Business & Markets Update

Well… It was another week in the green for US stocks, that makes 3 in a row. The rally seemed to be driven by optimism around the Federal Reserve lowering interest rates later this month (Dec 18th), but also notable outperformance from the technology sector, especially AI-related stocks. Overall positive sentiment in markets has been the theme these last handful of weeks. Call it post-election animal spirits / call it positive seasonality (i.e. stocks tend to do well back half of the 4th quarter historically) / call it whatever you want. People are upbeat about the economy, upbeat about deregulation, upbeat about tax reform expectations, upbeat about market-friendly appointments inside Trump’s cabinet, and anyone with an IRA or 401k has seen their account go up and to the right this year… by a lot. Almost sounds like too much positive sentiment in the near-term, as I read this out loud to myself?! Markets taking a breather in January would probably make sense after this run but what do I know.

Including % moves since Nov 1st across the S&P, Russell 2k, Dow Jones Industrial & Nasdaq Composite, to quantify recent strength:

Also including a Seasonality Chart here (for the S&P 500) to give an idea of those historically strong 4th quarters mentioned above, as seen in the 5-yr average % moves, Oct-Dec = Strong:

Trump Appointments: David Sacks (prominent tech investor and co-host of the ‘All In’ podcast) has been named to the position of ‘AI and Cryptocurrency Czar’ for the administration. Sacks is probably the most vocal Trump supporter in Silicon Valley, and previously worked with Elon Musk at PayPal, so this all (mostly) checks out. Perhaps a more important takeaway = Sack’s appointment highlights the shift in overall relationship between the government (come January) and big tech. With the influence of both Elon and Sacks (in a world traditionally owned by Democrats), AI and the crypto world as a whole can expect to see massive change in regulations and general landscape.

On a similar note, Paul Atkins was nominated as the new SEC (Securities and Exchange Commission) Chair on Dec 4th, yet another (big) signal of a crypto-friendly administration. If he’s confirmed, he would succeed Gary Gensler, best known (in crypto world at least) for his efforts to clamp down on the digital assets market as a whole. Bitcoin traded up & thru the closely watched 100k level for the first time last Thursday, see 12-month chart below to zoom-out and contextualize the move in recent weeks.

Top Reads

The biggest story out of NYC that you all already know about was the shooting/assassination of UnitedHealth CEO Brian Thompson. He was shot & killed @ 6:45am outside the midtown Hilton before UNH was set to host their annual investor day @ 8am. The shooting was targeted and a search for the shooter is still ongoing at the time of this writing…. Some relevant / interesting reads for you guys below:

Why Blackstone paid $8 billion for Jersey Mike’s (Link)

Jeff Bezos wants to be judged by how rich he’s made investors (Link)

SpaceX’s valuation has jumped ~$100 billion in about four weeks (Link)

Number of 401(k) ‘millionaires’ just jumped by 9.5% (Link)

Whole Foods is betting minimarket concept in select cities (Link)

Taylor Swifts ‘Eras Tour’ book sells a reported 814,000 copies in 2 days (Link)

Scott Galloway: AI, Netflix, and the Big Tech platforms are eating everything; A look at Media Consolidation (Link)

Visualizing America’s Average Retirement Savings, by Age (Link)

My Honest Advice to Someone Who Wants to Make A Lot of Money, from HPLT friend-of-the-program Sahil Bloom: (Link)

2 Quick Podcast Recommendations

Marc Rowan (CEO of Apollo Global Management) with a short 10min interview on ‘In Good Company’ with his views on: The difference between skill and talent, public vs private markets, what waking up with a ‘I get to do this’ attitude means to him in the professional sense, and more (Listen Here)

(Un)Common Sense on the Glue Guys Podcast: Shane Battier / Alex Smith / Ravi Gupta explore the power of Uncommon Sense and how seemingly obvious principles in our lives are often overlooked despite the power they hold. Ex-athletes who bring that competitive mentality into their career will love this one. (Listen Here)

3 Quick Reads Inside the Business of Health + Wellness

TPG explores $1.5 billion-plus sale of gym chain Crunch Fitness ( Link )

Social Fitness & Mental Health top Strava’s Annual Report ( Link )

The Pilates Boom is Going Global (Link)

-Catch you next week!! TC

From the Team @ HPLT 12/9