Dementia Double-Trouble, Food-Cost Crunch, Cyber Risks and More News to Invest On
Let's dig into the headlines of the past week that speak to our Pro Portfolio's thematic strategies.
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Amid the earnings, incoming Trump administration and the political headlines, we've been scanning news reports and other information that speak to our Pro Portfolio investing themes. These include stories about the ageing population and dementia risks, cybersecurity spending, luxury buying and more.
Remember, if you have a signal story to share, post it in the comments section below.
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Ageing Population
A new study shows that the risk of developing dementia anytime after age 55 among Americans is 42%, more than double the risk reported by older studies. That dementia risk translates into an estimated half-million cases this year, rising to 1 million new cases a year by 2060, according to the new work. Read more here
Two-thirds of Japanese companies are experiencing a serious business impact from a shortage of workers, a Reuters survey showed on Thursday, as the country's population continues to shrink and age rapidly. Read more here
Cash-Strapped Consumer
As for some granular insight into the costs of filling the pantry, the BLS noted that “four of the six major grocery store food group indexes increased in December. The index for cereals and bakery products rose 1.2% over the month, after falling 1.1% November. The meats, poultry, fish, and eggs index increased 0.6% in December.” Eggs were the culprit here, as “index” tied to that staple rose 3.2% in the latest reading. Overall food prices are 2.5% higher than they were when measured against December 2023. Read more here
Position: Amazon AMZN, Costco COST
Cybersecurity, Data Privacy
The Justice Department and FBI today announced a multi-month law enforcement operation that, alongside international partners, deleted “PlugX” malware from thousands of infected computers worldwide. Read more here
Ironically, cybercriminals now use Google search advertisements to promote phishing sites that steal advertisers' credentials for the Google Ads platform. The attackers are running ads on Google Search impersonating Google Ads, showing as sponsored results that redirect potential victims to fake login pages hosted on Google Sites but looking like the official Google Ads homepage, where they are asked to log into their accounts. Read more here
Texas has sued insurance provider Allstate, alleging that the firm and its data broker subsidiary used data from apps like GasBuddy, Routely, and Life360 to quietly track drivers and adjust or cancel their policies. Read more here
The U.S. Treasury Department said a state-sponsored Chinese hacking operation was able to access third-party software to tap into desktop computers of Treasury employees in what the department is calling “a major incident." Read more here
Silk Typhoon Chinese state-backed hackers have reportedly breached a Treasury Department office that reviews foreign investments for national security risks. CNN reported on Friday, citing U.S. officials familiar with the matter, that the attackers gained access to the Committee on Foreign Investment in the United States (CFIUS) systems. Read more here
Over 4,000 abandoned but still active web backdoors were hijacked and their communication infrastructure sinkholed after researchers registered expired domains used for commanding them. Some of the live malware (web shells) was deployed on web servers of high-profile targets, including government and university systems, ready to execute commands from anyone who took control of the communication domains. Read more here
A huge data breach involving Gravy Analytics has appeared to expose precise location data for millions of users of popular smartphone apps like Candy Crush, Tinder, MyFitnessPal, and more. Here’s what you should know about the unfolding breach. Read more here
Position: Elastic ESTC, First Trust Nasdaq Cybersecurity ETF CIBR, Microsoft MSFT
Digital Infrastructure, Energy Pain Point
Global data center demand is expected to surge in 2025, despite supply and power constraints, according to a report from JLL. In 2025, an estimated 10GW is projected to break ground globally, with 7GW reaching completion. The global market will expand at a baseline of 15 percent CAGR through to 2027, potentially even reaching 20 percent. This comes despite the fact that rapid expansion is outstripping supply and that some markets have seen electricity development constraints. Read more here
Macquarie will invest up to $5 billion in data centers being built by artificial-intelligence infrastructure company Applied Digital, adding to the Australian bank’s substantial AI-related investments. Read more here
This Executive Order will direct the Department of Defense and the Department of Energy to lease federal sites where the private sector can build frontier AI infrastructure at speed and scale. These efforts are designed to accelerate the clean energy transition in a way that is responsible and respectful to local communities, and in a way that does not impose any new costs on American families. Read more here
Position: Eaton ETN, Marvell MRVL, Nvidia NVDA
Guilty Pleasure
Tolerance to alcohol does not change as we age, but we may feel alcohol’s impact more because of age-related brain changes. Read more here
China produced 2.4tn cigarettes in 2023, with the number having risen in each of the previous five years and gained more than 35 per cent compared with 2003, according to figures from the National Bureau of Statistics. Figures from Euromonitor show that the country’s share of global sales rose to about 47 per cent last year from less than 38 per cent in 2009, echoing the findings of other studies tracking tobacco in China. Read more here
Homebuilding & Materials
For those in Los Angeles, where the wildfires have killed at least 25 people and destroyed more than 12,300 structures, officials are beginning to discuss what may come next… Even without the current level of political infighting, the rebuilding process for communities affected by past wildfires has been yearslong and could indicate a long road ahead for those in Los Angeles. Read more here
Luxury Buying Boom
The world of luxury is expensive, rare, and highly sought-after, but it’s also undergoing a tumultuous shift. China and Europe will play less of a role in the global expansion of the luxury industry going forward, with the sector forecast to grow a paltry 1-3% between 2024 and 2027, new research suggests. Read more here
The Strategies Behind the Thematics Mentioned Above
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
Cash Strapped Consumer - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Cybersecurity - Companies that focus on protecting against the penetration of digital networks and the theft, ransom, corruption or destruction of data.
Data Privacy and Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
Digital Infrastructure and Connectivity - The buildout and upgrading of our networks, data storage facilities and equipment.
Digital Lifestyle - The companies behind our increasingly connected lives.
Digital Payments - This model focuses on companies benefitting from the accelerating structural adoption of digital payments and financial technology (FinTech).
Energy Pain Point - Companies poised to prosper from rising power demand.
Guilty Pleasure - Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Living the Life - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Safety and Security – Targeted exposure to companies that provide goods and services primarily to the defense and security sectors of the economy.
