Oh-so close.

🎉 Folks, we’ve just about made it: The S&P 500 is a hair from hitting a fresh all-time record and vying for its ninth consecutive week of gains.

There are just two more trading days left in 2023, and the S&P 500 will set a record if/when it closes above 4,796.56, a level we haven’t seen in nearly two years: Jan. 3, 2022.

💭 By the way, we still have three $50 Amazon gift cards to give away — just fill out our brief end-of-year reader survey to be entered.

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the three biggest stories in markets:

• Why Americans own more cars than ever but drive less

• Inside MicroStrategy’s big bitcoin bet

• The business of busing in America

All this, and more, in just 5 minutes to read.

CHART OF THE DAY

IN THE NEWS

🚗 We Own More Cars Than Ever. So Why Do We Drive Less?

Apparently, we’ve become a stay-at-home nation. We have more cars than ever, yet we’re driving less. 

The pandemic has changed how we live and travel. We’re not driving to work as much. We’re not driving to the stores as much, either, since you can buy virtually anything online from your couch. (OK, we feel exposed.)

In sum: The pandemic reduced our willingness to get behind the wheel, a trend many forecasters say will likely stay with us.

• The number of vehicles in operation jumped to 284 million this year from 278 million in 2019. People aren’t buying a second or third vehicle more than they used to — there are simply more households in the U.S. and thus more vehicles.
  

• The average number of vehicles per household has been about 2.2 since the turn of the century.
  

• Last year, the number of trips Americans took fell by more than 33%. (A trip is defined as anything from driving to the grocery store to a friend’s house or visiting a beach town for the weekend.)

A notable trend: Americans are eschewing passenger cars for bigger, more expensive pickup trucks, sport utility vehicles, and SUVs. 

Why it matters:

If we’re driving less, we’re visiting gas stations and brick-and-mortar stores less frequently. It’s another sign that the retailers that dominate the e-commerce side of things will have the greatest chance of long-term viability. 

Homebodies: Remote work has much to do with this trend, but it’s not everything. Americans are taking fewer trips for shopping, restaurant dining, and recreational/leisure trips. Call us all homebodies. 

• Economists say it’s unlikely that we’ll stop buying new cars, even if we use them less: Many families moved to the suburbs during the pandemic — or southern or western states, places more reliant on cars.
  

• Researchers expect new-car sales to stay at around 16 million vehicles annually for at least the next five years.
  

• One economist noted that the trend could spell further trouble for downtown areas: “What happens to cities? What happens to downtowns? All these things are so wrapped up together and have direct impacts on travel trends. It’s less about people’s driving habits.”

Read more

TOGETHER WITH EVERQUOTE

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🎲 MicroStrategy’s Bitcoin Bet Produces Over 300% Gain in 2024

Whether you love bitcoin or hate it, there’s one company that has staked its future on the digital asset unlike any other: MicroStrategy.

Founded nearly 35 years ago, the company carved out a niche in business intelligence software, coming into the spotlight in recent years thanks to its co-founder and former CEO, Michael Saylor, and his public bets on bitcoin.

Hodl: The company has accrued roughly 189,150 bitcoin, valued at over $8 billion, wielding the largest stockpile of the asset of any publicly-traded company. That’s nearly 1% of the 19.58 million bitcoin outstanding.

• In light of a spot bitcoin ETF in the U.S., some have invested in the company as a proxy for investing in bitcoin directly, with much of the fluctuation in MicroStrategy’s market capitalization attributable to bitcoin price changes.
  

• On that point, 2023 has been a good one — MicroStrategy’s stock is up about 330% as bitcoin has moved 150%+ higher year-to-date.

At an $8.5 billion market valuation, some 90% of MicroStrategy’s value is, for better or worse, tied to its bitcoin holdings. This comes after bitcoin prices dropped 64% in 2022, fueling skeptics’ concerns about holding bitcoin directly on corporate balance sheets.

Why it matters:

For bitcoin bulls, MicroStrategy’s adoption since July 2020 has paved the way for other companies to follow, providing a playbook for purchasing, storing, and accounting for the digital asset.

When it first started accumulating bitcoin, the company’s market capitalization was just $1.1 billion.

• Since then, MicroStrategy has been consistently reinvesting excess dollars into bitcoin and even borrowing funds to do so — a bet that has seemingly paid off very well, even with eye-popping volatility in bitcoin’s USD price.

The man who made it happen: Saylor, who has led the adoption, says, “All my best investments were in networks that everyone needed, no one could stop, and few understood. Bitcoin is the monetary network.”

