Like the Energizer Bunny, U.S. companies kept going, and going, with their hiring in December. This is now sparking doubts on how quickly and deeply the Fed could start cutting interest rates, as was being priced in quite aggressively in the markets towards the end of 2023. According to ADP data, payrolls increased 164,000 last month, the most since August, while weekly jobless claims rose by 202,000, falling short of expectations. There continues to be not too much in the data to suggest or prompt the Fed to rapidly look to lower rates. 10 Yr Treasuries extended declines with the yield rising to 3.99%.
Apple continues to lose market share on the new year, with the stock down over -1.5% in the early trading. Continued concerns over iPhone sales appear to have triggered a second downgrade this week as Piper Sandler’s Harsh Jumar cut his rating on Thursday citing, as we saw earlier on the week, China’s macro concerns are in line to dampen iPhone demand. Interestingly enough, Apple was the only big tech firm to see revenue #’s contract for the past 4 quarters.
Bloomberg notes that China’s local government financing vehicles, the companies that borrow on behalf of provinces and cities to finance infrastructure projects, need to repay a record ~$651 billion of bonds over the next 12 months.
JP Morgan out with a dour note on household and consumer health, suggesting a rough start to the year for U.S. households. Their research also highlights a rise in consumer loan delinquencies and Chapter 11 bankruptcy filings.
Microsoft is adding an AI key to its new keyboards, the first change to PC keyboards in decades. The button is to activate its AI Copilot service which will sit to the right of the space bar. This shortcut is intended to help users create images, write emails, and summarize text with the assistance of AI. We shall see how this change translates to a boost in sales as users may look to upgrade devices.
Peloton is launching a partnership with TikTok that will create a fitness hub on the popular video app with the attempt to tap into a new universe of customers. Peloton stock is up on the news, over +8% in the early trading. This is the first time that Peloton will attempt to produce a customized social content product for a partner outside of its own network…. Let’s just hope some of those dangerous TikTok trends don’t translate to the bike.