What's News in Markets: Black Friday Bump, GM Buyback, Tesla Cybertruck
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Hey, your money briefing listeners. I'm Francesca Fontana for The Wall Street Journal. Every week I write a column for the journal called The Score. It's a look at the biggest stock moves of the week and the news that drove them. We've heard that a lot of you can't get enough of our markets coverage. So we're going to be trying something new and bringing you what's news in the markets each Saturday for the next few weeks. Take a listen and let us know what you think. This was a November to remember for the stock market. On Thursday, we wrapped up the best month for stocks in more than a year, putting an end to a three-month losing streak. Now, investors are watching to see whether the market can keep up the pace in December and whether we'll end 2023 with a Santa rally, a magical year-end market pop.
Since 1950, the S&P 500 has traded higher about 78% of the time during that period, the last five trading days of the year and the first two of the new year. Market buffs may not believe in Santa, but they do believe in the Santa rally. We've all been bombarded with the post-Thanksgiving Black Friday and Cyber Monday ads, and maybe we spent a little more money than we expected to. But all of those deals translated into big sales for retailers and some big stock moves this week. One beneficiary was the e-commerce platform Shopify.
What market context set the stage for this week's stock moves?
It said its merchants recorded $4.1 billion in Black Friday sales this year. That's up about 22% from last year. And if you think that's a lot, Shopify says, including Cyber Monday, sales reached a record $9.3 billion. And as a result, Shopify shares jumped 4.9% on Monday. The celebration was cut short, though, when the stock gave back some of those gains throughout the week. Now, Black Friday shoppers who wanted to get in on the deals without splurging all at once, they turned to buy now, pay later options, like Affirm, Klarna, and Afterpay. They all do what it says on the tin. You buy now, and you pay in installments, aka later. And a lot of shoppers turn to these options. One report Monday said they drove $760 million in online spending on Black Friday.
As a result, Affirm saw its shares rally 12% on Monday, and investors kept the party going throughout the week. Now let's talk automakers. As you've heard on What's News, General Motors is shifting gears. On Wednesday, it unveiled plans for a $10 billion stock buyback next year. This is GM's largest buyback in recent memory, and it's a big move aimed to reassure investors about the health of its business. What are investors concerned about? Well, there's the looming costs of GM's new contract with its workers after that big auto strike. That's going to cost roughly $9 billion over about four years. And GM also had some setbacks in new pursuits like electric vehicles and driverless cars. The company's actually freeing up funds that were earmarked for developing EVs and autonomous cars and using that capital instead to help fund this big buyback.
So how did investors react? Pretty darn well. GM shares jumped 9.4% on Wednesday and held on to those gains throughout the week. Speaking of electric cars, Tesla at long last debuted its first electric pickup truck on Thursday. The aptly named Cybertruck has been a long time coming. It was first unveiled back in 2019. And if you look at a picture of this thing, it looks like it drove itself straight out of a sci-fi movie. Stainless steel exterior, doors designed to be bulletproof, very Blade Runner. But some of the features that make the design so unique are also what have made it so difficult and costly to manufacture. And by the time it finally arrived, the price tag on the truck has grown to about $21,000 higher than what Tesla said it would be four years ago.
So all in all, it was a big launch, very flashy.
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