Good Afternoon. December’s only three days old and already delivering drama: shoppers are spending, lawmakers are pretending they don’t love trading stocks, and ADP says the job market hit the snooze button. Bitcoin’s back above $92K, the Dow is feeling festive, and everyone’s wondering whether the Fed will play Santa or Grinch next week. Let’s get into it.

—Rosie, Wyatt, Evan & Conor

🔥 What’s Hot: 🔥

🥶 What’s Not: 🥶

1. Dow Pops 400 Points as Bitcoin Extends Rebound

The News: The Dow jumped 408 points (+0.9%) on Wednesday as softer labor data reignited hopes the Fed will cut rates next week. The Nasdaq lagged (+0.17%) and tech stocks in the S&P 500 slipped, while the dollar weakened sharply — especially against the British pound. ADP reported the private sector shed 32,000 jobs, a “modest fall” that Capital Economics says should give the Fed enough cover for another rate cut on Dec. 10. Bitcoin climbed back above $92,000, extending Tuesday’s bounce. Retail earnings were mixed: Macy’s dipped, then recovered after raising full-year guidance. Dollar Tree beat adjusted earnings expectations. American Eagle surged on strong results and high-visibility campaigns starring Sydney Sweeney and Travis Kelce.

Why It Matters: Markets are increasingly trading on macro signals rather than earnings, and Wednesday’s drop in private-sector jobs gave investors what they wanted: a justification for a Fed rate cut next week. Lower rates would ease borrowing costs, boost liquidity, and support risk assets from stocks to crypto.

What to Watch: Markets head into the week holding their breath: a soft ADP print boosts hopes for a Dec. 10 Fed cut next week, but policymakers may stay cautious with the official jobs report still delayed. Markets want good news on rates, fear bad news, and will absolutely overreact to whichever arrives first.
Source: wsj.com

2. Anthropic Preps for a 2026 IPO

The News: Anthropic has hired Wilson Sonsini, Silicon Valley’s go-to IPO law firm. to lay the groundwork for a public listing as early as 2026, according to Financial Times reporting. The move positions Anthropic directly in a race with OpenAI to become the first major generative-AI company to hit public markets. The San Francisco–based Claude maker has also begun informal conversations with major banks about underwriting but hasn’t locked in a timetable.

Why It Matters: Anthropic isn’t just behaving like a late-stage startup, it’s behaving like a megacap in training. A projected $9B revenue run rate by year-end, 300,000 enterprise customers, and two of the deepest pockets in tech (Microsoft and Nvidia) behind it suggest the IPO groundwork is more than posturing. And with a private valuation expected to land between $300B–$350B, a listing would instantly create one of the world’s most valuable AI companies.It also sets up the defining capital-markets storyline of 2026: Anthropic vs. OpenAI.

What to Watch: Whether investors treat Anthropic’s eventual financials like a traditional SaaS business…or like an AI infrastructure arms dealer with margins that expand only when chip shortages ease. Also worth watching: which company is first in the IPO race. Whoever files first gets the spotlight — whoever files second gets the comps.
Source: ft.com

3. ADP Says Private Payrolls Shrank by 32,000 in November

The News: ADP reported that private employers cut 32,000 jobs in November — a sharp reversal from October’s revised +47,000 and the latest sign that hiring has been stuck in neutral. Small businesses, which employ nearly half of all U.S. workers, accounted for the bulk of the pullback. Hiring losses hit manufacturing, construction, and professional services. The only bright spots: education and healthcare, where demand remains strong.

Why It Matters: This is the kind of report that lands on the Fed’s desk with a yellow highlighter. A cooling labor market typically reinforces the case for rate cuts but the timing gets tricky when confidence is fragile and unemployment expectations are rising among consumers. It also reinforces a growing worry: smaller businesses are freezing or trimming headcount while larger firms keep hiring, suggesting the labor market is becoming increasingly uneven.

What to Watch: All eyes on Dec. 10, the Fed’s December meeting could turn sharply more dovish unless inflation refuses to cooperate.
Source: finance.yahoo.com

4. Congress Pushes Toward a Ban on Lawmaker Stock Trading

The News: A rare bipartisan uprising is brewing. More than 100 House members have signed onto a bill that would ban lawmakers from trading individual stocks, forcing them to divest or move assets into broad funds. Rep. Anna Paulina Luna (R-FL) just triggered a discharge petition, a procedural grenade that lets rank-and-file members yank a bill out of committee and force a floor vote if it hits 218 signatures. That would bypass leadership entirely and put Speaker Mike Johnson in a political vise. The move echoes last month’s revolt that forced House leadership to release Epstein documents, proving members will buck their own party when the issue is hot enough.

Why It Matters: Voters on both sides hate the idea of lawmakers trading stocks while privy to closed-door briefings and market-moving intel. Despite the 2012 STOCK Act, loopholes and lax enforcement have allowed trading to continue, with ADP noting over 9,000 trades by members in 2024 alone. The political calculation is shifting fast: Republicans and Democrats — from AOC to Chip Roy — now see “ban the trades” as a populist, election-ready message.

