TRG Fast Facts

By TRG Advisors on December 8, 2023

Weekly data-driven insights on the markets and economy

1. An AAPL a Day…

The S&P 500 slid 0.06% on Tuesday as the recent Wall Street rally lost steam. Following cooling data in the labor market, technology shares were boosted. Mega-caps Apple and Nvidia each rose more than 2%.[i] Notably, Apple’s market capitalization closed Tuesday at about $3 trillion – for the first time since August.[ii]

2. Holdin’ Steady

After the release of jobs data Tuesday, the 10-year Treasury fell below the 4.2% mark for the first time since early September. As of Wednesday, the 10-year and 2-year yields each increased by 1 bp, sitting at 4.17% and 4.59%, respectively.[iii] The market continues to watch the Fed, uncertain of further rate hikes.

3. Now Hiring (Some)

Jobs data released Tuesday indicated labor market cooling. Job openings totaled 8.73 million for the month, a decline of 617,000, or 6.6%, the lowest total since March 2021. This brought the ratio of openings to available workers down to 1.3 to 1.[iv] Private payrolls grew by 103,000 workers in November, below the downwardly revised 106,000 in October and the 128,000 Dow Jones estimate. Along with the modest job growth report, annual pay increased 5.6%, the smallest gain since September 2021.[v]

4. Too Much of a Good Thing

Oil prices fell by 4% Wednesday, as spare capacity puts downward pressure on crude markets. Despite efforts by OPEC+ to maintain a pricing floor through supply reductions, West Texas Intermediate and Brent crude oil were trading at about $73 and $78 per barrel on Tuesday, their lowest since July.[vi] Crude inventories fell by 4.6 million barrels, far exceeding the 1.4 million-barrel drop analysts had expected. OPEC+ has agreed on voluntary output cuts of about 2.2 million barrels per day for Q1 of 2024, and Saudi and Russian officials said the cuts could be extended beyond March.[vii]

5. The Quadrillion Dollar Question

The Supreme Court will hear arguments early this month on Moore v. United States, a case that could broadly reshape U.S. tax code and cost the government hundreds of billions of dollars in revenue. The case questions whether the government can tax certain types of “unrealized” gains, like stocks and bonds from which their owners haven’t directly recouped the value. A ruling in favor of the plaintiffs could cost the government $340 billion in revenue over the next decade. For comparison, that would cancel out all the extra revenue generated by the $80 billion IRS funding boost and then add $140 billion to the national deficit, which now stands between $26 and $33 trillion.[viii]

6. Entering the AI Ring

Elon Musk has filed with the SEC to raise up to $1 billion in equity for his artificial intelligence startup, X.AI. It has already brought in $135 million from four investors. Last month, Musk said investors in X (formerly Twitter) would own 25% of X.AI. Announced in July, this AI startup aims to “understand the true nature of the universe.” Its chatbot called Grok, released in October, will directly compete with ChatGPT and Bard.[ix]

7. Crypt-oh Yes!

Bitcoin builds on its upward momentum, topping $44,000 for the first time since April 2022 on Tuesday, rising more than 4%. Investors are optimistic of U.S. approval of a spot Bitcoin ETF. Tuesday’s optimism brought Bitcoin up more than 160% for the year. Ether was up 1.6% on the day and up 88% on the year. Broad consensus is that there will be a greenlit bitcoin ETF early in 2024, based on the SEC’s various deadlines to respond, which are determined by issuers’ application filing dates.[x]

8. Endless Eras

Taylor Swift beat out eight other finalists – including King Charles III and Barbie – to be named Time Magazine’s Person of the Year. Time awards this title to, “the individual, group or concept that has had the most influence on the world throughout the previous 12 months.” In 2023, Swift grabbed headlines multiple times between her Eras Tour, which boosted her to billionaire status and added an estimated $5 billion to the worldwide economy,[xi] and her relationship with NFL player Travis Kelce that boosted NFL ticket sales.[xii]

[i] Harring, Alex and Hakyung Kim, “Dow closes lower for a second day as late-2023 rally sputters: Live updates,” CNBC, December 5, 2023, https://www.cnbc.com/2023/12/04/stock-market-today-live-updates.html?__source=newsletter%7Cmsemea. Accessed December 6, 2023.

[ii] Leswing, Kif, “Apple’s market cap closes above $3 trillion,” CNBC, December 5, 2023, https://www.cnbc.com/2023/12/05/apples-market-cap-closes-above-3-trillion.html?__source=newsletter%7Cmsemea. Accessed December 6, 2023.

[iii] Kinderlin, Sophie, “10-year Treasury yield little changed after hitting lowest level since September,” CNBC, December 6, 2023, https://www.cnbc.com/2023/12/06/us-treasury-yields-investors-digest-economic-data.html. Accessed December 6, 2023.

[iv] Cox, Jeff, “Job openings slide to 8.7 million in October, well below estimate, to lowest level since March 2021,” CNBC, December 5, 2023, https://www.cnbc.com/2023/12/05/job-openings-slide-to-8point7-million-in-october-well-below-estimate.html. Accessed December 6, 2023.

[v] Cox, Jeff, “Private payrolls increased by 103,000 in November, below expectations, ADP says,” CNBC, December 6, 2023, https://www.cnbc.com/2023/12/06/private-payrolls-increased-by-103000-in-november-below-expectations-adp-says.html. Accessed December 6, 2023.

[vi] Ferre, Ines, “Energy stocks’ big challenge in 2024: Too much oil,” Yahoo!Finance, December 5, 2023, https://finance.yahoo.com/news/energy-stocks-big-challenge-in-2024-too-much-oil-171423515.html. Accessed December 6, 2023.

[vii] Somasekhar, Arathy, “Oil drops on demand worries after US gasoline inventories swell,” Reuters, December 6, 2023, https://www.reuters.com/business/energy/oil-prices-fall-china-concerns-scepticism-opec-cuts-2023-12-06/. Accessed December 6, 2023.

[viii] Burns, Tobias and Zach Schonfeld, “Supreme Court to consider ‘quadrillion-dollar question’ in major tax case,” The Hill, November 28, 2023, https://thehill.com/homenews/4323743-supreme-court-moore-tax-case/. Accessed December 6, 2023.

[ix] Field, Hayden, “Elon Musk’s AI startup — X.AI — files to raise $1 billion in fresh capital,” CNBC, December 5, 2023, https://www.cnbc.com/2023/12/05/elon-musks-ai-startup-xai-files-to-raise-1-billion-.html. Accessed December 6, 2023.

[x] Macheel, Tanaya, “Bitcoin tops $44,000 for the first time since April 2022 as ETF optimism grows,” CNBC, December 5, 2023, https://www.cnbc.com/2023/12/05/bitcoin-tops-43000-for-the-first-time-since-april-2022-as-etf-optimism-grows-.html. Accessed December 6, 2023.

[xi] O’Kane, Caitlin, “The Federal Reserve says Taylor Swift’s Eras Tour boosted the economy. One market research firm estimates she could add $5 billion,” CBS News, July 18, 2023, https://www.cbsnews.com/news/taylor-swift-eras-tour-boosted-economy-tourism-federal-reserve-how-much-money-made/. Accessed December 6, 2023.

[xii] Faguy, Ana, “Taylor Swift—Who Became A Billionaire—Caps Year As Time’s Person Of The Year,” Forbes, December 6, 2023, https://www.forbes.com/sites/anafaguy/2023/12/06/taylor-swift-named-time-magazines-person-of-the-year/?sh=2257112a1539. Accessed December 6, 2023.