Weekend Update #257
Thank you for your continued support and engagement. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
Equities gained this week, ending just shy of all-time highs, as bets on Fed rate cuts helped extend the Thanksgiving week rebound. Data from Black Friday and Cyber Monday showed consumers remained resilient in holiday spending, calming fears around a weakening labor market limiting consumption. Michael and Susan Dell announced a $6.25 billion donation on Tuesday to provide $1,000 investment accounts for newborn Americans. They joined President Trump in a press conference to discuss the new philanthropic effort, nicknamed “Trump accounts”, to provide economic stability and greater financial awareness broadly to Americans throughout life. Other political focus this week was on increasing tensions between the U.S. and Venezuela, as the U.S. has deployed a fleet of warships and increased attacks against the boats of drug cartels.
In economic data for the week, ISM Services showed business activity in November reaching a 3-month high, while prices businesses paid for services and materials slowed to the lowest in 7 months. The ADP Employment report showed private jobs were cut by 32,000 in November, a surprise loss when economists expected job gains and the lowest level since March 2023. The Challenger Report showed U.S. companies cut 71,000 jobs in November, a slowdown from the 153,000 cuts reported in October but still the worst November reading since 2022. Initial Jobless Claims fell to 191,000 in the week ended November 29th, which was a 3-year low on new unemployment claims. Consumer Sentiment rebounded slightly in December as Americans reported better outlooks on personal finances and the labor market. A delayed Personal Consumption Expenditures report from September also helped support the case for rate cuts, coming in line with expectations at 0.2% month-over-month and 2.8% year-over-year. On balance, economic data show some continued slowing in activity but with enough resilience that rate cuts could support what Fed Chair Jerome Powell called a “curious balance” in labor markets.
In stock-specific news this week, Netflix announced Friday that it will acquire Warner Bros., including HBO and HBO Max, for $72 billion. The deal would further bolster Netflix’s rapid dominance of the TV and film industry, helping to broaden the distribution of content from both companies. Reports Thursday suggested Meta Platforms is seeking budget cuts in its metaverse division of up to 30% while aiming to cut around 10% of budgets across all divisions, giving a boost to shares as investors have been concerned about high levels of AI investment. Costco joined a group of businesses suing the Trump administration to recoup funds if the Supreme Court rules the president’s global tariffs as illegal. On Monday, Nvidia announced a strategic partnership and $2 billion investment in Synopsys to broaden adoption across industries, advance agentic AI engineering, enable digital twins, and develop joint go-to-market initiatives. Next week, investors will look to the FOMC’s December interest rate decision on Wednesday to confirm what the market has priced as a 96% probability of a 25 basis point rate cut.
Friday’s Close (Weekly Performance)
S&P 500 6,870.40 (+0.31%)
Nasdaq 23,578.13 (+0.91%)
Dow Jones 47,954.99 (+0.50%)
Thank you Blue Room Senior Analyst JARED FENLY
10% OF ALL BLUE ROOM REVENUES GO DIRECTLY TO FUND OUR NON PROFIT TOGETHERISM.
WE CAN ACCOMPLISH ANYTHING TOGETHER.
These materials do not purport to be all-inclusive or to contain all the information that a prospective investor may desire in considering an investment. These materials are intended merely for preliminary discussion only and may not be relied upon for making any investment decision. Any discussion or information contained in this presentation does not serve as a receipt of, or as a substitute for, personalized investment advice from Blueroom or your advisor.
This publication does not constitute an offer to sell or a solicitation to buy any securities in any fund, market sector, strategy or any other product. Investing is speculative and involves substantial risks (including, the risk of loss of the investor’s entire investment). Past performance is not indicative of future results, and there can be no assurance that the future performance of any specific investment, investment strategy, or product will be profitable.
For more information about us and our general disclosures contact us directly.