What to Watch: Whether Luna hits 218 signatures, forcing Johnson’s hand, If the Senate actually takes it up; only one Republican backed the committee version and How aggressively leadership tries to slow-walk (or bury) the bill. This is one of the few issues where Congress may actually do something voters overwhelmingly agree on, which is exactly why it could get messy.
Source: reuters.com

5. Complex ETFs Are Booming and So Are the Risks

The News: Leverage, inverse plays, single-stock ETFs, the “extreme ETF” aisle is exploding, and experts warn the current volatile backdrop could turn many of these products into portfolio landmines for retail investors. Leveraged ETFs look great when markets only go up — but in today’s choppy environment, they can badly underperform the assets they track. These funds rely on derivatives like swaps and options, which require constant rebalancing. When markets whipsaw, that rebalancing can eat returns alive. Two accelerants behind the boom: Retail appetite for “monster returns”, regardless of risk and an “arms race” among ETF issuers scrambling to stand out in a crowded market.

Why It Matters: When in doubt, look to Vanguard. Leveraged ETFs are not built for long-term holding but many investors treat them as such. In sideways markets, they can decay rapidly, leaving buyers blindsided even if they “guessed right” on direction. This matters even more now, with: Volatility rising, AI-driven intraday swings, and retail investors movements.

What to Watch: Whether regulators revisit disclosure rules for complex ETFs, rising headlines of retail investor losses, often what finally prompts reform and if ETF issuers keep escalating the “arms race” with even more exotic launches. If an ETF promises “astronomical returns,” it likely comes with black-hole risk.
Source: cnbc.com

1. U.K. Loosens Bank Capital Rules for the First Time Since the Financial Crisis

The News: The Bank of England made its biggest deregulatory move in over 15 years, lowering the core capital requirement for U.K. banks from 14% to 13% of risk-weighted assets. It’s the first such cut since the 2007–09 financial crisis and yet another sign that regulators on both sides of the Atlantic are prioritizing growth over guardrails. Major banks like HSBC and Barclays rallied on the announcement. The BOE says the shift, which takes full effect in 2027, should free banks to lend more, boost economic activity, and potentially return more cash to shareholders through dividends and buybacks.

Why It Matters: The U.K. economy desperately needs a spark. Britain has spent nearly two decades trying to claw its way out of post-crisis stagnation, all while its once-dominant financial sector has shrunk in global relevance. Easing capital rules is controversial, critics argue it chips away at crisis-era protections, but supporters note: British banks already hold ~17% capital on average, U.S. regulators are also easing leverage rules, Political pressure to “unshackle growth” has been building for years. In other words, this isn’t just a banking tweak, it’s part of a broader pivot toward pro-lending, pro-risk policymaking.

What to Watch: The BOE will review other constraints, including the leverage ratio and whether banks can actually use their “buffers” in downturns (most executives say they can’t). The Treasury is weighing changes to the ringfence rule that separates everyday banking from riskier investment activities, likely loosening but not scrapping it. Expect louder debate over whether regulators are being prudent… or forgetting 2008 ever happened.
Source: wsj.com

2. Developing-Country Debt Outflows Hit a 50-Year High

The News: Developing nations paid $741 billion more in debt service than they received in financing from 2022–2024, the worst gap in half a century, per the World Bank. Total external debt hit $8.9 trillion, and interest costs alone reached a record $415 billion. Bond markets reopened last year and countries restructured $90 billion in debt, but new financing came at punishing rates (~10%). Low-income countries are especially strained: in the most indebted nations, over half the population can’t afford a basic daily diet.

Why It Matters: High debt is choking budgets, pushing funds away from schools, clinics, and infrastructure. More governments are borrowing from local banks, which can leave fewer loans available for families and businesses, thus creating a downward spiral.

What to Watch: Whether 2026 rate cuts ease refinancing pressure, a potential new wave of restructurings because for many developing nations, this isn’t “debt distress,” it’s a debt drain, and the plug is nowhere in sight.
Source: worldbank.org

3. Bending Spoons Scoops Up Eventbrite for $500M

The News: Eventbrite, once valued at $1.76B during its 2018 IPO, is getting a second life under Bending Spoons, the Milan-based firm known for snapping up stalled-but-beloved tech brands like Evernote, Meetup, and Vimeo. The price tag: $500M, or just 1.7× trailing revenue, after two years of flat ~$325M sales. Shareholders still get an 81% premium, but the message is clear: the “great brand, stalled business” era is now a buyer’s market. Bending Spoons’ playbook is simple: cut costs, raise prices, ship features, and turn “venture zombies” into steady cash machines.

Why It Matters: Eventbrite’s sale is the latest sign that the market for “good product, bad business” tech companies is turning into a feeding frenzy. With venture dollars scarce, flat-growth SaaS firms are increasingly choosing a clean exit over uncertain turnarounds. Bending Spoons and its rivals are effectively becoming the new end-of-life home for venture era brands and their success in reviving them could reshape valuations across the entire software ecosystem.

What to Watch: Whether more consumer-facing names follow suit. If Bending Spoons quickly boosts margins at Eventbrite (as it did with Evernote), expect a wave of stalled unicorns to test the waters and potentially a reset in what “fair value” looks like for aging tech brands.
Source: techcrunch.com

Q: How does a vampire start a letter?

A: Tomb it may concern…

✅ Invest Better: Open a new brokerage account and complete qualifying activities to earn up to $1,000 in Stock.* Open your account now.
✅ Digital Detox: Plan 30 minutes away from screens this evening.
✅ WindowSwap: See a random window view from somewhere in the world.

*A message from our sponsor or affiliate link.

The act of estimating or inferring unknown values or trends based on known data.

“Economists often use past trends for extrapolation to predict future market behavior.”

Grit Capital: Get weekly deep dives on markets, stocks, and investing strategies used by 270K+ investors, hedge funds, billionaires, and advisors. Sign-up here.

Love reading Afternoon Finance?
Click here to share with your friends and family. ✈️