⌚️🙅🏻♀️ Apple Halts Apple Watch Sales
Happy almost-holidays!
I am not going anywhere for Christmas, mostly because my hometown is thirty minutes south of San Francisco, so I will be in the Bay Area. What has really been the most surprising to me this year has been the amount of gains we’ve seen in the stock market despite the fact that this was supposed to be the year of the “recession”. In fact, if you had told me 1 year ago we would be where we are at today (with the S&P 500 nearing all time highs), I probably would not have believed you.
It really goes to show you that the economy and the stock market are not the same thing, and although many are feeling the cost of living increases across the board in the U.S. and other countries… the stock market doesn’t really care (for now).
I’m in the middle of writing a video right now about the squeeze that is occurring on the Middle Class, and that video should be out in the New Year, but there are some startling statistics and data that we’ll be sharing in that video.
The Discord community is almost ready to go, look out for an invite to it in the next week or two, it’s completely free - there will be channels where you can talk to other like-minded individuals about everything personal finance, and there’s even a channel where you can ask me any question you’d like, and I will get back to you at my earliest convenience. I’m really pumped for it.
By the way, I know we usually sign these editions off with Humphrey, Rickie, and Tim, but I wanted to be clear up: the Intro is typically written by me, Humphrey, and the body is written by Rickie and Tim - and I personally read it before it goes out. Hopefully that clears up who is actually writing these!
Enjoy your holidays!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
4️⃣ Trevor Milton Gets Four Years in Prison for Deceptions on Zero-Emission Trucks (WSJ)
🤝 Big Tech’s Year of Partnering Up With AI Startups (Bloomberg)
📈 More Americans Than Ever Own Stocks (WSJ)
👨🎓 Millions of Student Loan Borrowers Still Aren’t Making Payments (Bloomberg)
📦 Here’s how the Houthi attacks in the Red Sea threaten the global supply chain (CNBC)
🏘️ How the Housing Market Slowdown Is Rippling Through the Economy in Five Charts (WSJ)
🤖 GPT and other AI models can’t analyze an SEC filing, researchers find (CNBC)
👨⚖️ Trump Barred from Colorado Ballot in Unprecedented Ruling (Bloomberg)
The Weekly Brief
1. Apple to Halt Watch Sales to Comply With U.S. Import Ban (WSJ)
Apple is set to halt sales of the Apple Watch Series 9 and Apple Watch Ultra 2 in the United States following a U.S. Trade Commission ruling in October that found Apple violated patents related to a blood-oxygen sensor.
The ban, effective from December 21 online and after December 24 in stores, doesn't affect the older SE model or previously sold watches.
This decision comes amid a challenging period for Apple, which has seen a decline in overall sales for the first time since 2019 and faces various business hurdles, including legal battles with other companies, regulatory changes in Europe, scrutiny over its search arrangement with Google, and challenges in the Chinese market.
2. Adobe Has $6B for AI and Buybacks After Figma Deal Collapses (Bloomberg)
Adobe’s failed $20B deal for Figma leaves the software company with $6B in cash that it will likely use to accelerate AI development and buy back stock.
Adobe has been rapidly investing in generative AI ever since investors raised concerns stemming from increased traffic by younger audiences to web-based platforms such as Canva.
The investment into AI has since paid off, with Adobe stock gaining 77% this year.
For now, investors seem happy with the prospect of extra cash for share buybacks.
3. General Mills Echoes FedEx With Warning About Weaker Demand (CNBC)
Both General Mills and FedEx weighed in on slowing demand in their earnings reports this week.
General Mills echoes FedEx, saying tepid demand and pricing pressure were compounding problems.
General Mills revised its full-year sales outlooks, slashing revenue down 1% to flat, compared with previous guidance of a 3%-4% increase.
CEO Jeff Harmening said the company saw “a slower-than-expected volume recovery in the second quarter amid a continued challenging consumer landscape.”
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Chart of the Week
Investors are displaying the highest optimism since early 2022, driven by expectations of policy easing by the Federal Reserve, as indicated by a recent Bank of America survey of fund managers.
The survey reveals a surge in stock investments, with the highest overweight in stocks since before the Fed's rate hikes and a significant reduction in cash allocations to a two-year low.
Concurrently, there's a notable shift towards bonds, with the highest overweight in 15 years, and a bearish stance on commodities.
This shift is attributed to a "Goldilocks environment" expectation, with a balanced economy that is neither too hot nor too cold.
The Fed’s latest meeting has further fueled this optimism, suggesting a potential dovish approach with possible interest rate cuts, positively impacting the S&P 500 and Nasdaq 100.
The BofA survey also highlights a general belief that the Fed's rate hikes are over, with a record-high expectation for lower rates and bond yields.