Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 4,768.37 ( ⬆️ 0.59%)

Nasdaq Composite @ 15,003.22 ( ⬆️ 0.22%)

Bitcoin @ $42,921.26 ( ⬇️ 0.36%)

Hey Scoopers,

Happy Wednesday. Ready to tackle the midweek hustle?

Here’s what’s on the menu for today:

👉 Online holiday shopping exceeds pandemic highs

👉 S&P 500 nears all-time high

👉 Bitcoin’s weekly outflows

So, let’s go 🚀

Online Discounts Are a Steal

Online shopping is making a comeback this holiday season, according to the CNBC All-America Economic Survey.

The survey found 57% of Americans have named online shopping as the top destination for Christmas gifts, up from 51% in 2022 and 55% in 2020. Comparatively, online shopping accounted for just 18% of responses in 2006.

While the reason for this uptick is not yet clear, consumers may be turning to online platforms to hunt for bargains amid elevated inflation and a sluggish macro economy.

Amazon is the go-to destination

Amazon, the largest e-commerce platform globally, is expectedly the primary destination for online shoppers.

The number of people who stated Amazon as their favored choice for online shopping has increased from 35% in 2017 to 74% in 2023.

The other competitor is big-box retailer Walmart, which has recently gained traction among online shopping platforms.

Around 16% of shoppers chose Walmart as their #1 online marketplace, up from 12% in 2022 and 4% in 2017. This number of Etsy has also risen from 8% to 14% in the last six years.

Further, most Americans will likely use debt to pay for gifts this year, while 31% say they will carry a balance from holiday spending. Around 10% claimed they will use “buy-now-pay-later” plans.

Our take

Given the optimism surrounding online shopping platforms this holiday season, companies operating in the e-commerce space, such as Amazon, Shopify, and Etsy, should deliver better-than-expected numbers in Q4 of 2023.

The holiday season remains crucial for digital platforms, given the slowdown in consumer spending levels in the last year.

S&P 500 Inches Closer to Record High

The equity market has been on an absolute tear this year, with stocks rallying in recent months on the possibility of three interest rate cuts in 2024.

As interest rates are lowered, the cost of debt for companies becomes cheaper, resulting in higher profit margins and earnings growth.

Additionally, signs of cooling inflation and a pullback in Treasury yields have helped risk assets deliver outsized gains in 2023.

In 2023,

👉 The S&P 500 index has gained 24.7%

👉 The Nasdaq Composite index has gained 44.4%

👉 The Dow Jones index has gained 13.3%

Another Supply Chain Disruption?

Ocean carriers are rerouting vessels due to more than a dozen Houthi attacks in the Red Sea since the start of the Israel-Hamas war in October.

Until now, around $30 billion worth of cargo has been diverted away from the Red Sea as they face a threat from the Houthi militants based in Yemen.

The U.S. Defense Secretary has announced the formation of an international task force to address the issue.

These attacks may likely result in supply chain disruptions globally and drive inflation higher in the near term.

Bitcoin Outflows Totaled $33 Million Last Week

After 11 consecutive weeks of inflows, digital asset investment products saw outflows totaling $16 million, according to data from Coinshares.

However, trading activity remained above the 2023 average at $3.6 billion in the last week.

These mixed regional flows indicate investors are booking profits after a stellar run in Bitcoin prices, which has surged over 150% in 2023.

Outlflows from Bitcoin and Ethereum totaled $37 million, offset by inflows of $21 million in altcoins such as Cardano, Solana, and XRP.

Headlines You Can’t Miss!

Shipping giant Maersk to begin rerouting of cargo

Tesla drivers top accident rates in the last 12 months

Consumers are shopping earlier to save more on Christmas

UK inflation drops to a two-year low

Bitcoin is the most significant Wall Street development in 30 years, says Michael Saylor

Chart of the Day

Rising inflation in the last two years forced global federal banks to raise interest rates multiple times since the start of 2022.

Interest rates in developed markets such as the U.S., the EU, and the UK have climbed by at least four percentage points in the last 20 months.

Comparatively, Japan has held interest rates at 0% or a tad lower since 2016, even as inflation continues to gain pace this year.

While the inflation outlook remains uncertain, the IMF or International Monetary Fund expects advanced economies to ease interest rates in the second half of 2024 gradually.

Japan’s economy has struggled in recent decades due to weak consumer demand. So, raising interest rates will make recovery tougher for Asia’s second-largest economy.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.