1. US Credit Card Spending Surpasses $1 Trillion;
2. Nike Revenue Falls, Shares Plunge;
3. US New Home Sales Unexpectedly Drop;
4. Texas Leads Nation in Municipal Bond Issuance;
5. Lionsgate Studio to Go Public via SPAC Merger;
6. China’s Online Gaming Crackdown Sends Tencent Shares Plummeting;
7. Duolingo Subleases Spotify’s Office Space.
1. US Credit Card Spending Surpasses $1 Trillion
According to the latest data from the New York Fed, US credit card spending totaled $48 billion in Q3, pushing the annual total to $1.08 trillion—signaling that “revenge spending” and travel are still buoying the economy.
With the holiday shopping season yet to peak, totals may continue to rise, and consumers appear unfazed by APRs exceeding 20%.
Although stock markets have rebounded and wages are steadily increasing, 40% of Americans have depleted their pandemic savings, and millions are unable to make student loan, auto loan, or mortgage payments. As a result, many have turned to credit cards to cover basic daily expenses.
Buy-now-pay-later (BNPL) loans are not included in these figures, meaning true consumer debt levels may be even higher.
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2. Nike Revenue Falls, Shares Plunge
Sportswear giant Nike Inc. reported disappointing earnings today and announced job cuts aimed at saving up to $2 billion.
The company brought in $13.4 billion in revenue for the quarter, but sales in China fell short of expectations. Nike now projects just 1% revenue growth for fiscal year 2023, with a slowdown in online sales as well.
CFO Matt Friend said in a call that global consumers are spending more cautiously, especially in China and Europe.
Nike disclosed that its restructuring costs this quarter could reach $400–$450 million, mostly for employee severance packages.
Following the weak report, Nike shares plunged 12%, the biggest drop since September 2022.
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3. US New Home Sales Unexpectedly Drop
Government data released today shows that sales of new single-family homes dropped 12.2% in November to a seasonally adjusted annual rate of 590,000, well below the expected 690,000. The largest decline occurred in the South, down 21%.
Robert Frick, corporate economist at Navy Federal Credit Union, noted that while new home starts hit a record last week, the weak November sales aren’t a major concern. He expects the market to rebound in 2024 as interest rates decline.
The median price of a new home fell 6% year-over-year to $434,700.
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4. Texas Leads Nation in Municipal Bond Issuance
This year, the state of Texas issued $58 billion in municipal bonds for schools, water infrastructure, and airport upgrades—surpassing every other state for the first time since 1990.
Keith Richard of Siebert Williams Shank & Co., head of the firm’s Texas operations, jokingly remarked that Texas has become the best place in the country to be a muni banker.
According to the US Census Bureau, only California and Texas have populations exceeding 30 million. Texas continues to benefit from low living costs and a business-friendly climate.
Since 2000, Texas has added 9 million new residents—3 million more than Florida.
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5. Lionsgate Studio to Go Public via SPAC Merger
Lionsgate, the entertainment company behind major IPs like The Hunger Games, Twilight, and John Wick, plans to spin off its studio business and merge with SPAC Screaming Eagle Acquisition Corp.
The SPAC is led by Hollywood veterans Harry Sloan and Jeff Sagansky.
The new entity, Lionsgate Studio, will focus on film and television production, talent management, and content sales.
Lionsgate’s parent company expects to receive $350 million—half from the SPAC and half from a post-merger private investment (PIPE).
Lionsgate will retain 87.3% ownership of the new company, with Screaming Eagle holding the remainder.
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6. China’s Online Gaming Crackdown Sends Tencent Shares Plummeting
On Friday, China’s gaming regulator released a draft of new rules designed to curb game companies from encouraging excessive spending and prolonged play.
The proposed rules include banning in-game rewards for frequent logins, among other measures.
The announcement triggered a selloff in shares of Tencent and other gaming giants, wiping out $80 billion in market value amid fears of another crackdown.
Tencent shares fell 16%—their largest drop since 2008—while NetEase plunged 29%.
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7. Duolingo Subleases Spotify’s Office Space
Language-learning platform Duolingo has subleased 85,666 square feet of office space from Spotify at 4 World Trade Center. The lease starts January 1 and runs through April 29, 2034.
Duolingo will pay $62 per square foot, rising to $67 starting in year six.
Spotify has been the anchor tenant at the 72-story building since 2017, occupying 564,000 square feet. The company began scaling back in 2021 as it embraced remote work.
Earlier this month, Spotify also announced it would lay off 17% of its workforce—about 750 employees in New York.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.