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MARKET
Stock market news today: Stocks close with gains for fourth straight week

- Market Overview: US stocks closed mixed on Friday following Thanksgiving, with the Dow Jones up 0.3%, S&P 500 flat, and Nasdaq down 0.1%. All three indices recorded gains for the fourth consecutive week, marking November as the best month for the Dow since October 2022 and for the Nasdaq and S&P 500 since July 2022.

- Retail Sector: Retailers outperformed as Black Friday kicked off the holiday shopping season. The S&P retail sector rose 0.6%, with companies like Home Depot and Best Buy gaining. Target and Walmart also closed higher despite warnings of cautious consumer spending.

- Tech and E-commerce: Amazon traded flat as it prepared for the first-ever NFL Black Friday game. Nvidia's stock fell nearly 2% after delaying the launch of an AI chip in China due to US export curbs. Crypto market saw a boost with Bitcoin rallying above $38,000, its highest level since May 2022, positively impacting Coinbase shares.

- Oil Prices: Discord within OPEC+ over output quotas, particularly between Saudi Arabia and African members, kept a lid on crude prices. Brent crude traded just above $81 per barrel, and WTI crude dipped about 1% to $76 per barrel.

- Tesla and Labor Issues: Tesla's stock rose 0.5% after CEO Elon Musk commented on a spreading strike in Sweden, initiated by postal workers refusing to deliver to Tesla offices. The strike follows the United Auto Workers union president's aim to target Tesla.

In summary, the markets closed mixed after Thanksgiving, with retail performing well amid Black Friday, tech stocks facing challenges, cryptocurrencies gaining, and OPEC+ discord impacting oil prices. Tesla dealt with labor issues in Sweden. Read Full

STOCKS
Here's why the Magnificent 7 tech stocks will continue to outperform the S&P 493 in 2024, according to Goldman Sachs

- Tech Stock Outperformance: The "Magnificent Seven" tech stocks, including Apple, Amazon, Alphabet, Meta, Microsoft, Tesla, and Nvidia, have significantly outperformed the broader stock market in 2023, contributing to 76% of the S&P 500's gain of nearly 20%.

- Goldman Sachs' Forecast: Goldman Sachs expects this trend to continue into 2024, with the mega-cap tech stocks continuing to outperform the rest of the S&P 500.

- Market Impact: The extreme concentration of the stock market rally in these tech stocks has led to concerns among bearish investors, but Goldman Sachs remains optimistic.

- Reasons for Optimism:

1. Better Fundamentals: The mega-cap tech stocks exhibit more attractive fundamentals compared to the bottom 493 stocks in the S&P 500, including faster growth, higher profit margins, cleaner balance sheets, and reasonable valuations on a relative basis.

2. Analyst Estimates: Analyst estimates project the Magnificent 7 to grow sales at a Compound Annual Growth Rate (CAGR) of 11% through 2025, significantly higher than the 3% growth projected for the rest of the S&P 500.

3. Valuations: Despite elevated price-to-earnings valuations for tech stocks, when factoring in growth, they are in line with the rest of the market. Long-term expected EPS growth for the Magnificent 7 is 8 percentage points faster than the median S&P 500 stock.

4. 2022 Performance: The sharp outperformance in 2023 follows a challenging 2022, where several tech stocks faced significant declines, making the current trend reversal seem ordinary to Goldman Sachs.

- Historical Analysis: Goldman Sachs notes that the 30 percentage point outperformance of the seven mega-cap tech stocks relative to the bottom 493 stocks in 2023 is the second-largest annual difference since 1970. However, historical analysis suggests no reliable relationship between trailing and forward returns for the top seven stocks relative to the rest of the S&P 500.

- Cautionary Note: The historical analysis highlights instances where strong outperformance in one year did not necessarily translate into similar performance in the following year, emphasizing the unpredictable nature of stock market trends.

In summary, Goldman Sachs anticipates continued outperformance of mega-cap tech stocks in 2024, citing improved fundamentals, historical performance trends, and a reversal of challenges faced in 2022. However, the note acknowledges the historical unpredictability of stock market trends.
Read Full

CRYPTO
Nine Chronicles M, On-Chain MMORPG Game, Launches On Mobil

Planetarium Labs, a web3 gaming company, has launched its open-world fantasy game, Nine Chronicles, on mobile platforms. The game, available on the Apple App Store and Google Play Store, enables players to explore diverse environments, engage in resource harvesting, craft materials, customize avatars, and trade in-game items for real money on the company's blockchain. Nine Chronicles features realistic in-game mechanics and economics mirroring real-world marketplaces.

The company's goal with the mobile release is to expand its user base and introduce blockchain-based decentralization to a wider audience. Pre-launch interest has been significant, with over 200,000 users signing up for rewards, bonuses, unique costumes, in-game items, sweepstakes, and exclusive event access.

In an effort to revitalize the blockchain gaming industry, often plagued by challenges and scams, Nine Chronicles M distinguishes itself as a fully on-chain and open-source web3 MMORPG. Led by an experienced team, the game allows users to customize and utilize game intellectual property. The release aims to attract millions of new mobile gamers through engaging gameplay, storytelling, and a well-crafted storyline.

