What’s News in Markets: Salesforce AI Boost, New Five Below CEO, American’s Card Deal - WSJ What’s News

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WSJ What’s News in Markets: Salesforce AI Boost, New Five Below CEO, American’s Card Deal

Released on December 7, 2024

Hosted by Francesca Fontana, The Wall Street Journal

1. Market Overview

As December kicks off, the U.S. stock markets continue their robust performance from November. Last week marked record highs for both the S&P 500 and the Dow, concluding November as their best month of 2024. Francesca Fontana highlights that "stocks really put their best foot forward in the first trading week of the month" (02:15).

A significant driver behind this optimism is the latest economic indicators and anticipation surrounding the Federal Reserve's upcoming policy meeting. The recent jobs report paints a picture of a resilient labor market. However, it remains "not good enough to forego a rate cut," suggesting potential favorable conditions for equity markets. "Rate cuts are generally good for stocks," Fontana notes, attributing the majority of the index gains to this expectation (04:30).

Index Performance:

Dow Jones Industrial Average: Slight weekly decline of less than 1%.
Nasdaq Composite: Increased by approximately 3.3%.
S&P 500: Rose by 1%.

2. Cryptocurrency Developments

Midweek brought notable shifts in the cryptocurrency landscape. President Elect Donald Trump appointed Paul Atkins to lead the Securities and Exchange Commission (SEC). Atkins has signaled a more lenient stance towards crypto firms, questioning the SEC's stringent regulations. Francesca reports, "Atkins has questioned the SEC's crackdown on crypto firms and he's expected to ease oversight on those companies" (07:50).

This announcement had an immediate impact on the crypto market, with Bitcoin experiencing a rally that pushed its value above the unprecedented milestone of $100,000 for the first time.

3. Technology Sector Insights

The tech sector saw substantial gains, predominantly led by Salesforce. The cloud software giant reported impressive earnings, surpassing analyst expectations for the third quarter. Following these results, Salesforce not only raised its annual revenue outlook but also saw its stock soar.

Marc Benioff, CEO of Salesforce, attributed the strong performance to the company's latest artificial intelligence (AI) initiative. "Our new AI offering, Agentforce, is at the heart of our robust performance," Benioff stated (12:45). Agentforce provides customers with AI-driven agents capable of automating various functions, enhancing operational efficiency.

As a result, Salesforce's shares jumped by 11% during the session and maintained most of that upward momentum, culminating in a nearly 10% weekly gain.

4. Discount Retail Sector: Dollar Tree and Five Below

Dollar Tree: Dollar Tree, which also owns the Family Dollar chain, delivered strong quarterly results, prompting the company to raise its annual sales guidance. In addition, Dollar Tree announced a significant executive change: the finance chief will be stepping down. However, the departure is not linked to any operational disagreements. "The departure isn't due to a disagreement on operations or policies," Fontana clarifies (15:20). Following these announcements, Dollar Tree's shares experienced a modest rise of 1.9% on Wednesday but concluded the week with a gain of just under 1%.

Five Below: In contrast, Five Below enjoyed a stellar week, buoyed by robust Black Friday sales that contributed to a surge in quarterly sales. The company also introduced Winnie Park, formerly of Forever 21, as its new Chief Executive Officer on Thursday. This leadership change was well-received by investors, leading to a dramatic 10% surge in shares during the trading session and an impressive weekly gain exceeding 20%.

5. Airline Industry News: American Airlines

As the holiday season ramps up, American Airlines made headlines with strategic moves in its credit card partnerships. The airline has appointed Citigroup as its exclusive credit card provider for the next decade. According to Francesca, "the deal will help boost payments by 10% a year," signaling a significant enhancement in transactions (20:10). This partnership also marks the end of American's agreement with Barclays, with All City set to take over Barclays' portfolio of American Airlines credit cards. The transition for cardholders is expected to begin in 2026.

Investors are optimistic that this strategic shift will enable American Airlines to compete more effectively with its profitable rivals. Coupled with a stronger-than-expected financial outlook, American Airlines' shares soared by 16% on Thursday and achieved a weekly gain of approximately 20%.

