⚠️ Rising Inflation Threatens Market Optimism Over Anticipated Fed Rate Cuts

Hello!

Welcome to your daily technology newsletter this January 11, 2024. Here are today's key highlights to keep you ahead of the curve:

• Fintech Collaboration - Checkin.com partnership driving stock surge.

• Reuters' Big Win - Major acquisition of Pagero.

• Market Volatility - US markets react to inflation and crypto dynamics.

• Inflation's Impact - How it's reshaping rate cut expectations.

• Economic Forecast - World Bank's view on global slowdown.

• Crypto Momentum - The potential ripple effect of a Bitcoin ETF.

• App Economy - Insights into 2023's spending trends.

• Netflix's New Tier - The growth and impact of the ad-supported model.

• Crypto Investment Trends - Analyzing the drop in startup funding.

• OpenAI's New Venture - A closer look at the GPT Store and its implications.

Let’s dive in!

TOGETHER WITH*

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NORDIC UNIVERSE

The Stockholm stock market closed in the red for the third trading day in a row. It was affected by higher-than-expected U.S. inflation data and a sour stock opening in New York. The OMXS30 fell 0.3% to 2,336, with stocks trading worth approximately SEK 16 billion. The winners include Nibe and Coinshares while the losers include SBB, Sinch, and Tele2.

Fintech Giant Partners with Checkin.com for User Identification - Shares Surge by 17%

A high-profile fintech company, likely Klarna, is now utilizing Checkin.com's software, marking the deal as revenue-generating. The customer handles around half of all online purchases in Sweden and has a significant presence in Europe and the U.S, boasting 150 million consumers and 500,000 retail partners globally. This partnership allows the software to identify end-users, promising potential for future growth. The news sparked a stock price surge, with shares shooting up 17%.

Find a deeper analysis of this here.

Thomson Reuters Surpasses Vertex with Striking $680M Bid for Pagero

Thomson Reuters has entered a bidding war for business network company Pagero, offering SEK 40 per share, valuing the firm at about SEK 6.4 billion. The bid is SEK 4 higher than Vertex's offer last month, an 11.1% premium. Thomson Reuters' offer is contingent on them owning more than 90% of Pagero, with the offer acceptance period starting on the 12th of January and ending around February 9th. Pagero's independent bid committee unanimously recommends shareholders accept the offer.

Find a deeper analysis of this here.

US MARKETS

U.S. stock exchanges dipped at the start of trading due to higher than expected CPI inflation. The rising price of oil saw a surge for oil companies like Chevron and Exxon Mobil. Meanwhile, Citigroup warned of a potential loss in Q4 due to a weakened peso and higher-than-expected restructuring costs. On the other hand, software firm Salesforce saw an increase after an upgrade by Baird citing strong margins and favorable valuation. Stocks related to cryptocurrencies also experienced a boost after the SEC approved spot-ETFs focused on Bitcoin.

ECONOMICS & MACRO

Rising Inflation Threatens Market Optimism Over Anticipated Fed Rate Cuts

Elevated inflation in December may challenge expectations of major Federal Reserve interest rate cuts this year. The consumer price index is estimated to have risen by 0.2% in 2023's final month, a 3.2% increase for the year. The Federal Reserve had previously indicated three quarter-percentage point rate cuts by 2024, conflicting with market hopes for significant easing. If inflation does not show significant progress, potential volatility might be imminent, amidst an already turbulent year for stock markets.

World Bank Forecasts Third Consecutive Year of Global Economic Slowdown

The World Bank forecasts global economic growth of just 2.4% in 2024, marking a third consecutive year of slowdown due to ongoing global issues such as high interest rates, inflation, and conflicts. The US will also see slowed growth, dropping to 1.6% from 2.5% in 2023. Nonetheless, the US economy's resilience boosts other nations, with effective inflation management potentially driving the global inflation rate down to 3.7% in 2024.

