Starting today’s newsletter like my investments: with hope. Hope for the markets to be back up, because they’ve fallen 📉.

Today’s top stories:

1. Google embraces introducing AI mode in Search.

2. Trump-backed plan flops as government shutdown looms.

3. TikTok faces ban, billionaire McCourt want to buy it.

4. Wearable tech firm Ōura doubles valuation to $5.2bn.

5. Immigrants dominate U.S. population growth.

6. China’s rich cities are threatening its economy.

Market Pulse

🗓️ Economic Calendar

🔥 Top Stories

1. Google search embraces AI chat mode to battle 14x bigger ChatGPT 🔄

⏳️ The deets in 30 seconds:

• Google plans an AI Mode for Search, mimicking its Gemini AI chatbot, to deliver conversational answers.

  • Feature will sit beside tabs like "All" and "Images," with options for follow-up queries.

• Google is responding to OpenAI's ChatGPT and other AI rivals.

• Per data from Similarweb, Gemini trails ChatGPT with 14x fewer visitors.

• AI Mode may include spoken queries on Android.

• Ads for conversational answers are under consideration, but ad integration plans for AI Mode remain unclear.

💡 How it impacts you:

• Faster answers: Conversational responses could save time compared to scanning traditional search results with blue links.

• More interactivity: Expect a more chat-like experience with follow-up prompts and spoken queries.

• Ad clutter risks: AI Mode might eventually incorporate ads, potentially influencing answers.

• Competition benefits users: Rivalries with ChatGPT and others drive innovation in search experiences.

🔮 Industry prediction:

Search engines will evolve into digital concierges—answers first, links second—as AI battles heat up.

Who's Moving:

• 🏃‍♀️ Leading: OpenAI’s ChatGPT, Perplexity AI.

• 🚶‍♂️ Following: Microsoft Bing, Google Gemini, You.com.

• ⌛ Waiting: Apple, Amazon.

What's Next:

• Now: Google playing catch-up to ChatGPT.

• 6 Months: AI search becomes standard feature.

• 1 Year: AI-driven search becomes the standard, traditional link-based search as secondary option.

⚡ The bottom line:

Google’s AI Mode revamps search, blending chatbots with traditional results in a bid to outpace ChatGPT’s massive lead.

2. Trump-backed plan flops as shutdown looms 🚨

⏳️ The deets in 30 seconds:

• House rejects Trump-supported funding plan 235-174 with 38 Republicans voting no.

• Trump wanted the bill to include a debt ceiling waiver before his term starts.

• Musk rallied opposition via X, blaming Democrats after the bill failed.

• Democrats called the proposal a "giveaway for billionaires"; GOP dissenters highlighted $5 trillion in new debt.

• Without congressional action, government funding lapses Friday night.

💡 How it impacts you:

• Potential shutdown may disrupt federal services and delay disaster relief.

• Debt ceiling debates could mean market volatility and borrowing uncertainty.

• Rising tensions make bipartisan solutions harder, prolonging economic risk.

• Musk's growing influence could shift policy debates to more polarizing terrain.

• Short-term uncertainty might slow hiring or investment decisions in key sectors.

🔮 Industry prediction:

Fiscal policy is entering its "Shark Tank" era: dramatic pitches, sharp cuts, and risky bets dominating headlines.

Who's Moving:

• 🎯 Leading: Hardline Republicans, Democrats resisting debt ceiling hikes.

• ⚡ Following: Moderate Republicans caught in the crossfire.

• 👥 Worth Watching: Trump’s advisory team, Musk’s public influence.

Timeline:

• Now: Shutdown countdown and emergency GOP meetings.

• 6 Months: Debt ceiling debate intensifies amid a divided Congress.

• 1 Year: Potential fiscal reforms, driven by mid-term elections and external pressures.

⚡ The bottom line:

Trump-backed funding failed, $5T debt asked too much, and Musk’s online roasting added a "House of Cards" plot twist.

