Notable market news this past week (17-Nov-24)
Here is the Skeptivest roundup of the latest market headlines for the week
📱 Nvidia navigates trade risks amid unprecedented growth
AI-driven growth dominance: Nvidia has tripled its market cap in 2024, driven by surging AI demand, with robust domestic investments from major U.S. tech giants like Microsoft, Alphabet, Amazon, and Meta.
Resilience to trade tensions: Despite trade sanctions reducing its China revenue exposure from 25% in 2021 to 12% in the last quarter, Nvidia’s earnings have soared, making it a leading profit growth driver in the S&P 500.
Potential risks from tariffs: While a universal tariff could pressure Nvidia, its dominant position in the booming generative AI market, with projected spending of $200 billion by 2025, and strong demand for its new Blackwell chips are expected to cushion any trade-related impacts.
Chances Trump imposes "large" tariffs in his first year: 71% as defined by the prediction market Kalshi as roughly doubling to a 6% average-weighted tariff.
☕️ Quick fire happenings to note
🌏 Global macro
- Xi Jinping defends globalization amid trade tensions: Chinese President Xi Jinping, at APEC and G20 summits, reaffirmed support for globalization, cautioning against protectionism following U.S. President-elect Trump's tariff threats.
- Fed holds steady amid rate cut speculation: Fed Chair Jerome Powell signaled no urgency to lower rates, rattling markets as traders adjusted expectations amid rising inflation and policy uncertainty.
- US inflation slightly rises, but no cause for concern: October's 2.6% annual inflation rate met expectations and signals a continued downward trend, with investors anticipating potential Fed rate cuts in December.
- RFK Jr.’s cabinet nomination tanks pharma stocks: Pharma stocks plunged as RFK Jr.'s nomination for Health Secretary fueled fears of increased vaccine skepticism, stricter FDA oversight, and slower drug approvals.
- Crypto soars as traditional markets cool: While U.S. stocks retreat post-election, crypto thrives with record inflows and soaring valuations, raising concerns of a speculative bubble akin to the dotcom era. Investors poured a record $6 billion into crypto funds in the week through Wednesday, according to Bank of America, and the entire crypto industry is booming. The president-elect has pledged to implement a game-changing regulatory agenda in favor of digital assets while creating a strategic US stockpile of Bitcoin.
- Buffet bought Domino's and Pool Corp: Berkshire Hathaway bought stock in Domino’s Pizza and Pool Corp. last quarter, regulatory filings show. Shares of the pizza retailer are jumping 7.6% in pre-market trading. The pool equipment distributor is up 6.3%.
🏦 Individual stocks/companies
- ByteDance’s Valuation rises to c$300 billion: TikTok parent ByteDance is valuing itself at about $300 billion, one of its highest valuations ever, even as the Chinese tech giant’s popular TikTok app faces the prospect of a looming ban in the U.S.
- Grab (+30.66% past 1 month) and Sea Ltd (+10.86% past 5 days) posted strong 3Q24: Both Grab and Sea rallies with solid Q3 results. Grab achieves Q3 net income profit and raises full year 2024 revenue guidance. Sea stock jumps at the back of revenue growth expectations beat. Shopee also turns Adj. EBITDA profitable in both Asia and Brazil.
- Disney (+16.24% past 5 days) rallies at the back of EPS beat: Disney posted a 39% increase in EPS, ahead of Wall Street’s expectations of 34%. Importantly, the company is guided for double-digit increases next year in its entertainment, sports, and experiences divisions.
- Spotify (+12.87% past 5 days) rallies with solid op metric despite revenue/earnings miss: Spotify missed sales and earnings expectations but reported 11% MAU growth and 12% rise in premium subs, with Q4 operating profit guidance exceeding estimates.
- Amazon launches discount storefront to compete with Shein and Temu: Amazon Haul, a mobile-only platform offering ultra-discounted products, aims to counter rivals by selling items under $20, though with longer delivery times and shipping fees for small orders.
🇸🇬 Singapore related
- Singapore set to host APEC Summit in 2030: Singapore has offered to host the Asia-Pacific Economic Cooperation (APEC) Summit in 2030, Prime Minister Lawrence Wong said on Saturday. APEC continues to be an important platform for economic cooperation and the 21 member economies collectively make up nearly half of global trade, Mr Wong said at the close of this year’s summit in Lima, Peru.
