September 11, 2013 Update

DJIA:15,191 S&P 500:1,684 NASDAQ:3,729 Gold:$1,363 Oil:$107.53 EURO:$1.33 YEN:100.25

When Too Connected Became Antisocial

The rise of mobile personal computing devices have led to an ironic shift in the cultural norm of social behavior. People have become more intertwined with one another’s lives due to the combination of luxuries the internet and the smart phone provide. Social media has altered the perception of friendship, and what it means to be and have a friend. “Caring” and “supporting” one another has become as simple as “liking” something or sending a text. But the growth of the social cyberspace dynasty is responsible for more than just the surge of acquaintances, it has left the most peculiar externality on humanity. According to analysts, the average person looks at their mobile phone 150 times each day, which is once every six and a half minutes the average person is awake. And as more of the population become cell phones users, the addiction is bound to only get worse. According to commScore, in 2012 there was a 55% increase YoY in smart phone users to 98mm people, which represents 42% of all US mobile consumers. But how could a human being possibly be considered a more social animal when they spend every six and a half minutes staring at their screens? What is missing from human life that has caused people to become mentally addicted to their phones and forms of social networking? In 2011, mobile advertising and marketing grew 53.7% YoY to become a $3.4B industry, each segment growing 61% and 46%, respectively (MarketingProfs). But despite mobile advertising and marketing being one of the fastest growing industries, it appears that advertisers aren’t quite certain what people are searching for when they check their phones. A survey by Nielsen has concluded that ads sent via text or seen on mobile online displays are trusted significantly less by consumers than advertisements seen on TV. I think that because the TV has been around for decades, advertisers know why people watch it. And unlike ads sent through social networks or smart phones, commercials have become part of the experience of watching TV. In fact, commercials during the Super Bowl are sometimes more entertaining than the game itself, the equivalent does not yet exist for mobile devices. I believe that humans are social by nature, but at what point did interconnected turn antisocial? And when did it become okay to text, email, and read updates about “friends” while conversing in person with others? The World Bank has forecasted that soon there will be more cell phones than there are people. The global mobile ad market was $3.4B in 2010. Analysts forecast the sector to grow to $22B by 2016. I think that once people understand why they check their phones as often as do and why they feel inclined to become entangled in the social networking web is when mobile advertising will start to truly be effective. After all, there are more cell phones and Facebook accounts than there are toilets. 

Domestic News

• Market Update Futures are flat as investors remain worried about Syria. 
• Data on wholesale inventories will be released at 10:00, and are expected to rise 0.3% for July, up from June’s 0.2% decline. 

International Updates

Asia

• Market Update Markets traded up as Sydney edged towards a five-year high as a result of upbeat Chinese economic data.  
• A Chinese regulator has passed regulation that allows the iPhone to operate on China Mobile Ltd.’s (CHL) network. 

Europe

• Market Update Markets are struggling for direction after yesterday’s rally. 
• U.K. unemployment fell to 7.7% in May-July vs. 7.8% in February-April and 7.8% consensus.

Corporate

• Wal-Mart de Mexico (WMT) is selling Vips restaurant chain for $626M to Alsea. It only accounted for 1.7% of consolidated revenue and pulled in $473M in 2012.