Coastal GDP Showdown: West vs. East

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Hello and happy Sunday! Today, we’re diving into the latest market movers and industry shake-ups that defined 2024 and set the stage for 2025. Here’s what’s brewing:

• West Coast wins: California’s economy powers ahead, outshining the East Coast in GDP per capita.

• BYD overtakes Tesla: The Chinese EV giant takes the crown as the world’s top electric car producer.

• Nvidia carries the S&P 500: A 171% surge makes Nvidia the biggest driver of market gains this year.

• Starbucks labor strikes: Baristas walk out as the coffee giant faces rising costs and falling sales.

• ETFs on fire: Record inflows push ETF assets to $10.6 trillion, cementing their place in modern investing.

West Coast Outshines East in GDP Battle

The East Coast may have more people — about a third of all Americans live there — but when it comes to economic output, the West Coast is pulling ahead. 🌴🏙️💰

In 2023, the East Coast boasted a $9 trillion GDP, accounting for a third of the U.S. economy. However, the West Coast’s GDP per capita hit $98,000, far surpassing the East Coast’s $84,000.

California alone is an economic juggernaut, closing in on a $4 trillion GDP. If it were a country, it would soon surpass India to become the world’s fifth-largest economy. No surprise there — four of the world’s seven trillion-dollar companies call California home.

China’s BYD Overtakes Tesla as Global EV King

Tesla’s reign as the world’s largest electric vehicle (EV) producer is over. 🥲 BYD, the Chinese automaker, edged out Tesla in 2024, producing 1,777,965 EVs — just 4,500 more than Tesla’s 1,774,442.

BYD’s victory wasn’t a one-off. After surpassing Tesla in Q4 2023, BYD slipped behind for a bit but roared back to outproduce Tesla by nearly 150,000 vehicles in Q4 2024.

A few years ago, BYD was barely known outside of China. Now, the company — originally rooted in electronics manufacturing — has rapidly scaled its EV production, cementing itself as China’s top car brand and a global leader.

BYD’s shift from gas-powered to electric vehicles has been lightning fast, rivaling Tesla’s meteoric rise. And as BYD continues its international expansion, Tesla finally has some serious competition.

Nvidia’s 171% Surge Carried the S&P 500 in 2024

The S&P 500 had a stellar 2024, and Nvidia deserves most of the credit.👏 👑The chipmaker’s 171% stock surge powered the index’s AI-fueled rally, contributing over 22% of the total return — far outpacing other tech giants like Apple and Amazon.

With Nvidia, Apple, and Microsoft each valued at over $3 trillion, their performance heavily sways the S&P 500, given its market-cap-weighted structure. Even Apple’s relatively modest 31% gain was enough to make it the second-largest contributor to the index, accounting for 7.4% of the overall return.

Meanwhile, Intel, Adobe, and Boeing dragged the index down, with Intel’s 60% drop leading the losses. But their combined negative impact barely shaved off 0.83 percentage points from the index, showcasing how mega-cap wins can overshadow broader struggles.

At the end of the day, AI excitement, fueled by Nvidia, carried the market to new heights — proving once again that a few big players can drive the entire game.

Starbucks Workers Walk Out as CEO Faces Pressure to Deliver

Starbucks ended the year with more than 300 stores on strike as workers continued to push for better contracts. On Christmas Eve, 5,000 baristas walked out in what the union, Workers United, said would be the fifth and final strike of the year.

The labor action, which started at just 10 locations in December, has grown but still affects less than 2% of Starbucks’ 18,400 US stores. While that might not sound massive, even small disruptions can spook investors, especially in a year when Starbucks missed sales targets and faced rising costs.

The company brought in new CEO Brian Niccol from Chipotle in 2024, briefly boosting Starbucks’ market value by $20 billion. ☕️💰 But with sales still sliding and bean prices climbing, Starbucks has given back half those gains.

ETFs Are Having Their Moment – $10.6 Trillion and Counting

While stocks like Nvidia and Tesla grabbed headlines in 2024, ETFs (exchange-traded funds) quietly smashed records. By November, investors funneled over $1 trillion into US ETFs, pushing total assets to a staggering $10.6 trillion – a 30% jump from 2023 and five times what it was a decade ago.

Sure, a booming stock market helped. The S&P 500 hit 57 record highs, 🧗‍♀️🏔️ gaining 25%, while the Nasdaq soared 30%. But ETFs’ rise is about more than just market gains — it reflects a broader shift from active to passive investing. Instead of paying pricey fund managers, more investors are opting for low-cost, rule-based funds that track indexes like the S&P 500.

Even as quirky and actively managed ETFs grow in popularity, the biggest winners remain simple: S&P 500 trackers. In November alone, 97% of ETF inflows went to US stocks, with large-cap ETFs leading the way. Also climbing? A bitcoin-focused fund and Invesco’s QQQ ETF, which mirrors the Nasdaq 100.

ETFs aren’t just a trend – they’re becoming the backbone of modern investing.