• Saying further, “Bitcoin is digital gold – growing harder, smarter, faster, & stronger due to the relentless progression of technology.”

Will ETFs and other options making it easier to get bitcoin exposure hurt MicroStrategy? Maybe on the margins, but it’s a high-class problem.

While MicroStrategy may lose favor as a stock-market proxy for bitcoin, being a “bitcoin holding company,” as CNBC describes it, means more mainstream adoption of the digital asset would pay generous dividends.

• As the company’s VP of treasury and investor relations puts it, “(We’re) encouraged by the continuing maturity of the regulatory environment around bitcoin as well as the increased institutional demand that we’re seeing today…We do believe it’ll have a positive impact on the adoption of bitcoin by mainstream investors as well as corporations.”
  

• MicroStrategy’s appetite for bitcoin hasn’t faded, either. It announced that it had purchased another 16,130 bitcoin in November for nearly $600 million.

Read more

MORE HEADLINES

🙂 The 2024 economy could be shockingly…normal

🏆 CNN Business names Microsft’s Satya Nadella CEO of the year

💬 OpenAI investor predicts that AI will deflate the economy

🎤 Mariah Carey’s ‘All I Want for Christmas Is You’ shatters Spotify record

🚢 Shipping firm Maersk plans to resume Red Sea voyages following attacks from Yemen

✅ Many expect a spot bitcoin ETF to be approved in January

🚌 Why Bus Terminals Across America Are Closing

Earlier, we covered how people are driving less. They’re taking the bus less, too — partially out of necessity.

Roughly 60 million Americans rely on our country’s busing system to get around from city to city at an affordable price.

However, Greyhound and other private companies’ bus terminals are closing rapidly nationwide, including in Houston, Philadelphia, Cincinnati, Tampa, Louisville, Charlottesville, and Portland.

The latest sign of busing decline: Chicago’s bus terminal is on the market and could fetch for $30 million in the fast-developing West Loop area. 

• It’s part of a growing trend where one investment firm buys up Greyhound’s bus terminals — usually expensive real estate in a city center —then resells the property at a higher price for a profit.
  

• Greyhound, Trailways, Megabus, and other companies carry twice the number of people who take Amtrak annually. But they’ve shuttered many stations or moved them far from city centers to reduce high operating costs. Reduced government funding has also driven the trend.
  

• “All this happening at once is really startling,” said a DePaul professor and busing expert. “You’re taking mobility away from disproportionately low-income and mobility-challenged citizens who don’t have options.”

Long, slow decline: Unsurprisingly, ridership fell during the pandemic. Greyhound’s revenue cratered to $422.6 million in the fiscal year ended March 31, 2021—down about 62% since 2009.  

• Meanwhile, buses got little federal funding ($2 billion) during the pandemic compared to Amtrak ($4 billion) and airlines ($54 billion).
  

• Demand for buses spiked in the 1930s, 1940s, and 1950s, but the interstate highway system in the 1960s marked the start of a long, steady decline.
  

• Ridership dropped from 140 million passengers in 1960 to 40 million by 1990.
  

• There are a couple of bright spots for the bus-dependent: Greyhound just opened a 14,000-square-foot terminal in Atlanta this year.

Why it matters:

Most inter-city bus travelers have incomes under $40,000. They are disproportionately minorities and people with disabilities.

• Greyhound, the largest carrier, has been selling to Alden Global Capital, whose subsidiary has bought 33 stations for $140 million total.
  

• “It is clear what is happening here: an important piece of transit infrastructure is being sacrificed in the name of higher profits,” observed a Columbia professor of real estate.

Pointing fingers: Greyhound’s owner, German bus operator Flix, has asked cities to fund new terminals, but many local officials say it’s the company’s responsibility.  

• Many us terminals are worth much more as something else, such as apartments or entertainment areas.
  

• Greyhound alone makes 2,300 stops, the only carrier that goes coast to coast. But losing more hubs like Chicago’s “could wreak havoc on the entire bus network in the U.S. heartland,” added the professor.

Read more

QUICK POLL

Last Friday, we asked: Are you satisfied with your end-of-year bonus?

— One reminded us that not everyone gets their main bonus at year-end: “I live in Switzerland, and we (in the financial industry) receive the bonus in March/April.”

— Another said, “Very satisfied and grateful. The bonus isn’t necessary for my happiness, but it goes a long way this time of year.”

See you next time!

That's it for today on We Study Markets!

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