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- š±Cat Tax: Jan. 19, Issue 11
š±Cat Tax: Jan. 19, Issue 11
Moo-rning, Legends! š®āØ
Like we predicted last issue, TikTokās clock is ticking away faster than chillguy falling out of relevancy(seriously, why does no one talk about him anymore?). šØ With a ban on the horizon, creators are scrambling to figure out their next act. Will the TikTok elite invade podcasts? Host live talent shows on Twitch? Or maybe start a global scavenger hunt for their lost audiences? šµļøāāļø
Whatever happens, weāve survived app shutdowns before (RIP Vine š), and weāll survive this one too. So letās shift gears, stay ahead of the trends, and own this week.ššŖ
Markets (USD) - Weekly
NASDAQ | 19,630.20 | +3.84% |
S&P 500 | 5,996.66 | +3.71% |
D-JIA | 43,487.83 | +3.73% |
2-Year Yield | 4.291% | -9.70bps |
10-Year Yield | 4.630% | -13.90bps |
Bitcoin | $104,411.10 | +10.57% |
NYSE: JNJ | $147.03 | +2.80% |
January 12
Yield Curve-ball: Why Rising Treasuries are Benching Stocks
Image source: Free Malaysia Today
After an overall very positive year for equities, buoyed by AI investments and hopes of tax cuts under Trump 2.0, bond markets, like your last situationship, are sending mixed signals.
Despite three Fed rate cuts in late 2024, the 10-year Treasury yield has surged by over a 1% in just four months, approaching the critical 5% threshold last seen briefly in 2023. A yield at this level, not consistently reached since before the Global Financial Crisis, signals higher borrowing costs, a weaker stock market, and potential economic uncertainty1. Investors appear to be bracing for higher inflation or long-term instability.
Adding to the caution, the S&P 500's earnings yield is now at its lowest compared to Treasury yields since 2002, making stocks appear increasingly overvalued and vulnerable to economic shocks2.
In short, while bulls are running, bond markets are urging caution. The 10-year yield may be the canary in the coal mine for 2025ās market dynamics.
January 16
From One Chinese App to Another, with Cat Tax
Image Source: Free Malaysia Today
The TikTok ban is tomorrow, just one stubborn day before Trump takes office. Sensing the imminent doom (unless Mr. Beast? š), millions are now finding refuge in Xiaohongshu (RedNote), a Chinese lifestyle app blending Instagram-like visuals with Reddit-esque community vibes. Now #1 on the U.S. app store charts, it has become an unexpected cultural hub for these āTikTok refugeesā.
āTikTok refugeesā refer to Americans who have swarmed the app with the hashtag #TikTokRefugee, which has surpassed 24 million posts, and plenty of cat pics to pay the ācat taxā to their new hosts. The cultural exchange doesnāt stop there, discussions range from parents swapping stories about raising kids to Swifties from both countries uniting over their shared fandom.
Chinese users have also embraced the newcomers. The search āWelcome the Global Villagersā garners millions of views daily, turning Xiaohongshu into a bridge between the East and West, rarely before seen due to the Chinese firewall.
Whether TikTok survives or not, this rare and wholesome internet win shall be remembered forever.
January 15
Banks Eating Good this Quarter
Image Source: Meg Furey, Medium
Q4 was a blockbuster quarter for U.S. banks, with JPMorgan leading the charge. The bank reported a 50% jump in net income to $14 billion, smashing Wall Street expectations. Wells Fargo, Goldman Sachs, and Citigroup also posted stellar results, wrapping up an overall banner year for the industry.
Whatās driving the surge?
Higher Interest Rates: Despite a late 2024 trimming, rates stayed elevated enough for banks to rake in significant interest income. JPMorgan alone brought in $23.5 billion in Q4.
Investment Banking Revival: A post-election boost3 in CEO confidence saw a surge in dealmaking, lifting investment banking fees by 49% at JPMorgan.
Strong Consumer Activity: JPMorganās consumer division flourished, with the addition of 2M new checking accounts.
