Trump Bump: election victory Ignites Trading Boom for Banks and Brokers

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·??????? ?Trump Bump: election victory Ignites Trading Boom for Banks and Brokers

·???????? UK Economy starts New Year’s diet early: shrinks for second month straight

·???????? Google and Samsung's shared vision: teaming up to take a byte out of Apple and Meta

·???????? Adobe’s quarterly earnings release went down badly with the stock market.?

·???????? ITV Tunes in to YouTube

Trump Bump: election victory Ignites Trading Boom for Banks and Brokers

?The FT have reported that since Donald Trump’s election victory the US stock market has seen a significant surge in trading activity in recent months. A key catalyst is the November election, which has led to increased optimism among investors. The expectation of a more business-friendly approach from the incoming administration has spurred buying activity across various sectors.

This increased trading activity has benefited a wide range of market participants, from retail investors to institutional firms. Brokerages like Interactive Brokers and Robinhood have seen a surge in retail trading volumes, while major investment banks such as JPMorgan Chase and Citigroup have benefited from increased trading revenue.

The Federal Reserve's expected interest rate cuts and a potential shift towards a less stringent regulatory environment are also contributing to the positive market sentiment. These factors are likely to further fuel trading activity in the coming months.

While the recent surge in trading activity may be partly attributed to the election and subsequent market expectations, it is also worth noting that the broader market environment has been conducive to investor enthusiasm. Strong corporate earnings, low interest rates, and a recovery in global economic growth have all played a role in driving the rally.

However, it is important to remember that market sentiment can shift rapidly, and investors should approach the current environment with caution. While the outlook for the US stock market appears positive in the near term, there are still uncertainties that could impact market performance.

US markets would have been the main beneficiaries highlighting the important of being open-minded to overseas stock markets. Something that we at Fundamental have always supported.

UK Economy starts New Year’s diet early: shrinks for second month straight

The UK economy contracted by 0.1% in October, marking the second consecutive month of decline. This unexpected contraction has raised concerns about the health of the economy, particularly given the government's recent economic policies and the impact of rising interest rates. ?

The decline in economic activity was attributed to a slowdown in various sectors, including pubs, restaurants, and retail. Businesses and consumers are believed to have held back spending due to uncertainty surrounding the government's fiscal policies. ?

However, it's important to note that the October figures are preliminary and may be subject to revision. Some economists have cautioned against drawing definitive conclusions based on this initial data.

Despite the recent contraction, the UK economy has shown resilience in recent years. The government has outlined plans to boost long-term economic growth, including investments in infrastructure and skills development. However, the success of these policies will depend on various factors, including global economic conditions and geopolitical developments

Google and Samsung's shared vision: teaming up to take a byte out of Apple and Meta

Google (whose parent company Alphabet is a constituent of our Fundamental Global Growth Portfolio) and Samsung are teaming up to create a new generation of smart glasses and virtual reality headsets powered by a customized version of Android. This collaboration aims to challenge the dominance of Apple's Vision Pro and Meta's Ray-Ban smart glasses.

The new Android XR system will enable devices to understand user intent and interact with the real world, thanks to advancements in AI. The upcoming Samsung headset, codenamed Project Moohan, is expected to offer a similar user experience to the Vision Pro but at a significantly lower price point.

This partnership marks a significant step for Google, which previously struggled with its Google Glass project due to technical limitations and privacy concerns. The company is hoping that the latest advancements in AI, coupled with the broader adoption of smart glasses and VR headsets, will allow it to successfully enter the market this time around.

By collaborating with Samsung, Google aims to leverage the latter's expertise in hardware manufacturing and distribution to bring its Android XR platform to a wider audience. This move could potentially reshape the future of wearable technology and pave the way for a new era of augmented reality and virtual reality experiences.

Adobe’s quarterly earnings release went down badly with the stock market.?

First the good news….

Fourth-quarter adjusted earnings of $4.81 a share were ahead of Wall Street estimates of $4.67 a share and revenue for the quarter of $5.61 billion also beat expectations of $5.54 billion.

In the same period last year, Adobe (a constituent of our Fundamental Global Growth Portfolio) reported earnings of $4.27 a share on revenue of $5.05 billion.

Digital media—the company’s largest segment—generated revenue of $4.2 billion in the quarter, an increase of 12% from the previous year.

“The engine of innovation at this company is moving at a velocity that we haven’t seen,” Chief Financial Officer Dan Durn said in an interview with Barron’s. “When we think about the ubiquity of the Adobe ecosystem, our demonstrated ability to catalyse some of the most meaningful trends that have shaped the digital economy, I can’t think of a better time to be at Adobe.”

“We’re literally one year into the monetization journey and it’s making a meaningful impact in the company,” Durn said. “If that monetization wasn’t there, you’d notice it in the financials.”

When asked where the AI monetization impact can be seen, Durn pointed to monthly active user growth. Monthly active users grew 25% year-over-year to about 650 million in the quarter.

Adobe’s shares have underperformed its peers this year. Investor concerns over competition and the timeliness of when gen-AI will have a meaningful positive impact on the top-line have hit the stock. The outlook was also disappointing with first-quarter revenue now expected to be between $5.63 billion and $5.68 billion, below consensus of $5.72 billion.

The company also said it expects fiscal 2025 revenue to be between $23.3 billion and $23.6 billion, which is below estimates of $23.8 billion.

The shares fell 14% on the news and are now 10% down this year compared with the 33% increase of the tech-heavy Nasdaq Composite. The stock’s decline is also in stark contrast to the jump in peer software stocks this year. The iShares Expanded Tech-Software Sector ETF has surged about 33% in 2024.

While the market’s initial fears about AI disruption have subsided, Adobe’s continued lack of AI monetization makes it increasingly difficult to pick them as a clear AI winner,” Third Bridge analyst Charlie Miner wrote after earnings on Wednesday.

ITV Tunes in to YouTube

ITV (a constituent of our Fundamental UK Dividend Income Portfolio), the UK's largest commercial broadcaster, is expanding its reach by making hundreds of hours of its programming available on YouTube. This move signals a significant shift away from traditional television viewing and towards digital platforms. ?

While ITV has previously uploaded clips and promos to YouTube, this new partnership will see full episodes of popular shows like "I'm A Celebrity" and "The Masked Singer" featured on the platform. Separate channels will be dedicated to news, sports, and daytime programming, further enhancing viewer accessibility. ?

This strategic move aligns with the evolving viewing habits of audiences, who are increasingly turning to online platforms like YouTube and social media for entertainment. By embracing YouTube, ITV aims to capitalize on this shift and reach new audiences while also generating additional revenue streams through targeted advertising. ?

This move follows a similar strategy adopted by Channel 4, which has also seen a significant increase in views on YouTube. Both broadcasters are recognizing the importance of digital platforms in reaching younger audiences and maximizing the reach of their content.

While ITV's traditional TV business is still a significant revenue driver, the company is actively diversifying its revenue streams and exploring new avenues for growth. The partnership with YouTube represents a key step in this direction, allowing ITV to adapt to the changing media landscape and ensure its content remains accessible and engaging for audiences across all platforms.

ITV is currently paying a dividend yield of around 6.7%.

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