1. U.S. Companies Slow Hiring, Supporting Rate Cuts;
2. ByteDance Accumulates $50 Billion in Cash;
3. Indian Stock Market Surpasses $4 Trillion;
4. Apple Prepares New Products to Reverse Sales Slump;
5. Investors Speculate on Bitcoin via Options;
6. Muddy Waters CEO Shorts Blackstone Mortgage Fund;
7. BlackRock to Launch Generative AI Tools.
1. U.S. Companies Slow Hiring, Supporting Rate Cuts
A joint report by the ADP Research Institute and Stanford Digital Economy Lab showed that in October, U.S. private-sector firms added 103,000 jobs—below economists’ expectations of 130,000.
Companies in education, healthcare, and transportation led hiring, but leisure and hospitality posted their first layoffs since February 2021.
ADP’s chief economist Nela Richardson stated that both economic growth and hiring will clearly slow in 2024.
Today’s data once again signals a cooling labor market, which supports the case for the Federal Reserve to cut interest rates soon.
In November, wages for employees who remained in their jobs rose 5.6% year-over-year, while those who switched jobs saw an 8.3% increase.
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2. ByteDance Accumulates $50 Billion in Cash
Sources say that by mid-2023, TikTok parent company ByteDance had amassed $51 billion in cash reserves, with only $12 billion in debt.
The company has announced a $5 billion stock buyback at a $260 billion valuation to reward shareholders. Last summer, ByteDance bought back employee shares at a $300 billion valuation, indicating a dip in value since then.
Currently, TikTok and Douyin have a combined 3 billion monthly active users. In Q2, 2 billion of those logged in daily.
By comparison, Meta has nearly 4 billion active users, with 3 billion logging in daily.
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3. Indian Stock Market Surpasses $4 Trillion
On Tuesday, India’s stock market reached a total valuation above $4 trillion for the first time, ranking fifth globally and quickly narrowing the gap with Hong Kong.
Over the past three years, Indian equities have added $1 trillion in value, standing out among emerging markets.
Year-to-date, India’s key indices are up 13%, while Hong Kong’s are down 17%, with its market cap falling below $4.7 trillion.
India’s stock indices have risen for eight consecutive years, outperforming most emerging markets.
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4. Apple Prepares New Products to Reverse Sales Slump
Sources revealed that to combat declining Mac and iPad sales, Apple plans to launch refreshed product lines early next year, including new iPad Air, iPad Pro, and MacBook Air models.
For the first time, the iPad Air will be available in two sizes. The iPad Pro will upgrade to OLED displays, and the MacBook Air will feature the new M3 chip.
Mac and iPad sales account for 15% of Apple’s revenue and are more sensitive to shifts in consumer spending.
In 2023, Apple didn’t release any new iPad models, which worsened the iPad’s sales decline.
Next year will mark the debut of a 12.9-inch iPad Air.
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5. Investors Speculate on Bitcoin via Options
Deribit data shows investors are betting the U.S. SEC will approve a crypto ETF in January. As a result, many are buying call options wagering Bitcoin will hit $50,000 by January 26.
According to CCData, total crypto spot and derivatives trading volume surged 40.7% in November to $3.61 trillion—the highest since March.
With options, investors can profit from market trends without directly owning cryptocurrency.
The collapse of major crypto firms is fading from memory, and investors are returning to digital assets.
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6. Muddy Waters CEO Shorts Blackstone Mortgage Fund
Carson Block, CEO of research firm Muddy Waters, warned that Blackstone Mortgage Trust is facing the worst possible economic and commercial real estate conditions.
The fund mainly issues loans backed by commercial property. Muddy Waters believes it could face defaults and liquidity issues, and that shareholder dividends could be halved.
Block predicts that in the second half of 2024, borrowers may fail to refinance or repay loans, forcing the fund to increase collateral.
He estimates the fund’s real estate book value could drop by $2.5 billion to $4.5 billion.
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7. BlackRock to Launch Generative AI Tools
BlackRock, the world’s largest asset manager, announced it will roll out generative AI tools for clients starting in January.
Companies worldwide are adopting AI to develop new products and analyze critical financial data. Currently, 8% of BlackRock’s revenue comes from AI products. The firm aims to use AI to pull ahead of competitors in the sector.
BlackRock is also developing tools to help portfolio managers collect financial and alternative data. In January, it will also deploy productivity-boosting AI across its employee Office 365 platform.
Executives believe AI will reduce fixed costs more effectively than margin expansion.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.