Market Reaction
All in all, in 2024, JPMorgan, Wells Fargo, Goldman Sachs, and Citigroup gained 41%, 43%, 48%, and 40% respectively, outpacing the S&P 500ās 23% rise and Nasdaqās 28% climb.
January 13
Ghost Jobs are Haunting the Job Market
Image Source: Flickr
Turns out, those āweāll keep you in mind for future opportunitiesā emails might not have been your fault. Ghost jobsāfake job listings with no intention to hireāare creeping into the job market.
A GreenHouse survey found 20% of job postings on its platform are fake, and 60% of jobseekers suspect theyāve applied to one. Worse, a survey by Resume Builder revealed that 40% of hiring managers admitted to posting fake listings, with 70% claiming itās perfectly acceptable.
Why do they do it? To create a āperception of growthā, boost morale, and build up a talent pool in case they land a big contract. At least this gives me closure on my internship rejectionsāthey were ALL ghost jobs, too.
January 14
J&Jās Billion-Dollar Brain Boost
Image source: Wikimedia Commons
Intra-Cellular Therapies just got a shot on the arm as Johnson & Johnson, the pharmaceutical heavyweight, seeks to close on its acquisition. As biotechās biggest deal of the year, J&J proposed a hefty $14.6 billion purchase price, with a cool $132 per shareā39% above Intra-Cellularās last closing price.
Known for its mental health and neurological treatments, Intra-Cellular is a hot commodity thanks to Caplyta, its bipolar depression drug that pulled in $675 million last year and is projected to hit $5 billion in annual revenue. The deal also sets J&J up with a late-stage trial drug for major depressive disorder, keeping its neuroscience portfolio strong.
This follows J&Jās prescription for growth after its $13.1 billion acquisition of Shockwave Medical and the spin-off of its consumer health arm. With healthcare dealmaking rebounding after 2024ās slump, J&J is flexing its $342 billion market cap muscle, funding the Intra-Cellular buyout with cash and debt.
Israel and Hamas reached a ceasefire and hostage deal, with the first phase set to begin on the 19th of January.
Jeff Bezosā Blue Origin launched its massive New Glenn rocket, hitting orbit but missing the booster landing. Looks like Bezos' towering project still needs a smoother finish.
Even top MBAs canāt find jobs, as 20% of grads from business schools such as Harvard, Stanford, and MIT were without a job 3 months following graduation.
South Koreaās presidential saga came to an end on the 14th, as police arrived at the pres. residence with ladders and wire-cutters before arresting Yoon Suk Yeol.
Professional hater Hindenburg Research shut down, the short-selling firm that reduced market value of firms such as Nikola and the Adani group by more than $100 billion closed on the 15th.
āSignals higher borrowing costs,ā¦, economic uncertaintyā: Rising bond yields signal higher borrowing costs because they increase the interest rates that borrowers, including businesses; governments, and individuals, must pay to issue new bonds or take loans, as lenders demand higher returns to compensate for greater perceived risks.
āThe S&Pā¦making stocks appear increasingly overvaluedā: The S&P 500's earnings yield shows how much profit stocks generate relative to their price. When Treasury yields (safe investments) rise and stock earnings yields stay low, bonds look more attractive. This makes stocks seem overpriced and riskier, especially if the economy hits trouble.
āA post-election boomā: After Trumpās election, CEOs grew optimistic about the incoming administrationās promises of deregulation and pro-business policies. This optimism fueled a wave of corporate dealmaking, like M&A, which require banksā investment banking services.
āSleepy Joeā by Tom Stiglich, courtesy of www.creators.com
**Cartoon does not reflect the opinions of the TWC crew, we just thought it was funny
~Newsletter friendies we think are equally cool~
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DISCLAIMER: This newsletter is for educational purposes only, and is not intended as financial advice, investment guidance, or a solicitation to buy or sell any assets. While we strive for accuracy, we cannot guarantee all information is error-free. Always exercise caution and conduct your own research before making financial decisions.