By Alan Murray and Tom Huddleston Jr.
January 3, 2018

Good morning.

U.S. stock markets reached new highs yesterday, with big tech driving the NASDAQ composite over 7,000 for the first time ever. You may have thought last year’s soaring FANG valuations (Facebook +53%, Amazon +56%, Netflix +55%, and Google +33%) meant they were headed for an inevitable fall in 2018. But Mr. Market disagrees.

Netflix saw the biggest rise yesterday—up 4.7%—fueled partly by an analyst report saying it was “far ahead of peers” in building subscription video services, and also by unsubstantiated rumors that it could be bought by Apple, which could use it’s stash of overseas earnings that have been liberated by the new tax bill. Chipmakers also had a big day, with Advanced Micro Devices up 6.8%, Micron Technology up 6.2%, and Nvidia up 3%.

The markets seem to believe the FANG companies will continue their march toward world domination. Amazon, in particular, seems unstoppable. The company said in a press release yesterday that it shipped over 5 billion items from its Prime membership service to subscribers in 2017. One analyst predicted Amazon would buy Target Corp. this year—following its purchase of Whole Foods last year.

Meanwhile, betting markets are saying Atlanta and Austin lead the odds of becoming Amazon’s new, second headquarters—an honor that could bring as many as 50,000 high paying jobs with it.

Separately, I noted yesterday that the putatively strong economy had an impressive number of black swans circling it. Ian Bremmer did a nice job highlighting the top ten foreign-policy-related risks in this post for TIME.

More news below.

Alan Murray


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