December 7: This Week's Thematic Reads
If you missed out on this week's signals, we've got you covered
Aging of the Population
“Medicaid is the nation’s publicly financed health and long-term care program for low-income people. It was originally established to provide benefits to those receiving cash assistance or “welfare.” In the case of older Americans, that source of cash benefits was — and remains — the Supplemental Security Income (SSI) program. Over the years, however, Congress and the states have expanded Medicaid to reach a broad array of uninsured Americans living near or below the poverty level. Read more here
“The typical American retires far earlier than he or she expects to, and it's often not by choice, according to new research from the Transamerica Center for Retirement Studies. The median retirement age in the U.S. is 62, with nearly six in 10 retirees telling the research firm that they stepped back from the workforce earlier than they had planned. Almost half of those people said the reason came down to health issues, such as physical limitations or disability. Losing a job or an organizational change at their employer were among the other reasons people stopped working before they planned to retire.” Read more here
Artificial Intelligence, Digital Lifestyle
“The artificial intelligence boom is reshaping Black Friday, too. U.S. e-commerce sales on the unofficial shopping holiday hit a record this year, with online spending hitting $10.8 billion, up 10.2% from 2023, according to Adobe Analytics. Generative AI chatbots played a starring role in the retail bonanza, driving an 1,800% surge in retail site traffic compared to 2023, Adobe said. These tools, which mimic human conversations to help shoppers find deals, compare products, and check out faster, became essential for bargain hunters navigating this year’s online frenzy.” Read more here
Artificial Intelligence
“ChatGPT now has over 300 million people using the AI chatbot each week. OpenAI CEO Sam Altman revealed the milestone during The New York Times’ DealBook Summit on Wednesday, which comes just months after ChatGPT hit 200 million weekly users in August.
“Our product has scaled ... now we have more than 300 million weekly active users,” Altman said. “We have users sending more than 1 billion messages per day to ChatGPT.” Read more here
Artificial Intelligence, Digital Infrastructure, Nuclear Energy & Uranium
“Facebook-parent Meta said on Wednesday it plans to invest $10 billion to set up an AI data center in Louisiana, in what would be the tech company's largest data center in the world. The hyperscaler data center, which is planned in Richland Parish, is designed to process huge amounts of data required to support digital infrastructure, including artificial intelligence workloads. The development comes a day after Meta said it was seeking proposals from nuclear power developers to help meet its AI and environment goals, adding that it wanted to add 1 to 4 gigawatts of new U.S. nuclear generation capacity starting in the early 2030s.” Read more here
Cash-Strapped Consumer
“Deal-hunting during the event is now a mostly online pursuit. Seventy-two percent of shoppers made their purchases via the internet this year. Most in-store shopping supplemented consumers’ online spending. Economic motivations for the best deals drive Black Friday shopping, yet most consumers focus on discretionary spending, with 59% purchasing ‘nice-to-have’ items for others, 53% purchasing those items for themselves and 14% indulging in experiences like trips or massages. Additionally, data revealed that Black Friday shoppers using buy now, pay later (BNPL) spent more on average than others using credit or debit cards.” Read more here
“Nearly half of Americans at least somewhat agree with the statement, “I am living paycheck to paycheck,” as of the third quarter of 2024. The share shrank slightly between the second and third quarters of this year, but in 2022, less than 40% of Americans felt this way, Bank of America reports.” Read more here
“One thing has remained consistent in 2024 with cable TV bills going up…again. Both Comcast and Spectrum, two of the nation’s largest cable providers, have announced significant price increases, leaving many customers feeling gouged and frustrated. They are joined by many smaller cable TV companies and satellite TV companies like DIRECTV, raising their prices in 2024. For some, the increases could add up to $20 a month, translating to a whopping $240 extra per year.” Read more here
Cybersecurity
“Chinese government hackers have compromised telecommunications infrastructure across the globe as part of a massive espionage campaign that has affected dozens of countries, a top U.S. security official said Wednesday.” Read more here
“Forty-nine cybersecurity-related merger and acquisition (M&A) deals were announced in November 2024. This was a record month for 2024 in terms of M&A deals.” Read more here
“A new set of 15 SpyLoan Android malware apps with over 8 million installs was discovered on Google Play, targeting primarily users from South America, Southeast Asia, and Africa. The apps were discovered by McAfee, a member of the 'App Defense Alliance,’” Read more here
“A popular open-source game engine called Godot Engine is being misused as part of a new GodLoader malware campaign, infecting over 17,000 systems since at least June 2024… It's no surprise that threat actors are constantly on the lookout for new tools and techniques that can help them deliver malware while sidestepping detection by security controls, even as defenders continue to erect new guardrails.” Read more here
“The first UEFI bootkit specifically targeting Linux systems has been discovered, marking a shift in stealthy and hard-to-remove bootkit threats that previously focused on Windows. Named 'Bootkitty,' the Linux malware is a proof-of-concept that works only on some Ubuntu versions and configurations rather than a fully fledged threat deployed in actual attacks.” Read More Here
“Cybersecurity researchers have uncovered a sophisticated phishing campaign that leverages Microsoft Word’s file recovery functionality to bypass email security systems. This newly observed tactic involves sending intentionally corrupted Word documents as email attachments. These attachments evade detection due to their damaged state, though they remain recoverable within the Word application.” Read More Here
