Marketbites: Massive Drop In Twitter Revenue
Portfolio Manager Commentary:
Stocks rallied to end the week Friday, but finished the week lower snapping a four-week win streak on rising rate fears. The October jobs report was released and investors drew conflicting opinions about what the numbers mean for future Fed hikes, more on that below. Shares of U.S.-listed Chinese stocks had a good day Friday due to hopes of easing Covid restrictions in China, even though the government has not formally announced a pivot. JD.Com, Alibaba, and Pinduoduo shares surged as a result.
Elon Musk announced Twitter has suffered a “massive drop in revenue” due to advertisers pausing their spending on the platform. Even though there have been no changes with content moderation, activist investors have put a lot of pressure on advertisers to pull their content. General Motors, Pfizer, and Audi are among a few of the companies that have already pulled their ads. Musk has not made changes to content moderation, but he has made changes in other areas including Twitter’s workforce. Since he took over the company on Oct. 28, approximately 50% of employees have been fired or laid off.
Chart of the Day:
October's jobs report came out Friday and shows that U.S. employers added 261,000 jobs during the month, surpassing Dow estimates of 205,000. The job growth primarily came from strong gains in manufacturing, health care, and professional and business services sectors. “The manufacturing gain of 32,000 suggest the economy is far from slowing in a meaningful way,” TradeStation Group’s David Russell wrote in a Friday note. Even though jobs were added, there was still an increase in the unemployment rate to 3.7%, slightly above the expected 3.5%. Due to this, investors viewed the jobs report as a mixed picture.