The $3 trillion club just doubled in size. There's two now.
Microsoft has become the second business in history to reach that market capitalization. It was the tech company's enthusiasm and investments in artificial intelligence that helped push it over the landmark threshold that only Apple has previously surpassed. The stock closed at an all-time high on Wednesday and is already up nearly 7% so far this year. The race is on for the first $4 trillion company.
PERSONAL FINANCE
Today's Consumer: Bigger Credit Card Debts, Smaller Bank Deposits
America's credit card hole is just getting deeper and deeper.
The four largest banks in the US all saw higher credit card spending by their customers in 2023 than the year before, The Wall Street Journalreported on Wednesday. And it doesn't look like that debt will be paid off anytime soon either.
Plastic People
Some records aren't meant to be broken. At the start of last August, US consumers hit a combined $1 trillion in credit card debt for the first time ever. Five months later, and… it's gotten a little worse, thanks in part to December's better-than-expected holiday retail sales.
While debt is at a new peak, the ascent has been building since the pandemic. "Over the past two years, Americans' credit card balances have skyrocketed 40%," Bankrate's Ted Rossman told CNBC. And many of the pandemic-era safety nets — stimulus checks, rent moratoriums, student loan payment pauses — have all dried up. That's contributed to bank deposits dropping year over year, as consumers, especially at the low-income end, have been dipping further into credit card debt to stay afloat:
Credit card spending at JPMorgan Chase, Bank of America, and Wells Fargo has gone up every year since 2020 — though spending by Citigroup customers went down slightly in 2022 before going back up. At Chase, spending was up 9% year-over-year in 2023. It was even higher at Wells Fargo, clocking in at 15%.
Delinquent payments at all four banks have been on the rise since 2021. Unpaid balances rose 14% at JPMorgan YoY and 9% at Bank of America. A recent survey from Bankrate found that 56 million credit card holders have been in debt for at least a year.
The Cost of Learning: Consumers are increasingly seeking bargains — even in higher education. Enrollment in community colleges — especially those with vocational programs — is on the uptick, Bloomberg reported, rising 2.6% from 2022 to 2023.
Many Americans have seemingly begun to lose faith that four-year schools are the de facto gateway to financial security. In one survey reported by The New York Times, the percentage of young adults who said that a college degree is "very important" fell to 41% from 74% in the last 10 years or so. They've adopted a Good Will Hunting attitude, preferring the $1.50 in late charges at the public library to $150,000 in tuition.
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Why now? As more of the world's largest corporations and governments commit to zero carbon emissions by 2030, clean energy companies like Infinity will attract a bigger spotlight. This is an opportunity to become a shareholder before the expected rise of clean energy, by investing in one of the companies making it possible.
Infinity's solutions may fuel a moon colony one day!
Apple is side-stepping the new side-loading rules.
The European Union is set to blow the doors off the tech giant's single-app store dominance by demanding "side-loading" compatibility, allowing users to download apps directly off the web or competing app stores. But Apple, according to a Wall Street Journal report, has other plans — namely, imposing fees and rules on side-loaded apps.
Secondary Market Power
The EU's war against Apple's App Store is pretty simple: the tech giant had total control over the app store on Apple devices, and therefore could unfairly use its market power to demand commissions, impose rules and restrictions, or bury apps that may compete with first-party offerings of its own (Google's Android Play Store is similarly targeted, but the company has been slightly more flexible about allowing third-party app stores on its devices). The issue came to fruition when tech players like Spotify and Fortnite-maker Epic Games grew sick of sending Apple a cut of each sale or subscription renewal completed on its devices, and sought the ability to let users make payments directly via the web.
After a lengthy legal battle, the EU's competition court sided with the third-party platforms last year, demanding that both Apple and Google open their devices to side-loading. The new, wild, wild west is coming in March, and it's safe to say Apple — which has an App Store operating margin potentially as high as 80%, one analyst told the WSJ — is trying to finagle its way back to being the sheriff of its own devices:
Apple, which has long argued its walled garden approach keeps its devices safe from malware and other security concerns, plans to still review each app that will be downloaded outside of the App Store, sources told the WSJ.
The company is also planning to impose fees on developers who make apps available outside the App Store, sources told the WSJ.
The legality of it all is still murky. Apple is due to present its new side-loading plans and policies to the EU soon, after which the European Commission will rule whether it complies with its new laws.
Epic Fail: Similar change is afoot in the US. With its legal battle with Epic finally over, Apple now must allow third-party developers to direct users to theoretically cheaper payment options outside the App Store. In response, Apple updated its policies on Tuesday, stipulating that third-party developers that circumvent the 30% cut will still have to pay a commission… of 27%. Something tells us this is far from settled.
Written by Brian Boyle
REGULATION
The SEC Is Finally Cracking Down on SPACs
Safer SPACs?
On Wednesday, the SEC voted in new rules governing the special purpose acquisition companies that at one point seemed to entirely supersede the typical IPO playbook, instilling a new batch of protections for investors. SPAC mavens, unsurprisingly, are none too pleased.
The Empire Strikes SPACs
The SPAC pitch for companies looking to go public was pretty simple: team up with a blank-check company and bypass a lot of the pesky steps and rules needed to complete a traditional IPO.
But there's always a catch. The loosey-goosey nature of SPAC deals made them prone to conflicts of interest and, without rigid disclosure requirements, over-embellished details of core business fundamentals. And because early investors are typically granted special rights, they often cashed out early, leaving mom-and-pop day traders left holding the bag as share prices plummet. Just 27 of the 401 companies that have completed SPAC mergers since January 2021 have seen share price increases, according to SPACInsider.
That led to a series of disastrous SPAC mergers:
Last year, 21 companies that went public via a SPAC merger filed for bankruptcy, according to data compiled by Bloomberg. That destroyed roughly $46 billion of total equity value compared to market cap peaks.
Worse, some 140 companies that took the SPAC route will likely need financing this year to maintain operations. And, according to Hudson Labs, about 44% of SPAC companies that filed annual reports last year announced going-concern warnings, versus just 22% of non-SPAC firms.
The Fix is in: The SEC's new guardrails, due to take effect in about five months, are pretty simple: more disclosures, essentially requiring companies going public via SPAC mergers to operate as transparently as a company pursuing an IPO would. "Just because a company uses an alternative method to go public does not mean its investors are any less deserving of time-tested investor protections," SEC chair Gary Gensler said in a statement Wednesday. Then again, when investors are pouring into patently shifty SPAC opportunities — as many did recently with the recently SPAC-merged Vietnamese EV firm VinFast, which, despite barely starting production, briefly had a valuation double Ford and GM's before immediately tumbling — maybe what some investors need protection from most is themselves.
$27.5 Million, 1.7 Million Bottles. That's how much capital Vinovest has returned to investors and the number of bottles it has under custody. Quite a track record. And with Barron's projecting that whiskey investing is "a global phenomenon that shows no signs of slowing down," now could be a perfect time to add casks of whiskey to your portfolio. Schedule a call with a Whiskey Advisor today.
Extra Upside
Digital pickpockets: North Korea-linked cybercriminals hacked 20 crypto platforms last year, report says.
In a jam: Smuckers removes the century-old Knotts Berry Farms Food brand from store shelves.
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The Cost of Learning: Consumers are increasingly seeking bargains — even in higher education. Enrollment in community colleges — especially those with vocational programs — is on the uptick, 
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