CE 100 Gains 3.1% as Tencent Leads Payment Names Higher

Connected economy names surged as investors cheered signs of resilient consumer spending.

To that end, the CE 100 Index outpaced the broader markets, gaining 3.1% on the week.

The Fed played some part here, too, as comments from Chairman Jerome Powell signaled that future rate increases may be on the order of about 50 basis points, which some observers took to mean that inflation may be peaking.

Data from the first few days of the “official” holiday shopping season indicate that shoppers are returning in force to the aisles and online. As noted last week, during the five days from Thanksgiving Day through Cyber Monday, 196.7 million Americans shopped in stores and online, per data from the National Retail Federation (NRF) and Prosper Insights & Analytics. That’s 9% higher than last year and the highest reading since the beginning of the report five years ago.

Payments Names Surge

It might not be surprising, then, that the Pay and Be Paid pillar surged 5.42%. We’ve noted that the shopping season also showed a new bias for more point-of-sale (POS) credit and financing and increased reliance on digital channels than ever before. Affirm surged 11.8% through the week.

Also within that segment, Tencent was up 28%, as China appeared to be loosening at least some of its COVID-19 restrictions. The company also said that through Tencent Financial Technology (its FinTech operation), it has launched Tenpay Global, a new brand for its cross-border payment business. The brand consolidates a suite of business and consumer cross-border payment products, the company said.

FIS gathered 12.3% on the week, as reports just before the holiday weekend said the company plans to cut “several thousand” staffers and contractors from a workforce that numbered about 65,000 at the end of last year. The move is part of a bid to cut operating expenses by $500 million annually.

Pinduoduo gained 31%, having posted earnings that showed that in the quarter that ended in September, revenue jumped 65% to about $5 billion. Demand was high for categories such as consumer electronics, management said.

These gains were offset at least somewhat by losses in CrowdStrike, which gave up 11.5% on the week. The company reported earnings earlier in the week that showed annual recurring revenue (ARR) of $2.34 billion, up 54% from a year ago.

But as CEO George Kurtz said on the conference call with analysts, deals are taking longer to close. He said, with a nod to macro conditions, “net new ARR [came in] below our expectation…” adding that “organizations were starting to respond to macroeconomic conditions by adding extra layers of required approvals and extending the time it took to close some deals. As Q3 progressed and fears of a recession grew, this dynamic became more pronounced.”