Data Privacy & Digital Identity
“Hackers are using artificial intelligence to mine unprecedented troves of personal information dumped online in the past year, along with unregulated commercial databases, to trick American consumers and even sophisticated professionals into giving up control of bank and corporate accounts.” Read more here
Digital Infrastructure
“Windstream is definitely seeing demand for lit fiber, such as the deal with Hurricane Electric, he said. It's getting requests for multiple 400 gig services between data centers and to new data center campuses, as well. “We’reexpanding our network to meet that demand, whether new routes, more capacity or lighting certain data centers being constructed,” he said. Windstream Wholesale is also seeing more demand for dark fiber.” Read more here
“The 6G air – or radio – interface will be one of the crucial aspects of the new cellular standard, the development of which is going to start to be studied in the second half of 2025… In 2028 and 2029, the lab tests will move into field trials in preparation of a commercial 6G launch in 2030… 6G will be designed with more spectral efficiency, more coverage and capacity.” Read more here
Digital Lifestyle
“Black Friday shoppers spent a record $10.8 billion this year, primarily via online purchases. A report Monday (Dec. 2) from NPR — citing data from Adobe Analytics — notes that this figure is 10% higher than last year’s total, and double the amount of spending from 2017. Between 10 a.m. and 2 p.m. Friday, online shoppers spent $11.3 million per minute, Adobe said… The report also cited data from Salesforce showing that 69% of Black Friday purchases came from mobile devices, up 1% from last year’s figures.” Read more here
“Walmart says its third-party sellers enjoyed record sales as the holiday shopping season began. The company’s Marketplace saw its highest-ever sales day and also set a single-day conversion rate record during the period between Nov. 25–Dec. 2, or Cyber Monday, Walmart announced Tuesday (Dec. 3). Walmart says this record comes as the company’s eCommerce business is experiencing substantial growth.” Read more here
EV Transition
“Monthly electric vehicle deliveries at XPeng, Nio, and Li Auto set a record in November. Things are looking even better for December. EV demand isn’t an issue in China. Pricing, however, continues to be a struggle…Combined, the three Chinese EV makers sold 100,210 vehicles in November. That’s a monthly record. December guidance implies about 131,000 cars sold, another record.” Read more here
Luxury Buying Boom
“Japan is still the land of rising fortunes for luxury-goods companies, even as trendsetters elsewhere have pulled back on purchases of expensive designer goods. Analysts say the outlook for Japanese domestic demand is as promising as it has been in years, due to gains in real wages and a strong stock market, which have encouraged spending.” Read more here
“Bulgari is expanding its footprint in India to take advantage of strong growth and favourable demographics, Bulgari chief executive officer Jean-Christophe Babin said in an interview with Bloomberg TV. The brand’s website lists 13 boutiques or official retailers in India. “We see more luxury to come in the coming months or years, which will propel India, if not in the top three, but probably to the top five or top eight market worldwide,” Babin said. Read more here
Nuclear Energy & Uranium
“Big tech firms including Amazon.com and Alphabet have recently made splashy investments in new kinds of small nuclear plants to power their AI data centers. The announcements have sent the stocks of startup nuclear developers Oklo and NuScale Power up 120% and 750%, respectively, this year. Now, there’s another set of buyers warming to the idea of putting lots of small nuclear reactors all over the country—state governments. New York, Texas, Virginia, Washington and Tennessee have lately started to join the bandwagon.” Read more here
“The stars are aligning for a nuclear power revival in the U.S. The government is funneling billions of dollars into the industry, tech luminaries like Bill Gates and OpenAI’s Sam Altman are backing new companies, and public support for nuclear power is firmly on the rise.” Read more here
“Apollo Global Management Inc. sees an “industrial renaissance” emerging as part of an energy transition investment opportunity worth $50 trillion over the coming decades, according to Leslie Mapondera, a partner at the private capital firm. “Just in Europe there’s probably $1.8 trillion to be spent” between 2025 and 2030, Mapondera, the company’s co-head of European credit, said at the Bloomberg Intelligence credit market outlook conference in London on Thursday.” Read more here
Safety & Security
“Russian President Vladimir Putin has approved a record-breaking defense budget, setting aside a staggering third of the government’s total spending as the war in Ukraine drains resources from both sides nearly three years on. The budget for 2025, which was published Sunday, allocates about $126 billion (13.5 trillion rubles) to national defense – amounting to 32.5% of government spending.” Read more here
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
Cash Strapped Consumer - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption or destruction of data.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Digital Lifestyle - The companies behind our increasingly connected lives.
Digital Payments - This model focuses on companies benefitting from the accelerating structural adoption of digital payments and financial technology (FinTech).
EPS Diplomats - Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansion.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The Strategies Behind Our Dividend Income Models
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.
Don’t be a stranger
Thanks for reading and if you have a suggestion for an article or book we should read, or a stream we should catch, email us at info@tematicaresearch.com. The same email works if you want to know more about our thematic and targeted exposure models listed above.