3. TikTok faces ban, billionaire McCourt want to buy it. ✨

⏳️ The deets in 30 seconds:

• TikTok risks a US ban on Jan. 19 unless ByteDance sells its operations.

  • Lawsuit has only a 30% chance of legal success in court.

• Billionaire Frank McCourt, ex-owner of the LA Dodgers, has pitched a plan to Congress and Trump’s team to save the app.

• McCourt’s plan excludes ByteDance’s algorithm, proposing a decentralized, US-based network inspired by Bluesky.

• ByteDance insists on not selling TikTok due to Chinese export rules on key algorithms.

• Amazon, Oracle, and others are seen as potential competitors in a sale scenario.

• TikTok creators support McCourt’s vision of platform control, including transferable follower lists.

💡 How it impacts you:

• Creators gain autonomy if McCourt’s vision for decentralized networks succeeds.

• A ban would disrupt over 150 million US TikTok users relying on the app for content and income.

• New ownership could reshape how data privacy and algorithms influence content.

• Influencers may benefit from platform independence to control audience migration.

• ByteDance’s refusal to sell keeps US-China tech tensions high.

🔮 Industry prediction:

The social media world is bracing for a Game of Thrones finale moment: alliances are shaky, and the throne could fall—but new decentralized kings like Bluesky or McCourt’s “TikTok 2.0” may rise.

Who’s Moving:

• 🏃‍♀️ Leading: McCourt, Bluesky, Project Liberty.

• 👨‍✨ Following: Oracle, Amazon.

• ⌛ Waiting: ByteDance, Meta.

What’s Next:

• Now: ByteDance battles in court, while McCourt recruits allies.

• 6 Months: Alternative buyers emerge, and creators face platform uncertainties.

• 1 Year: Decentralized platforms gain momentum as mainstream players adapt.

⚡ The bottom line:

McCourt’s decentralized TikTok pitch is Silicon Valley meets succession drama for US social media’s future.

4. 💎 Ōura doubles valuation to $5.2bn with $200M boost

⏳ The deets in 30 seconds:

• Ōura secured $200M in funding, doubling its valuation to $5.2bn since 2022.

  • Fidelity and Dexcom led the round, raising Ōura’s total funding to over $550M.

• Sales hit $500M this year with 2.5M rings sold, a 2x increase in revenue.

• Smart ring shipments grew 88%, outpacing the smartwatch market's 3% decline.

• Ōura plans to invest in AI, new products, global expansion, and acquisitions.

• Competing with Samsung’s Galaxy Ring, which Ōura sees as market validation.

💡 How it impacts you:

• More wearables: Smart rings’ popularity offers sleeker alternatives to bulky smartwatches.

• Subscription model: Expect ongoing costs beyond the upfront price.

• Improved health tracking: Enhanced AI could bring clinical-level insights to everyday users.

• Market shift: Growing preference for non-watch wearables may redefine fitness tech norms.

• Competition rises: Samsung’s entry could drive innovation and lower prices.

🔮 Industry prediction:

Wearables will ditch wrists for fingers, ears, and glasses as form factor innovation reshapes health tech.

Who's Moving:

• 🏃‍♀️ Leading: Ōura, Apple (with watch dominance), Dexcom (health integration).

• 🚶‍♂️ Following: Samsung, Fitbit (Google-backed), Garmin.

• ⌛ Waiting: Fossil, Huawei, and legacy watchmakers.

What's Next:

• Now: Rapid growth of smart rings and health-focused wearables.

• 6 Months: Increased competition with Samsung’s Galaxy Ring and potential new entrants.

• 1 Year: Broader health integration into wearables, targeting medical-grade capabilities.

⚡ The bottom line:

Ōura’s $5.2bn valuation is a ring-sized disruption to the wearable market dominated by smartwatches.

5. Immigrants Dominate U.S. Population Growth

New Census Bureau Data Highlights Immigration's Impact

Key Points ✍️ :

• Immigrants accounted for 84% of U.S. growth in the year ending June 30, 2024.