TECH

Spot Bitcoin ETF Approval Sparks Mainstream Crypto Adoption Hopes

Regulators have approved the launch of 11 spot bitcoin exchange-traded funds, providing everyday investors with exposure to the world's largest cryptocurrency. Set to begin trading on Thursday, these ETFs could integrate bitcoin into 401(k)s, IRAs, and pension plans, mainstreaming it. The approval comes after the U.S. Securities and Exchange Commission survived a fake announcement scare. SEC chair Gary Gensler urged caution, warning about risks associated with bitcoin. Top names on Wall Street such as BlackRock and Franklin Templeton are included in the approved list.

App economy rebounds, hitting $171B consumer spend in 2023.

In 2023, the app economy improved, achieving $171B in consumer spend, primarily on non-game apps like TikTok, amidst stagnant downloads.

• Consumer spending on apps rose 3%

• GenAI app market grew 7x

• TikTok surpassed $10B in lifetime expenditure

• Top app by spending and installs: TikTok

• 1,500+ apps revenue exceeded $10M annually

Netflix ad-tier hits 23 million active users, fuels growth.

Netflix's advertising-based plan has reached over 23 million active users globally, with a significant portion highly engaged.

• Over 15 million users joined the ad-supported platform in the past two months.

• Ad-tier subscriptions make up 30% of new Netflix signups.

• The main focus of Netflix currently is scaling its business.

Google Axes Jobs Amid AI Focus, Expense Reduction

Google is trimming its workforce in several divisions, including engineering, as part of expense reduction efforts.

• Hundreds of workers laid off.

• Cuts focused on engineering, Google Assistant, and hardware.

• Decision tied to cost-cutting and AI focus.

• A continuation of tech industry layoffs.

⚡️ Quick

Amazon announces fresh job cuts in Prime Video, MGM Studios -Amazon is eliminating several hundred roles at Prime Video and Amazon MGM Studios, continuing the company's cost-saving job cuts.

Global ad market anticipates steady growth, favoring tech giants - The global ad market is projected to grow 5.3%, with digital ads making up 70% of the total ad revenue, despite regulatory concerns impacting "pure play" digital ad growth.

Twitch slashes staff, 500 jobs cut amid operational shakeup - Twitch is laying off 35% of its workforce, shutting South Korean operations, and facing notable executive departures amid complex expenses.

STARTUPS & VENTURE

Crypto Startup Funding Plummets, But Scene Stays Hopeful Despite Rough 2023

Crypto startups faced a challenging 2023, with venture capital investment decreasing to just $9.5 billion, lowered by two thirds from 2022. The downward spiral was heightened by legal issues, notably convictions of FTX co-founder Sam Bankman-Fried and ex-Binance CEO Changpeng “CZ” Zhao. However, despite the downturn, anticipation grows around the possible approval of Bitcoin exchange-traded funds and the initial public offering of Circle Internet Financial Ltd. NFT sales also dipped, but startups are exploring their applications beyond high-ticket digital assets.

💡 Why this matters: Despite a sharp downturn in crypto startups funding in 2023, there are signs of a possible recovery, fueled by potential regulatory approvals and an emerging focus on blockchain and AI intersection. However, an industry self-correction like this could deter small investors while inviting more strategic VC presence, altering the innovation landscape.

AI

OpenAI Launches GPT Store, Plans Revenue Sharing with Creators

OpenAI's GPT Store, a platform for sharing custom chatbots, has at last launched after repeated delays. Since the November announcement of the GPT Builder program, users have created over 3 million bots. The platform will initially only be available to subscribers of OpenAI's paid tiers, and a revenue sharing scheme for GPT creators is expected to take effect within the first quarter of the year. The rollout includes the introduction of the new, subscription-based ChatGPT Team module for small teams.

💡 Insight: OpenAI's GPT Store launch and revenue-sharing model may potentially escalate user engagement and investor interest. The undisclosed parameters of revenue distribution, alongside the tiered access system, could shift the market's perception of the company positively if the profitability proves sustainable.