Emerging Tech Entrepreneurs in 10 Cities: A Tale of 10 European Startups and a Surprise for Wall-Building in the Year of Our Lord 2019
Mallaby reported an incident from 2019 when Matt Miller, a partner at blue-chip VC fund Sequoia Capital, which has around $85 billion in assets under management, sent a memo to other partners at their office in Menlo Park, making the case that the European technology ecosystem was finally worth their attention. Given that $30 billion of European tech firms was invested in that year, Mallaby thought it would be appropriate for an American VC to find opportunity in Europe, a notion that was met with derision from Dublin to Berlin.
“How lucky for us bumpkin Europeans that the Americans came to teach us all about tech and VC in the year of our Lord 2019. We were busy trading clam shells until then …” tweeted Lisett Luik, an Estonian founder and investor.
Over the past few months, we’ve set out to find a new cohort of companies in 10 European cities (for the purposes of our report we count Tel Aviv as Europe) that are generating excitement among local entrepreneurs and investors. We aim to find ambitious founders at a relatively early stage who have a vision to build companies with purpose that are addressing a need or taking on a challenge. We do not claim that the list is exhaustive, or that the startups are the most-funded. We are hoping that it is a snapshot of companies in each city that are inspiring and exciting. Maybe, even, getting the attention of Silicon Valley.
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to the audio version of the newsletter by Clicking the link.
Wall Street, Wall Street Walls, and the Destruction of the Wall Street Darlings: The Case of Meta, Alphabet, and Moderna
Editors love to kill their darlings when they recommend that they toss out large swaths of stories that they like the most.
Wall Street seems to also have caught onto the concept. The downfall of companies that had dominated markets for years was surprising as the S&P 500 is down 20% in the next four years.
Even though Apple and Intel are considered safe-havens, investors are rushing to kill them by selling their stocks.
A year full of turmoil, such as economic uncertainty, political chaos, and elevated inflation, has happened. The energy sector is up about 60 percent year-to-date and is the only thing driving stocks overall from oblivion this year.
Market-cap titans aren’t holding up against the rising macroeconomic tides, which is most surprising.
Tech companies have long been seen as invincible, essentially money-printing machines by investors. That has not been the case this year as Alphabet stock fell nearly 40% and Microsoft
(MSFT) by 28%. Over a single day of trading in February, the market value of Facebook parent company Meta plummeted, experienced the largest decline in market value of any company this year. The company lost $232 billion.
Moderna, a darling of the last few years, has been sent sputtering this year thanks to its covid vaccine, and is currently among the worst performers of the year.
Premarket Stocks: The Rise and Fall of the U.S. Consumer in the Light of Recent Financial and Economic Adversarial Data
Even Walmart
(WMT), the big-box chain known for weathering many economic storms, is in the red this year, down just under 2%.
Surprising to the upside: There have been some companies that have been able to keep chugging along in 2022. Consumer staples posted their best relative performance to the S&P 500 since 2008 this year. Coca-Cola’s share price is up nearly 8% this year. Mondelez is up 1.5%.
The company is up 4%, while the entire tech sector is in a state of decline. The company is “trading well above its historical range,” wrote Bernstein Research analysts in a recent note. If we enter a recovery period, we believe that IBM is likely to lag major indices if it continues to have pressured markets, because of its defensive characteristics.
Just last month Bank of America CEO Brian Moynihan told CNN that the continued strength of the US consumer is nearly single-handedly staving off recession. According to the National Retail Federation data, 20% of total retail sales can be attributed to consumer spending in the last two months of the year.
But while American bank accounts are still fairly robust, they’re beginning to dwindle. Credit card balances increased in the third quarter. That’s the largest annual jump since the New York Fed began keeping track of the data in 2004.
Consumer spending will not grow in the years to come according to an analysis by global consulting firm EY Parthenon. Daco believes that the US could fall into a mild recession during the first half of the year because of persistently inflation, tighter financial conditions, and weaker global growth.
And with interest rates poised to go higher in 2023 and economic uncertainty sure to grow, consumers could be starting to run dry at the worst time, reports my colleague Alicia Wallace.
Source: https://www.cnn.com/2022/12/30/investing/premarket-stocks-trading/index.html
What Have You Learned in Europe Over the Last 15 Years? A Moment Before the Bell to congratulate and pray for the rest of the year 2022
2022 has been a wild ride, and I’m so grateful that you joined me for it. I hope that Before the Bell has helped you gain some semblance of balance in an economy that is often nonsensical and bad.
So as you count down to the New Year, please take a moment to congratulate yourself – you survived this year. No matter what state your portfolio is in, you need to take a break and reflect on what you have been through.
Europe’s stock markets have beaten Wall Street by the biggest margin in more than three decades over recent months as its economy looks set to dodge a recession many thought inevitable just a few weeks ago.
The overall rise is a reversal of a 15-year trend that has seen US stock indices, flush with fast-growing tech companies, consistently beat those across the Atlantic.
In a note issued earlier this month, Morgan Stanley said the reversal was driven by tumbling gas prices and a better-than- expected economic data in Europe.
Mathews at Capital Economics stated that the European wholesale gas prices fell in August after reaching a all-time high, and this contributed to the steady outperformance of European stocks. The peak price of Europe’s benchmark gas contract was 350 ($475) per megawatt hour.
The region has seen a slight decrease in the price of goods and services. In the countries that use the euro, inflation fell from a record high of 10.6% in October to 8.5% in January, preliminary data from the EU statistics office showed on Wednesday.
More broadly, investors have been encouraged by Europe’s economic resilience. GDP in the eurozone grew 3.5% in 2022 — more than in the United States or China — including a slight expansion in the final quarter, according to a preliminary estimate by the EU statistics office.
Salomon Fiedler of Berenberg bank wrote that the eurozone is likely to avoid a technical recession.
The tech world is not out of the woods yet: The impact of China’s re-opening on European equity markets and stock markets
Kasper Elmgreen, head of equities at Amundi, a French asset management firm, told CNN he is following the impact of China’s reopening on Europe “very closely.”
“You have 1.4 billion Chinese that are coming out of lockdown,” he noted. “We’ve kind of got the blueprint now, having seen this in other regions, and typically there’s a very significant amount of pent-up demand.”
According to Michael Hewson, chief market analyst at CMC Markets, investors are now better-off putting their money to work in Europe. An investor in a tracker fund for the Euro Stoxx 600 can expect to make 3.2% returns this year, compared to 1.6% in the S&P 500, he told CNN.
The US and European equity markets have both been viewed by investors as growth stocks, with companies expected to grow quickly and make big returns, while value stocks or shares that trade at a lower price than they are worth are seen more by investors.
Over the past decade, investors poured money into fast-growing tech stocks, aided by ultra-low interest rates. In that time, the tech-stock heavy Nasdaq
(BANK) soared 300%, compared with Germany’s DAX
(DAX), which only doubled, Hewson said.
From the second half of last year, Mathews said, analysts started to reduce their earnings forecasts for many US companies as it became apparent that some of the pandemic trends that kept people spending most of their time at home weren’t holding up.
Elmgreen at Amundi said that the recent outperformance of European stocks marked a paradigm shift due to the multi-year decline in interest rates.
Europe is not out of the woods yet. The historically high inflation rate keeps interest rates elevated for some time, even though inflation has started to cool. It is more expensive for companies to borrow to expand their business due to high interest rates.