  • 2.7 million net arrivals were recorded in 2024.

• U.S. population grew by 1% to 340.1 million, the fastest rate since 2001.

• Southern states like Texas (563,000) and Florida (467,000) saw significant gains.

• 17 states had more deaths than births, but immigration offset population declines.

• California and New Jersey gained population from immigration despite losing residents domestically.

• Illegal immigration has slowed due to U.S.-Mexico collaboration and new policies.

Implications ⚒️ :

1. Workforce Growth: Immigrants are filling gaps in the labor force, vital as birth rates fall and the population ages.

2. Economic Uncertainty: Immigration policies under future administrations could significantly alter growth trends.

3. Regional Shifts: The South continues to gain from both immigration and domestic migration, while the Northeast and Midwest face losses.

4. Policy Relevance: Accurate data drives decisions on housing, healthcare, and workforce planning.

5. Federal Reserve Actions: Understanding labor trends is critical for inflation control and interest rate decisions.

Challenges and Future Considerations ⛰️ :

• Policy Decisions: Restrictive immigration policies could lead to labor shortages and wage inflation.

• Data Accuracy: Census methods must adapt to capture surges in immigration effectively.

• Regional Planning: States must adjust resources to meet growing or declining populations.

6. China’s struggling rich cities are threatening the entire economy 🏙️‍

The 8 regions China relies on for fiscal income contribution

⏳ The deets in 30 seconds:

• Wealthy Chinese provinces like Zhejiang and Jiangsu are now struggling with unpaid debts and fiscal shortages.

• Local governments owe $1.4M to contractors like Alex Zhang, reflecting wider cash crunch issues.

• Beijing launched a 10 trillion-yuan ($1.37 trillion) debt swap plan to refinance “hidden” provincial debts.

• Housing market crash has crippled local revenue, reducing funds for infrastructure and public wages.

• Foreign trade hubs like Suzhou see stagnating growth and foreign investment fears amid geopolitical tensions.

✨ How it impacts you:

• Economic slowdown in China could drive lower global trade volumes, impacting consumer prices.

• Geopolitical tensions and weaker Chinese exports may mean higher tariffs on imported goods.

• Reduced spending power in China’s middle class can affect luxury goods and global retail brands.

• Weak infrastructure spending may delay supply chain improvements, impacting global logistics.

• Businesses reliant on Chinese imports/export chains may see longer lead times and higher costs.

🔮 Industry prediction:

China’s fiscal crunch is like a broken levee—small repairs won’t hold as global trade waves grow heavier.

Key Players:

• 🌟 Leading: Beijing central authorities, SOEs managing debt restructures.

• ⚡ Following: Major exporters in Guangdong, Jiangsu’s manufacturing hubs.

• 🕵 Waiting: Western economies monitoring global ripple effects.

Timeline:

• Near-term: Slow impact of debt swaps by mid-2024.

• Mid-term: Further economic contraction if property markets remain stagnant.

• Long-term: Structural reforms may stabilize growth by 2026.

⚡ The bottom line:

China’s local debt crisis is a domino—once thought immovable, now toppling under the weight of housing busts and slow exports.

🗞️ Speed Reads

🤖 AI & Tech

Google reduced manager, director and VP roles by 10%.

Apple urged to axe AI feature after incorrect headline.

China’s AI elite rethink their jobs in Silicon Valley.

Google reveals AI reasoning model after OpenAI’s ChatGPT o1.

AI data center-boosted renewable energy demand to continue under Trump.

💼 Startup & Business

Perplexity closes funding round at $9 billion valuation.

Apple and Meta argue over the DMA’s interoperability requests.

11 iOS 18.2 features to try on your iPhone.

Tesla shares drop 5%, as post-election rally loses steam.

Here’s what the Fed’s rate outlook means for the world’s central banks.

🏢 US Politics

This is what could happen in a US government shutdown.

Trump tells EU to buy oil and gas from US or face tariffs.

GOP lawmakers want Musk to be Speaker.

💫 Mind Candy

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