20% of COVID-19 deaths, according to date from Johns Hopkins University. Global deaths from the virus have surpassed 2.47 million.

"That's more Americans who've died in one year in this pandemic than in World War I, World War II, and the Vietnam War combined. That's more lives lost to this virus than any other nation on Earth," said President Biden in an address to the nation Monday evening. "But as we acknowledge the scale of this mass death in America, we remember each person and the life they lived."

3. -- Tuesday's Calendar: Home Depot Earnings, Jerome Powell Testimony

Home Depot  (HD) - Get Report earned $2.65 a share in the fourth quarter, 2 cents higher than analysts' estimates. Sales of $32.26 billion also beat forecasts.

Macy's  (M) - Get Report posted stronger-than-expected fourth-quarter earnings and said current year sales could top $20 billion in what the retailer sees as a "recovery and rebuilding" year. 

Earnings reports are also expected Tuesday from Square  (SQ) - Get Report, Toll Brothers  (TOL) - Get Report, Dillard's  (DDS) - Get Report and McAfee  (MCFE) - Get Report.

The U.S. economic calendar for Tuesday include the Case-Shiller Home Price Index for December at 9 a.m. ET and Consumer Confidence for February at 10 a.m.

Federal Reserve Chairman Jerome Powell will speak Tuesday at 10 a.m. before the Senate Banking Committee. He will appear before the House Financial Services panel on Wednesday.

4. -- Lucid Motors Going Public in SPAC Merger

Lucid Motors, the electric vehicle startup, agreed to merge with a blank-check company started by investment banker Michael Klein that values the combined entity at a pro-forma equity value of $24 billion.

The merger between Lucid and Klein's Churchill Capital Corp IV  (CCIV) - Get Report is the biggest in a string of deals by EV makers such as Nikola  (NKLA) - Get Report and Fisker  (FSR) - Get Report that have gone public by combining with SPACs. They have been raising cash to compete with Tesla  (TSLA) - Get Report, the top electric vehicle company.

The deal will generate about $4.4 billion in cash for the 14-year-old Lucid, which plans to use the newly acquired funds to bring its first vehicles to market and expand its factory in Arizona, according to Bloomberg, which earlier had reported on the talks between Lucid and Churchill Capital.

“I see the SPAC as just a tool, another lever to pull on, where we can accelerate our trajectory,” Lucid CEO Peter Rawlinson said in an interview with Bloomberg. “This is a technology race. Tesla gets this. It’s why they are so valuable and Lucid also has the technology.”

Lucid said it would start production of its debut EV, a luxury sedan called the Air, in the second half of this year. The company had previously said deliveries of the $169,000 car would start in the second quarter.

Why Jim Cramer Is Eyeing EV SPACs

5. -- Bitcoin Drops Below $50,000

Bitcoin fell as much as 17% Tuesday after Treasury Secretary Janet Yellen said the world's largest cryptocurrency was an “extremely inefficient way of conducting transactions.”

“I don’t think that bitcoin … is widely used as a transaction mechanism,” she said in an interview at a New York Times DealBook conference. “To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”

At last check, bitcoin was down more than 14% to $46,992. It has soared about 400% over the past year.

Elon Musk, the CEO of Tesla, which made a $1.5 billion investment in bitcoin earlier this month, also questioned the digital token's rally.

In a tweet Saturday, Musk suggested that bitcoin prices “do seem high."

Musk's tweet also cost him the title as world's richest person. Tesla shares dropped 8.6% on Monday, wiping $15.2 billion from his net worth. Amazon.com  (AMZN) - Get Report founder Jeff Bezos reclaimed the top spot, according to the Bloomberg Billionaires Index of the world’s 500 richest people.

Tesla and Bitcoin Both Tumble After Musk’s Bitcoin Warning Shot