Stocks Fall to Start Week

Catch Up Quick

• Biden is considering retired 4 star Gen. Lloyd Austin for Defense Secretary

• Airbnb plans to target a range of around $30 to $33B, DoorDash $25 to $28B, in higher-than-expected IPO valuations

• Tony Hsieh, CEO of Zappos, passed away at age 46 after a house fire injury

• Thanksgiving Day consumer spending increased a staggering ~22% YoY

• Trump admits election challenges probably won’t make it to the Supreme Court

• OPEC+ members are weighing whether to extend oil cuts for up to 4 months

• Biden will likely require walking boot for several weeks after fracturing foot

• S&P Global agreed to buy IHS Markit in an all-stock deal valued at $44B

• Moderna will file for FDA emergency use authorization for its vaccine

• Consumers spent roughly $9B online on Black Friday

• Barron’s says Ford’s stock ($F) could double

Thought of the Day

• Many credibly figures in various niches of business and economics have noted China’s economic momentum over the past half century or so, driven by large-scale capital investment, rapid productivity growth, increased connectivity with the Western world, and robust manufacturing & exporting processes

• Just before the pandemic this year, in a conversation with U.S. Air Force Lt. Gen. John Thompson, Elon Musk stated “the Chinese economy is probably going to be at least twice as big as the United States economy, maybe three times”

• Given that since ~2005, on an aggregate basis, China’s GDP has grown ~550%, compared to that of the U.S. at ~60%, this claim doesn’t appear to be quite as far-fetched as other Musk assertions

• However, dissecting this growth through the lens of its second derivative, Chinese GDP grew 14.0% in 2007 while only 6.6% in 2018, as the International Monetary Fund projects it to fall to just 5.5% by 2024

• Additionally, China’s slowing growth could be greatly hindered by the global health crisis

• 16% of jobs in China can be fulfilled remotely, compared to 33%, 30% & 29% of jobs in U.K., Germany & the U.S. respectively

The Bottom Lines

• While it’s rise to a global superpower from a developing country has certainly been impressive, it will be interesting to monitor China's continued growth in a post-COVID world

• Since the peak of the pandemic, its economic recovery has been largely successful (based on coincident indicators)

• However, as most jobs reside within realms such as manufacturing, agriculture & retail, it's very possible the low share of remote-capable jobs could hurt it’s ability to compete on a global stage, especially if other nations adapt to a sustained telecommuting workforce, with no firewalls or internet barriers to limit technological scale