Business and Finance News - 12.2.24

Question of the day: How does monetary policy affect small businesses?

Monetary policy affects small businesses by changing borrowing costs and consumer spending. When interest rates are low, it’s easier for small businesses to take out loans and invest in growth, but higher rates make borrowing more expensive and can slow expansion. It also impacts how much people spend; lower rates encourage more spending, while higher rates often reduce it, directly influencing a small business’s sales and income.

*Have a question? Submit it to [email protected].

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U.S. Black Friday spending rose 3.4% year-over-year, with online sales growing 14.6% while in-store sales saw minimal growth or decline, depending on the source. E-commerce platforms like Amazon and Walmart benefited most, while department stores and big-box retailers faced muted sales amidst inflation and a shorter holiday season. (Reuters)

Key Insight → This reflects shifting consumer behavior, with a notable rise in online shopping and muted in-store activity during Black Friday, signaling the growing dominance of e-commerce. Despite a 3.4% overall increase in spending, inflation-adjusted data suggests a weaker performance for brick-and-mortar retailers, highlighting challenges in attracting foot traffic and competing with online giants like Amazon. The trends underscore the evolving retail landscape, where convenience and digital accessibility are increasingly prioritized, reshaping strategies for both traditional and online businesses.

President-elect Trump has threatened 100% tariffs on BRICS nations (Brazil, Russia, India, China, and South Africa) if they move away from using the U.S. dollar in international trade. The warning is part of Trump's broader strategy to use tariffs as leverage to influence international policy and negotiations. (Axios)

Key Insight → This underscores the potential for heightened economic tensions between the U.S. and the BRICS nations (Brazil, Russia, India, China, and South Africa), which could have extensive geopolitical implications. Trump's threat of 100% tariffs against countries moving away from the U.S. dollar reflects his strategy of leveraging economic tools to maintain dollar dominance in global markets. This move could strain international relationships, disrupt trade flows, and escalate efforts by BRICS nations to diversify away from U.S. economic influence, potentially reshaping the global economic order.

Elon Musk’s attorneys filed a motion to block OpenAI from transitioning to a for-profit entity, claiming it could lack funds to pay damages if Musk wins his lawsuit. They also allege antitrust violations, accusing OpenAI and Microsoft of discouraging competition and improperly sharing sensitive business information. (The Verge)

Key Insight → This highlights the escalating legal and ethical disputes in the tech industry, particularly around the balance between innovation, profit motives, and fair competition. Elon Musk's lawsuit against OpenAI underscores concerns about antitrust violations and the implications of OpenAI's transition from a non-profit research organization to a for-profit entity. The outcome of this case could reshape the dynamics of competition and governance in AI development, with potential ripple effects on regulatory practices and investor behaviors in the tech sector.

Here’s how the major indexes did on Friday:

• Dow Jones Industrial Average: 44,910.65 +188.59 (+0.42%)

• S&P 500: 6,032.38 +33.64 (+0.56%)

• Nasdaq Composite: 19,218.17 +157.69 (+0.83%)

• Russell 2000: 2,434.73 +8.53 (+0.35%)

Here’s how The Magnificent Seven did on Friday:

• Apple (AAPL) [3.587T]: 237.33 +2.40 (+1.02%)

• Nvidia (NVDA) [3.386T]: 138.25 +2.91 (+2.15%)

• Microsoft (MSFT) [3.148T]: 423.46 +0.47 (+0.11%)

• Amazon (AMZN) [2.186T]: 207.89 +2.15 (+1.05%)

• Alphabet (GOOGL) [2.068T]: 168.95 -0.28 (-0.17%)

• Meta Platforms (META) [1.45T]: 574.32 +5.12 (+0.90%)

• Tesla (TSLA) [1.108T]: 345.16 +12.27 (+3.69%)

Here’s how Bitcoin and Ethereum did yesterday:

• Bitcoin (BTC): $97,754.97 (5:45PM PST on 12/1/24)

• Ethereum (ETH): $3,726.58((5:45PM PST on 12/1/24)