A daily market update from FS Insight — what you need to know ahead of opening bell

“Our liberty depends on the freedom of the press, and that cannot be limited without being lost.” — Thomas Jefferson

Overnight

American Airlines up and running again after technical issue grounded all U.S. flights AP

Biggest banks planning to sue the Federal Reserve over annual stress tests CNBC

Brazil shuts BYD factory site over ‘slavery’ conditions BBC

National Security Committee Punts Decision on U.S. Steel Acquisition to Biden NYT

Defaults on leveraged loans soar to highest in 4 years FT

Most Americans did their holiday shopping in store this year QZ

Private equity investors trapped in China as top firms fail to find exit deals FT

Arm v. Qualcomm: A trial ends — now the fallout begins MW

Japan antitrust watchdog expected to find Google operates illegal monopoly over search: Report SEM

OCC Orders BofA to Fix System for Fighting Money Laundering BAR

Nordstrom Family Strikes Deal to Take Namesake Chain Private BBG

Australian towns evacuated ahead of Christmas as fires rage BBC

Bill Clinton is hospitalized with a fever but in good spirits, spokesperson says NPR

Spacecraft attempts closest ever approach to Sun BBC

Chart of the Day

MORNING INSIGHT

Good morning!

Though some are cautious after > 20% gains in back to-back years, we believe this should not be viewed in isolation, and we should also look at the year preceding that – or 2022.

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TECHNICAL

• SPX has made a short-term low, but the breadth deterioration remains problematic.
• Industrials looks attractive heading given the sharp pullback to trendline support.
• Both Consumer Staples and Energy are Underweights heading into next year .

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CRYPTO

The stopgap funding bill passed by Congress last Friday has implications for the crypto market, and so does yesterday’s altcoin price action.

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First News

The pressures facing news organizations and journalism as a profession are themselves hardly newsworthy – they are neither new nor unknown. In 2024, we saw this trend continue, and yet we saw some green shoots that portend positive developments in the resilience of this industry. 

This year clearly showed that the influence wielded by traditional news media throughout the 20th century has eroded – or at least has come to be shared by new communication platforms. Throughout the election season and across demographics, podcasts proved to be significant shapers of public opinion. In the U.S. and around the world, a growing number of adults report that social media platforms are their primary source for news, and not just the social media channels of traditional news outlets, either. 

All of this served as a backdrop for the increasingly difficult road to profitability for those in the news business. Longstanding media outlets have struggled financially in recent years, as ad revenues diverted to new platforms and technologies. Billionaire business icons acquired some of them, hoping to reverse the trend. They do not seem to be faring any better, though. 

The transactions continue as new players hope to succeed where others have failed: a digital startup, Tortoise Media, recently signed a deal to buy the Observer, a Sunday weekly, from the owners of the venerable Guardian, while Comcast (CMCA) in late November announced it would divest itself of its MSNBC and CNBC cable news outlets (along with other cable channels like USA Network, Oxygen, E!, SYFY, and the Golf Channel.

As with many other industries, advances in artificial intelligence have many worried that they could ultimately lead to the destruction of journalism as a force for the public good. Such worries arguably accelerated after it was alleged in late 2023 that a significant percentage of articles on the Sports Illustrated site were AI-generated – and, on closer examination, largely nonsensical. 

Yet AI might help a particularly ailing segment of the news media – local news outlets – survive. Many observers argue that local news outlets help reduce polarization, expose corruption, and improve transparency in local governments, thus improving quality of life at the local level. Yet such companies have folded at an alarming rate in recent years – 127 local newspapers shuttered in the first 10 months of 2024 alone, with small markets and accompanying low ad revenues making it increasingly difficult for them to stay afloat (nevermind make a profit.) 

Yet some are experimenting with AI to help small news operations do more with leaner staff – to more quickly write up local sports stories and thus expand local sports coverage, or to more effectively keep track of what is discussed and decided at local council meetings, for example. News outlets big and small are also using AI to engage with the public on social media, to keep abreast of trends, and to quickly and inexpensively generate useful, eye-catching visuals to complement their news stories. 

Meanwhile, 2024 also seems to have seen the revival of the e-mailed newsletter, providing yet another way to keep the public informed about key issues of the day. Established reporters began venturing in this direction years ago, with notable names such as cybersecurity reporter Brian Krebs (2009) and former CBS anchor Dan Rather (2021) among those breaking new ground. This year, they were joined by names like Casey Newton (formerly of the Verge), Taylor Lorenz (who had previously worked at Business Insider, the Washington Post, and The New York Times), and Catherine Herridge (formerly of Fox News and CBS News). 

In earlier incarnations, newsletters were much maligned as empty marketing filler. However, the latest ones are looking to fill the gaps caused by the shifting media landscape, explicitly and sincerely aiming to provide high-quality information and useful, insightful analyses.

You just finished reading one of them.  

[First to Market will return on Friday, December 27, 2024. We wish all our readers a happy, healthy, and joyous holiday season.]