1. U.S. Companies Hire More Than Expected, Wage Growth Slows;
2. Eli Lilly Warns Against Using Weight-Loss Drugs for Fitness;
3. AQR’s Value Investing Delivers Another Win;
4. Apple Becomes Most Shorted Tech Giant;
5. Amer Sports Files for IPO;
6. TikTok Ambitiously Challenges Amazon;
7. Commercial Real Estate Lending Volume May Rebound This Year.
1. U.S. Companies Hire More Than Expected, Wage Growth Slows
According to data released today by the ADP Research Institute, U.S. companies added 164,000 jobs in December—the highest since August and exceeding nearly all economists’ expectations—even though wage growth has slowed.
Leisure, hospitality, education, and healthcare saw the largest hiring gains, while manufacturing posted job losses for the fourth straight month. Employment rose in the Western and Northeastern U.S., but fell in the South and Midwest.
Despite signs of weakening hiring demand, companies are still hiring at a healthy pace, and unemployment remains low.
The report also showed that in December, wages rose 5.4% year-over-year for those who stayed in their jobs, and 8% for job switchers—both the lowest figures since 2021.
ADP’s economists said the U.S. job market is gradually returning to pre-pandemic norms.
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2. Eli Lilly Warns Against Using Weight-Loss Drugs for Fitness
Pharmaceutical company Eli Lilly & Co. issued a statement today warning that its popular diabetes drug Mounjaro and weight-loss drug Zepbound were designed to treat serious medical conditions and should not be used by people aiming for “cosmetic” body improvements.
Currently, patients without Type 2 diabetes or obesity are not eligible for the drugs. TikTok influencers and celebrities like Elon Musk have publicly shared their success with drugs like Wegovy, fueling overwhelming demand and supply shortages that leave those with medical needs unable to access them.
Sales of weight-loss drugs are projected to exceed $80 billion by 2030.
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3. AQR’s Value Investing Delivers Another Win
Sources say that in 2023, AQR Capital Management’s longest-running multi-strategy fund posted an 18.5% return, following a record 43.5% gain in 2022.
The strong performance was driven by excellent stock-picking and successful macro and commodity value strategies.
Founded in 1998 by Cliff Asness after he left Goldman Sachs, AQR has long championed investments in value stocks with high cost-effectiveness.
Although the 2023 return trailed 2022, it was still solid given that the U.S. stock market was led by growth stocks last year. AQR’s pure value strategy fund returned 20.6% in 2023.
AQR’s Apex Fund, launched in 2020, combines macro, equity, and arbitrage strategies.
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4. Apple Becomes Most Shorted Tech Giant
Due to concerns that Apple lacks innovation and iPhone demand will continue to weaken, Piper Sandler analyst Harsh Kumar downgraded the company’s stock today.
Kumar wrote that iPhone inventory buildup could become an issue and that revenue growth may have peaked. He downgraded the stock from Neutral to Underweight, just days after Barclays issued a similar downgrade.
According to Bloomberg data, Apple now has the smallest share of “Buy” ratings among major tech companies, with bullish sentiment at a three-year low.
Apple is the only major tech company to post declining revenue for four consecutive quarters.
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5. Amer Sports Files for IPO
Amer Sports—the parent company of brands like Wilson tennis rackets and Salomon running shoes—has officially filed for a U.S. IPO under the ticker symbol AS.
The company hired Goldman Sachs, Bank of America, JPMorgan, and Morgan Stanley as lead underwriters.
Sources say Amer Sports aims to raise $1 billion in the offering, with a potential valuation of up to $10 billion.
Founded in Finland, Amer Sports is backed by Chinese sportswear giant Anta Sports, which also owns Arc’teryx and Atomic.
Amer Sports has more than 10,000 employees worldwide and generated $3.5 billion in revenue in 2022.
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6. TikTok Ambitiously Challenges Amazon
Sources say ByteDance-owned TikTok aims to boost the gross merchandise volume (GMV) of its U.S. e-commerce operations tenfold this year to $17.5 billion.
This ambitious target could increase pressure on Amazon, as well as Chinese rivals Temu and Shein. TikTok’s edge lies in leveraging viral videos to attract buyers.
Last year, TikTok generated $20 billion in product sales on its platform, with Southeast Asia as the biggest contributor. The company plans to expand its e-commerce presence in the U.S. and Latin America.
In 2023, ByteDance revenue surged 30% to over $110 billion, surpassing Tencent and Meta.
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7. Commercial Real Estate Lending Volume May Rebound This Year
The Federal Reserve has raised benchmark interest rates to a 22-year high of 5.25% to 5.5%. However, based on current economic trends, markets expect rates to fall to 4.6% this year and to 2.9% by the end of 2026—a positive development for commercial real estate borrowers and lenders alike.
On December 15, the 10-year U.S. Treasury yield—a key benchmark for real estate loan rates—fell to 3.91%, down from 4.37% in November.
Steven Caldwell, Head of Large Debt Issuance at Barclays, said the Fed’s dovish tone at its December 13 meeting boosted borrower confidence. December turned out to be the busiest month for debt issuance in four years.
Barclays is one of the first banks to offer five-year fixed-rate loans—ideal for companies needing short-term liquidity.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.