🔬 Credit Cards Are Dangerous, OPEC Is Evil, and Much More

"History may not repeat, but it does rhyme"
- Ken Fisher

"Investing without research is like playing stud poker and never looking at the cards"
- Peter Lynch

Market Chatter

• Bla end to a bla week with the main indices closing flat (S&P 500 +0.06%, Nasdaq -0.11%).

• However, both Nasdaq and S&P 500 finished up for the fourth week in a row.

• 9 of 11 sectors closed in positive territory, but the weak spot was Tech (-0.3%) and tech heavy Communication Services (-0.7).

• Treasuries under pressure across the curve. Dollar was little changed vs. Yen but weaker vs. Euro and the Pound. Gold settled up 0.6% and oil down 1.4% after it appeared OPEC is close to an agreement to cut production (those bas$&#ds).

• November flash Manufacturing PMI missed, falling into contraction territory below 50, though flash Services PMI beat with first expansion in new business for four months.

Hot Headlines

PURCHASING MANAGER INDEX REMAINS STABLE - The U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, remained stable at 50.7 in November, indicating ongoing expansion in the private sector, with a slight increase in services activity balancing a contraction in manufacturing. Economists anticipate a significant slowdown in overall economic activity this quarter. (Reuters has more on this)

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AI ISN’T ESG FRIENDLY - ESG fund managers are increasingly worried about the risks associated with big tech companies' experimentation with AI, fearing potential market impacts from incidents like AI systems going rogue. Major tech firms like Apple, Microsoft, Amazon, and Nvidia - heavily invested in by ESG funds - are at the center of these concerns, with calls for greater oversight and safeguards against AI misuse and bias, such as reinforcing discrimination. This anxiety is echoed by major investors like the New York City Employees’ Retirement System and Norway’s sovereign wealth fund, who are actively monitoring AI's societal and governance risks, while pushing for transparency and responsible AI development. (Bloomberg has more)

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U.S. CREDIT CARD TRENDS - U.S. consumers are increasingly using credit cards, with loans growing more than usual for the holiday season, suggesting strong retail spending but raising concerns about sustainability and debt repayment. Delinquency rates are rising, and many banks are tightening credit standards, with lower-income consumers nearing their credit limits, indicating potential financial strain. Despite this, the overall impact might be limited to certain consumer groups, but investors should be cautious, as the broader consumer credit situation could still worsen, affecting consumer-finance stocks. (WSJ has details)

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ZERO-DAY OPTIONS - Nasdaq has introduced new "zero-day" options contracts for assets like gold, oil, and Treasuries, following their popularity in U.S. stock indices during the pandemic. These contracts, which allow trading on the day of expiry, are seen as a tool for managing exposure to short-term market events. The trend is expanding in Europe as well, with Eurex launching similar options for European indices, indicating a growing acceptance of these short-dated trading instruments in global markets. More ways to gamble. I mean ‘invest’. (more from the FT)

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EXPERIENCE-FOCUSED BUSINESSES REMAIN STRONG - Despite dwindling savings and economic headwinds, a group of U.S. consumers, dubbed 'YOLO spenders', are living it up as travel and events, like concerts, continue to show strong growth, seemingly unfazed by the financial hangover that might follow. This 'shop now, budget later' attitude is giving a boost to experience-focused businesses, while traditional retailers face the music with declining sales - proving that experiences are the new bling. (Bloomberg talks more YOLO)

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OPEC+ MEMBERS NEAR DEAL ON PRODUCTION CUTS - OPEC+ is close to resolving a dispute regarding output quotas for Angola and Nigeria, which caused a postponement of their policy meeting. The issue stems from reduced 2024 production targets assigned to these African members. The resolution of this dispute will allow OPEC+ to concentrate on addressing potential oil supply cuts in response to decreasing demand and falling prices. That’s technical speak for market manipulation. Damn OPEC! (Bloomberg has more on this)

(Reuters) US Black Friday sales rise 2.5% according to Mastercard Spendingpulse data.

(CNBC) While ecommerce on Black Friday hit a record $9.8 billion in U.S. online sales, up 7.5% from last year.

(WSJ) Humanity’s Future or an Unwelcome Interloper: SpaceX’s Starbase Transforms a Corner of Texas.

(Reuters) X may lose up to $75 mln by year-end on advertiser exodus. Sad we’re at the point where the best thing X can do is block Elon’s account.

(Bloomberg) China’s remote deserts are hiding a green energy revolution.

(Axios) How the ballooning subscription economy reduces consumer choice. Good points but sounds like someone is just mad they have to pay for their own Netflix account now.

Joke Of The Day

A man’s home is his castle…In a manor of speaking.

An armed man ran into a real estate agency and shouted…“Nobody move!”

Trivia

Today’s trivia questions are on Thanksgiving…

1. Which state produces the most turkeys?
   A) Iowa

   B) Minnesota

   C) North Carolina

   D) Arkansas

2. Approximately how many turkeys are consumed in the U.S. each Thanksgiving?
   A) 12 million

   B) 46 million

   C) 68 million

   D) 81 million

3. What was the original purpose of the first Thanksgiving?

   A) A feast

   B) A religious observance

   C) A harvest festival

   D) A peace treaty celebration

(answers at bottom)

Market Update

Trivia Answers

1. B) Minnesota produces the most turkeys.

2. B) Around 46 million Turkeys are consumed each Thanks Giving.

3. C) Thanks Giving started as a harvest festival

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