Exactly one year ago, the World Health Organization declared the COVID-19 outbreak a pandemic, acknowledging what seemed clear for some time - the virus would spread to nearly every country on the globe. Economies worldwide were upended as nations locked down to contain the virus (called novel at the time) and unemployment skyrocketed. Unprecedented amounts of monetary and fiscal stimulus also poured into the global economy, as many people got used to a stay-at-home world and extended gratitude to essential workers who helped keep things running.

In financial markets, the fastest bear to bull market recovery was seen as continuous waves of investors poured money into equities following one of the quickest crashes on record. Program after program was unveiled by the Fed, helping backstop those gains, while retail traders armed with stimulus checks and a commission-free trading environment helped return market sentiment to all-time highs. With a flood of stimulus measures saturating capital markets, billions of dollars also went to special acquisition companies, better known as "SPACs."

Fast forward: The rates of new infections and deaths have begun to fall nationwide. More than 62M Americans have already received one dose of a coronavirus vaccine (33M are fully vaccinated), and President Biden appears on track for his goal of vaccinating 100M people by the end of April (his first 100 days in office). On Wednesday, he announced plans to buy another 100M doses of Johnson & Johnson's (JNJ) single-shot vaccine, and with the doses from Pfizer (PFE) and Moderna (MRNA), it is more than enough supply to vaccinate every American.

Outlook: Biden is also set to sign another $1.9T emergency relief package after Congress gave final approval on Wednesday to one of the largest economic stimulus measures in American history. Stock futures climbed on the news overnight, with tech leading the rally: Dow +0.1%; S&P 500 +0.5%; Nasdaq +1.8%. Biden said he'd announce the "next phase" of the U.S. COVID-19 response this evening as the administration turns its focus to a multi-trillion dollar infrastructure package. Democrats say they want a bill with bipartisan support - unlike the most recent stimulus - but compromises would have to be worked out in many areas like climate change and racial equity.

Central Banking - Rising yields and inflation

All eyes are the European Central Bank this morning as worries over rising bond yields remain a concern for investors. No changes to rates or the amount of bond purchases are anticipated, though policymakers will decide whether rising borrowing costs are a threat to the EU's pandemic-stricken economy. While the ECB has a current quota to purchase €1T through next March, purchase volumes have decreased over the past two weeks.

Is a stronger response needed? The central bank may signal faster money printing to prevent financing conditions from tightening, though many are expecting verbal reassurances rather than actual changes to monetary policy. ECB President Christine Lagarde will also be keen not to overstate the rise in yields, which are still low by most standards. Still, the region's recovery is lagging far behind the U.S., where a broad vaccine rollout and $1.9T fiscal stimulus package are turbocharging a recovery.

"At a minimum, the ECB would want to forestall a further increase in yields from current levels and would probably prefer to engineer a decline," BNP Paribas said in a statement. "We would expect a reference to increased pace but not a firm commitment to buy certain amounts per unit of time."

What about inflation? The ECB will likely see a spike in consumer prices at the start of the year as temporary, which will speed up inflation in 2021 though it wouldn't continue in following years. Price growth in 2023 would be around the 1.4% level, which the ECB forecast three months ago. That means current revisions to inflation estimates should be marginal, leaving room for any upside shocks.

On The Move - The 'meme' trade is back

Shares of GameStop (NYSE:GME) jumped 18% in early trading on Wednesday, putting the video game retailer on track for its sixth session of gains, and even rose to an intraday high of $348.50. The stock was then halted after a plunge to around $200 per share, though it still closed the session up 7% at $265. This morning, GameStop is trending lower, down 11% to $236.

The swings weren't only limited to GME. Volatile trade saw headphone maker Koss (NASDAQ:KOSS) skyrocket nearly 70% on Wednesday, though its shares fell 12% overnight. Meanwhile, AMC Entertainment (NYSE:AMC) sold off before earnings yesterday, only to climb another 8% to regain the $10/level after its quarterly announcement.

What's happening? Some are pointing to renewed WallStreetBets squeezes that began in January, though only about 20.5% of GameStop’s share float is sold short, the lowest in at least three years. Others may already be factoring in the coming stimulus checks and the Reddit trades that may follow. Younger investors, who are likelier to receive the direct payments, are more inclined to invest in so-called "meme stocks," said Randy Frederick, vice president of trading and derivatives for Charles Schwab.

Analysis: GameStop bulls are hoping for a profit boost due to a transition to e-commerce, led by shareholder and Chewy.com founder Ryan Cohen, who is on the company's board, though many feel the run-up is pure speculation. "I think this is a cult stock," declared Michael Pachter of Wedbush Securities, saying even the most successful transition would not justify the stratospheric levels. To support a trading price of $235, GameStop would need to earn between $10 and $12 a share annually on a sustainable basis, he added, though he only expects the company to earn $1 a share for the fiscal year ending in January 2022. (16 comments)

Outlook - Board diversity plan

In addition to seeking further public comment on the matter, the SEC has postponed a decision on Nasdaq's (NASDAQ:NDAQ) proposal to require greater diversity on corporate boards. The exchange needs the approval for its plan to take effect, though a final decision is now only likely to be reached in the summer. The notice also didn't provide any color on the SEC's thinking, which has created tensions between those advocating for greater corporate diversity and those seeing it as an industry quota system.

What's the proposal? Companies listed on the Nasdaq would be required to have at least one woman on their boards, in addition to a director who is a racial minority or one who self-identifies as LGBTQ. Companies with small boards of five or fewer directors would be allowed to meet targets with just one diverse director instead of two. Companies would also be required to disclose diversity metrics regarding their boards, or explain in writing why they aren't doing so, and would be given a one-year grace period if they fall short of diversity targets.

The new delay means a decision will likely happen under President Biden's pick to lead the SEC: Gary Gensler. On Wednesday, he cleared a key hurdle toward becoming SEC chairman when the Senate Banking Committee approved his appointment. At a hearing earlier this month, Gensler indicated the agency could soon move to force companies to disclose more about their political spending, climate risks and board diversity.

Thought bubble: Nasdaq's proposal is another example of how Corporate America is emerging as an increasingly dominant political force. That power was traditionally limited to lobbying or marketing, though it is now developing into a kind of governance system. Think back to the silencing of President Trump on Twitter (TWTR), as well as Parler's removal from the Apple (AAPL) and Google (GOOG, GOOGL) app stores and web hosting by Amazon (AMZN).