Here are the main things investors should know to begin their day of trading:
1. Recovering From the Holiday
After four weeks of gains, the financial markets took a break on Monday. Stock prices went up in the weeks following a brief increase in the 10-year Treasury yield in late October, when it briefly went over 5%.
However, at the beginning of this week, the Dow, S&P 500, and Nasdaq Composite all experienced a slight decrease. It could be because of the holiday period.
According to Bespoke Investment, the S&P 500 has historically not performed as well in the trading week following the Thanksgiving holiday since 1945. Next, investors will be keeping an eye on the consumer confidence report scheduled for release on Tuesday.
2. E-Commerce Boost
On Monday, stocks related to e-commerce received a boost following strong Black Friday sales and optimistic expectations for Cyber Monday. Etsy and Wayfair saw their shares increase by approximately 3% and 7%, respectively.
Companies that provide software for online shopping also experienced positive momentum. Shopify, a technology provider for online retailers, observed its shares closing nearly 5% higher after announcing a record $4.1 billion in sales by merchants.
Additionally, Adobe Analytics reported that buy-now-pay-later services like Affirm, Klarna, and Afterpay contributed to $5.9 billion in online spending between November 1 and November 23, marking a 13.4% increase from the previous year. Affirm’s shares closed almost 12% higher on Monday.
3. Not So Fast
There’s still uncertainty surrounding Amazon’s significant purchase of a robot vacuum company. On Monday, shares of iRobot, the maker of Roomba, fell by 17% following a warning from the European Union’s antitrust watchdog.
The European Commission, currently investigating the $1.7 billion acquisition, expressed concerns about potential competition issues. They noted that Amazon might have the power to hinder or diminish the access of iRobot’s competitors to its online platform.
iRobot’s shares had previously jumped by 39% on Friday, fueled by reports from Reuters suggesting that the EU would likely approve the deal.
4. Investment in India
Foxconn Technology, a major supplier for Apple, is stepping up its investments in India. According to a securities filing, the company plans to invest over $1.5 billion in an undisclosed construction project in India to meet its operational requirements.
Foxconn’s factories play a crucial role in the manufacturing of Apple’s iPhones, but the company is looking to reduce its reliance on substantial operations in mainland China, particularly following disruptions caused by Covid-19 lockdowns. Foxconn already has ongoing projects in India, including factories in the states of Karnataka and Telangana.
5. Shein’s IPO
The fast-fashion brand Shein has secretly submitted paperwork to go public in the United States. The company was last estimated to be worth $66 billion and might commence trading on the stock market as early as next year.
Despite its rapid success, the Chinese-founded company has attracted attention and criticism in anticipation of its widely rumored initial public offering. Allegations include the use of forced labor in its supply chain, violations of labor laws, environmental concerns, and accusations of plagiarism from independent artists.
Investors face a mixed landscape as markets take a breather from holiday gains. E-commerce enjoys a boost after robust Black Friday sales, while Amazon’s robot vacuum acquisition faces EU scrutiny. Foxconn’s significant investment in India signals a shift from China, and Shein’s secretive IPO plans draw attention amid concerns about labor practices and environmental impact.