Notable market news this past week (27-Oct-24)
Here is the Skeptivest roundup of the latest market headlines for the week
📱 Apple’s Strategic Positioning in China
Strengthening presence amid economic challenges: Tim Cook’s second China visit in 2024 highlights Apple’s ongoing commitment to the region. Publicized investment plans aim to support China’s economy, which has faced recent outflows of foreign investment. Apple’s reinforced support aligns with government efforts to attract foreign capital, crucial for economic revitalization.
Navigating AI integration and regulatory hurdles: Apple is eager to bring ChatGPT-integrated AI features to Chinese users but faces regulatory barriers. The government mandates approval before launching generative AI services, a challenge for all foreign tech firms. Potential partnerships with local giants like Alibaba or Baidu could facilitate compliance and enable AI feature rollouts.
Adapting to local market dynamics and data security concerns: Apple’s data security initiatives, like a China-based data center and iCloud data management partnerships, align with local regulations. These moves have helped Apple gain trust in a market where data security is highly prioritized by authorities.
☕️ Quick fire happenings to note
🌏 Global macro
- US confirms North Korea deployed troops to Russia: Defense Secretary Lloyd Austin confirmed that North Korea has deployed 3,000 troops to Russia for training, with plans to send a total of 10,000 to support the war effort against Ukraine, highlighting the seriousness of this development amid Russia's manpower shortage and ongoing arms supplies from North Korea.
- Air taxis are one step closer to takeoff: The FAA’s new regulations for eVTOL air taxis mark a major step forward for this emerging industry, allowing companies like Joby and Archer, backed by significant airline and carmaker investments, to develop air taxi services, although challenges remain as seen with Lilium’s recent funding setback.
- Asset managers see strong economy regardless of election outcome: Blackstone CEO Steve Schwarzman stated that a recession is unlikely regardless of the election winner, highlighting a “pretty strong” economy supported by stimulative policies, while Bank of America CEO Brian Moynihan also anticipates “no landing” and advises cautious interest rate cuts by the Federal Reserve.
- Impact of potential Republican sweep on markets and treasury yields: The prospect of a Republican sweep in the upcoming election is a key focus, with expectations that it could lead to increased spending and tax cuts, potentially exacerbating inflation and contributing to a selloff in the Treasury market, which is already experiencing significant declines, including a projected 10-year yield of 4.25%.
🏦 Individual stocks/companies
- China's self-driving startup WeRide's shares surge in Nasdaq debut: WeRide's, shares rose 19% in their Nasdaq debut on Friday, after the self-driving startup raised $440.5 million in its IPO and private placement, becoming the latest Chinese firm to capitalize on improving market sentiment.
- Waymo raised $5.6 billion to expand robotaxi service: Waymo raised $5.6 billion in a Series C round led by Alphabet and other investors to expand its robotaxi services from current operations in LA, San Francisco, and Phoenix to Austin and Atlanta, aiming to outpace competitors like Tesla and Cruise.
- Meta’s Losing AR Developers to Snap: Bloomberg reported on Wednesday that Meta is bleeding third-party augmented reality developers to its rival, Snap. This is in large part because the company closed down its AR studio to redirect funds to AI development, despite just launching a pair of AR glasses.
- Big luxury brands merger hits speedbump: A federal judge granted the FTC’s request for a preliminary injunction against Tapestry's $8.5 billion acquisition of Capri, citing concerns that the merger could increase handbag prices and negatively impact employee wages and benefits.
- Apple cutting production of Vision Pro: Apple is reducing production of its $3,500 Vision Pro VR headset due to slow sales, with reports indicating that assembly may cease next month, as demand remains low despite plans for a more affordable VR model by 2026.
🇸🇬 Singapore related
- Oil pipeline leak: Swimming, water activities at East Coast Park, Southern Islands can resume, says NEA: Swimming and water activities at East Coast Park and the Southern Islands may resume, after an advisory was lifted in the wake of an oil pipeline leakage last weekend.
