Weekly Market Digest: Social Platforms and Political Advertising Are in the Spotlight

U.S. Markets declined modestly this week along with bond yields during a relatively quiet week of trading. Impeachment inquires continued throughout the week and the back and forth between the US and China on trade negotiations continued. A missed deadline on implementing tariffs on foreign vehicles continued to spill into this week as well, with no decision announced from the Whitehouse as of this writing.

The Census Bureau released data this week that reported Americans are moving at the lowest rate in the roughly 70-year period this data has been tracked. Less than 33% of those who moved in the past year indicated that they moved for job-related reasons.

Initial jobless claims came in about 5% higher than expected at 227,000 versus expectations of 217,000 for the weekly report.
News outlets report that TD Ameritrade and Charles Schwab are in acquisition talks, and both companies’ share prices rose with the news on Thursday.

Weekly Returns

S&P 500: 3110 (-0.3%)
FTSE All-World ex-US(VEU): (-0.5%)
U.S. 10 Year Treasury Yield: 1.77% (-3.80%)
Gold: $1,462.3 (-0.3%)
EUR/USD: 1.1022 (-0.3%)

Major Events

  • Monday – Over the weekend, Ford announced a new electric SUV to wear the ‘Mustang’ branding.
  • Monday – FedEx announced an end to its Pension program for new hires.
  • Tuesday – U.S. Commerce Department reported that October homebuilding & permitting jumped to a 12 year all time high.
  • Wednesday – Google announced that it will self-impose restrictions on certain political advertisements.
  • Wednesday – The Senate passed legislation supporting Hong Kong over China, potentially complicating trade negotiations between China and the United States.
  • Thursday – Israel’s Prime Minister Benjamin Netanyahu indicted for Bribery, allegedly having paid for positive media coverage from local news outlets.
  • Friday – Amidst a series of jokes around being in a jam, the Smucker’s Company lowered its net sales forecasts. Large, staple food brands have been under pressure of late as consumer tastes seem to be changing.

Our Take: Social Platforms and Political Advertising in the Spotlight

On the back of Twitter’s recent announcement that they would eliminate politically focused advertising from their platform, Google announced this week that they plan to reduce the targeting granularity for political ads.

Effectively Google would make it more difficult to target advertisements based on known political leanings, instead keeping targeting to other less detailed demographic information.

This week’s development from Google prompted speculation around what other large information technology companies, such as Facebook, plan to do as well.

By doing this, both Twitter and Google, which are significant arbiters of information, are moving further into an already complex space of policing the information purveyed on their platforms.

Regardless of opinions on the benefits of this, one possible outcome of these changes is a reduction of future legislative risk for both companies. Legislative risk is a risk that future governmental regulations could impact a business’ profitability. Technology companies have been in focus in the news of late, and as such it seems reasonable that Google, Twitter, and others want to take steps to protect themselves from a potentially significant risk to their business profitability. In this case, it’s legislation to better control, vet, or validate the tremendous quantity of information consumed on their platforms.

Read More: Market Commentary


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