Conclusion

This week in the markets was characterized by strong performances across various sectors, driven by positive economic indicators, strategic corporate moves, and advancements in technology. From Salesforce's AI-driven growth to Five Below's impressive sales and American Airlines' strategic partnership with Citigroup, investors have multiple fronts of opportunity to consider.

For more detailed analysis and updates on stock movements influenced by the week's news, visit the WSJ Exchange section.

Produced by Anthony Bansi with supervising producer Taliar Bell. Francesca Fontana, The Wall Street Journal.

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Francesca Fontana
Discover more@viking.com hey listeners, it's Saturday, December 7th. I'm Francesca Fontana for the Wall Street Journal and this is what's News in Markets, Our look at the biggest stock moves of the week and the news that drove them. Let's get to it. Welcome back and welcome to December. So just to recap, The S&P 500 and the Dow both ended last week at records and capped November as their best month of 2024. So how did the market start December? Well, it seems like stocks really put their best foot forward in the first trading week of the month. A big theme was the latest reads on the economy and what kind of interest rate decision we can expect ahead of the Fed's policy meeting next week. Friday's jobs report showed that the labor market is still in pretty good health, but not good enough to forego a rate cut. Rate cuts are generally good for stocks, so as you might expect, the indexes mostly moved higher on that. Earlier in the week, we saw some big crypto moves. On Wednesday, President Elect Donald Trump picked Paul Atkins to run the securities and Exchange Commission. Atkins has questioned the SEC's crackdown on crypto firms and he's expected to ease oversight on those companies. So after the announcement, Bitcoin rallied and exceed $100,000 for the first time. Wednesday also saw some big gains in tech, led by Salesforce, but I'll come back to that in a bit. Now let's look at the indexes, which all hit daily records throughout the week. The Dow had a weekly loss of less than 1%, while the Nasdaq gained about 3.3% and the S&P rose 1%. Let's zoom in on some discount retail stocks, Dollar Tree and five Below. The two made some noteworthy moves this week, reporting strong quarterly results and some executive shakeups. First, Dollar Tree, which also owns the family dollar chain. Dollar Tree raised its annual sales guidance and announced that its finance chief will be stepping down, adding that the departure isn't due to a disagreement on operations or policies. Dollar Tree shares rose 1.9% Wednesday but ended the week with a gain of under 1%. Then we had 5 below. It raised its annual guidance after strong Black Friday sales helped fuel a jump in quarterly sales, and the company had its own C suite news to announce. Forever 21's chief executive, Winnie park, will be its new Leader on Thursday. Five Below shares surged 10%, ending the week with a gain of more than 20%. Circling back to Salesforce, the cloud software company also reported earnings this week and you could say its stock was on Cloud nine. Following the results, Salesforce raised its annual revenue outlook and posted third quarter sales that beat analysts expectations. Why? AI Chief executive Marc Benioff said that a new artificial intelligence offering introduced in September was at the heart of the strong performance. That offering is Agentforce. Clever name, Salesforce. Very clever, which gives customers access to AI agents that can automate certain functions. Salesforce was one of the big gainers on Wednesday, leading tech stocks higher. ITS shares jumped 11% during the session and held onto most of that ground, notching a weekly gain of nearly 10%. All right, it's that time of year again when everyone's booking their holiday flights and when many people reach for their airline credit cards. Well, American Airlines had some credit card news that sent its shares flying. The carrier chose Citigroup as its exclusive credit card provider for the next 10 years, saying that the deal will help boost payments by 10% a year. That also means the end of American's agreement with its second card issuer, Barclays. Now it's All City, which will take over Barclays portfolio of American Airlines credit cards and begin transitioning cardholders in 2026. Investors are hoping that the deal will help American catch up with its more profitable competitors. Meanwhile, the company also gave a stronger than expected financial outlook, so investors were over the moon and American airlines shares jumped 16% Thursday. And on a weekly basis, the stock gained about 20%. And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in the Score, my column in the Wall Street Journal's Exchange section. Today's show was produced by Anthony Bansi with supervising producer Taliar Bell. I'm Francesca Fontana. Have a great weekend and see you next.