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Vested Shorts: GM’s $1.9 billion loss, record US oil production, NYT’s 10 million subscribers, and NFT trading plummets

by Parth Parikh
November 11, 2023
3 min read
Vested Shorts: GM’s $1.9 billion loss, record US oil production, NYT’s 10 million subscribers, and NFT trading plummets

In today’s edition

  • Challenges in the autonomous taxi industry
  • Record US oil production lowers prices
  • The NYT’s digital expansion
  • OpenSea struggles as NFT trading plummets

Market Snapshot

U.S. stock markets rallied on Friday, with both the S&P 500 and Nasdaq Composite recording gains for the second week in a row, despite concerns raised by Federal Reserve Chair Jerome Powell’s hawkish comments on Thursday. These remarks, combined with a lackluster Treasury auction, had briefly spiked the 10-year Treasury yield. However, investor confidence remained strong, buoyed by the possibility of the Federal Reserve halting interest rate hikes. Attention is now turning to the forthcoming October Consumer Price Index (CPI) and Producer Price Index (PPI) reports.

In market performance, the S&P 500 Index rose 1.6% in market performance, closing at 4,415.24 with a weekly gain of 1.3%. The Dow Jones Industrial Average increased by 1.2%, ending at 34,283.10, up 0.7% for the week. The Nasdaq Composite notably advanced 2.1%, reaching 13,798.11, an increase of 2.4% for the week.

The upcoming week is expected to be eventful, with over 700 companies, including major retailers such as Home Depot, Target, TJX Companies, Macy’s, Walmart, and BJ’s Wholesale Club, slated to announce their earnings. These reports are eagerly awaited for insights into consumer spending trends as the holiday season approaches.

Market closing data for the week from November 6th to 10th, 2023

News Summaries

GM’s Cruise, a robotaxi venture, is grappling with significant safety and operational issues, leading to the recall of 950 vehicles after reported incidents in San Francisco. This setback, contributing to a $1.9 billion loss for the project from January to September, highlights the hurdles in implementing autonomous vehicles in urban areas. Despite initial plans for improving metropolitan transit accessibility with driverless rides, Cruise faced challenges including traffic blockages, vehicle malfunctions, and two collisions necessitating a fleet reduction by 50%. The company has admitted software defects and paused operations and vehicle production. Meanwhile, competitor Waymo has expanded its service area but also faced layoffs and regulatory pushback. These difficulties underscore the challenges in gaining public trust and successfully integrating autonomous taxis into cities.

US oil production has hit a record high of 13.2 million barrels per day, leading to a significant drop in crude oil prices, with the West Texas Intermediate crude falling over 15% to around $76 a barrel since late September. This decline persists despite production cuts by countries like Russia and Saudi Arabia and is further influenced by a decrease in global demand, notably from China, amid its economic slowdown. The price drop is unusual, occurring even amidst geopolitical tensions like the Israel-Hamas conflict, underscoring the dominant impact of US production and Chinese demand on the oil market.

The New York Times Company witnessed a 6% rise in its shares following its milestone of surpassing 10 million subscribers, moving steadily towards its 2027 target of 15 million. This achievement, highlighted by a 9.3% increase in sales year-over-year, compensates for the declining print subscriptions. The company’s successful expansion into digital realms, including gaming and sports, is evident from the addition of over 800,000 digital-only subscribers. Strategic acquisitions like The Athletic and the game Wordle have broadened its revenue sources, reducing reliance on advertising to less than 20%. This growth demonstrates the NYT’s effective strategy in offering diverse digital content and multiproduct bundles, in line with the vision for a larger, more profitable organization.

OpenSea, a leading Non-Fungible Token (NFT) marketplace, is downsizing its workforce by 50% due to declining interest and value in the NFT market. This move follows a dramatic drop in NFT sales on the platform, which plummeted nearly 99% from a peak trading volume of around $4.9 billion to less than $50 million in October 2023, marking the lowest figure since January 2021. This downturn reflects a broader shift in the NFT landscape, once buoyed by celebrity endorsements and high-profile sales like digital artist Beeple’s $69 million NFT, but now struggling with market oversaturation and scam allegations. Despite some remaining cultural presence, as evidenced in recent media like “The Simpsons,” the decline in NFT popularity and value has led to significant operational changes for companies like OpenSea.

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