Planetarium Labs' successful $32 million Series A funding round in 2022 and continued achievements underscore the company's execution capabilities. Nine Chronicles M incorporates a parallel chain called Heimdall to enhance processing capabilities. While the game's performance on gaming charts remains to be seen, supporters are optimistic, relying on its storytelling, design, mechanics, and user approval for future growth. ReadFull

BUSINESS
X May Lose Up to $75 Million in Revenue as More Advertisers Pull Out

- Financial Impact on X (formerly Twitter): The social media company, now owned by Elon Musk and known as X, could face a potential loss of up to $75 million in advertising revenue by the end of the year. This follows the endorsement of an antisemitic conspiracy theory by Elon Musk, prompting major brands to pause their marketing campaigns on the platform.

- Documented Advertising Lapses: Internal documents from X's sales team reveal concerns extending beyond IBM, Apple, and Disney, which already paused their advertising. Over 200 ad units from companies like Airbnb, Amazon, Coca-Cola, and Microsoft are listed, with many either halting or considering pausing their ads on the platform.

- Financial Risk: X initially stated that $11 million in revenue was at risk, but the documents indicate a potentially higher impact. The advertising freezes occur during the crucial holiday quarter, historically the company's strongest period.

- Background on Musk's Ownership: Elon Musk acquired X for $44 billion last year, leading to advertiser hesitancy due to concerns about Musk's behavior and content moderation decisions, resulting in a rise in incendiary and hateful content on the platform. U.S. advertising on X has declined nearly 60% in 2023.

- Response and Counteraction: X is actively trying to woo back advertisers and has launched ad campaigns during the holiday season to compensate for revenue shortfalls. However, the internal documents suggest that these efforts may not be yielding the desired results.

- Elon Musk's Comments: The advertising pause escalated after Musk's endorsement of an antisemitic conspiracy theory on X. Several major brands, ranging from political campaigns to tech giants, paused or reduced their ad campaigns in response.

- Legal Action and Defiance: X has taken legal action against left-wing media watchdog group Media Matters, blaming its report for the decline in ad sales. X's CEO, Linda Yaccarino, expressed defiance, stating that the platform supports free speech and criticized external pressures.

- Revenue Allocation: Musk announced that X would donate all revenue from advertising and subscriptions associated with the war in Gaza to hospitals in Israel and the Red Cross/Crescent in Gaza, including revenue from ads by charity groups and news organizations related to the conflict.

- Employee Meeting and Internal Communication: In an internal meeting with employees, Yaccarino did not mention Musk's endorsement of the antisemitic post and attributed the company's issues to the Media Matters report. Musk celebrated companies continuing to advertise on X and emphasized the platform's commitment to free speech.

In summary, X faces a significant financial impact due to advertising pauses following Elon Musk's controversial statements, with internal documents indicating a potentially higher revenue loss than initially stated by the company. The situation underscores challenges related to content moderation, advertiser confidence, and the platform's response to external scrutiny.Readfull

ECONOMIC
Argentina's economy chief frontrunner pitches Milei's 'shock' therapy to banks - sources

- Economic Plans for Argentina: Luis Caputo, a former central banker and front-runner for the position of the new economy minister, met with local and international bank officials to discuss the economic plans of Argentina's President-elect, Javier Milei.

- "Shock Therapy" Approach: Milei has pledged "shock therapy" for the struggling Argentine economy. Caputo, seen as a potential economy minister, emphasized the need for an abrupt economic adjustment to address issues such as high inflation (nearing 150%), a looming recession, capital controls, and negative net reserves.

- Orthodox Economic Team: Despite not confirming his appointment, signs suggest that Milei, considered a libertarian outsider, may lean towards a more orthodox economic team and policies. This has positively impacted markets, with bonds up almost 14% and equities over 40% since Milei's run-off election win.

- Caputo's Vision: Caputo, a former finance minister and central bank chief during ex-President Mauricio Macri's government, highlighted the importance of fiscal balance and a comprehensive, market-oriented approach to address economic challenges. He stressed the need for fiscal and monetary shock therapy from the outset.

- Meeting Details: The meeting took place at the La Rural conference center in Buenos Aires. Caputo did not confirm his role as the new economy minister during the meeting. The local ADEBA banking association confirmed the positive nature of the meeting, emphasizing Caputo's vision for fiscal balance.

- Economic Challenges: Argentina faces economic challenges such as high inflation, a looming recession, and capital controls. Milei's government is expected to take office on December 10, and there is anticipation of swift economic adjustments.

- Lifting Currency Controls: Caputo mentioned that Milei's government plans to lift currency controls rapidly, but not immediately. Dollarization is not planned in the short term, as fiscal and monetary stabilization is a priority.

- Inflation Control: Addressing inflation forcefully is a top priority for Milei's government, according to Caputo. However, specific details on how inflation would be tackled were not provided during the meeting.

- Milei's Campaign Promises: While Milei had campaigned on shutting the central bank and dollarizing the economy, practical implementation is expected to take time given the economic crisis. Milei recently stated that shutting the central bank is "non-negotiable."

- Caputo's Role: Caputo is seen as a key figure in gauging the position of banks before the new government takes office. His experience and knowledge of the market are considered valuable for assessing the economic landscape under Milei's administration. Readfull

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