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Monday, October 7

Some of the largest macro moves in the market today include: USD/CNH -0.4%. US 2Y Treasury Bond -0.1%. US 10Y Treasury Bond -0.4%. Some of the largest moves among US mega-cap stocks include: Amazon.com Inc (AMZN) -1.4%. Exxon Mobil Corp (XOM) +0.8%. 

China's foreign exchange reserves increased by $28.1 billion to reach a near nine-year high of $3.316 trillion in September 2024, surpassing market expectations and marking the third consecutive month of growth. Relatedly, Chinese indices are rising further, based on stimulus hopes.

In Germany, factory orders experienced a significant decline of 5.8% month-over-month in August 2024, far exceeding forecasts for a smaller drop and representing the steepest fall since January due primarily to reduced demand within Europe despite some gains outside it.

Japan's leading economic index fell below projections at its lowest level since October 2020 as concerns about future economic conditions persist amid declining job offers and consumer sentiment indicators; this coincides with Japan’s finance minister expressing caution over currency fluctuations impacting businesses domestically.

USD/JPY (USD/JPY) [-0.4%]
The USD/JPY has retreated today after reaching its highest level since August 16, driven by fears of potential intervention from Japan's Finance Ministry. Comments from the Vice Finance Minister for International Affairs highlighted that the government is closely monitoring foreign exchange movements, which provided support to the Japanese Yen and contributed to the decline in the currency pair. Additionally, ongoing geopolitical tensions involving Israel and Iran are impacting market sentiment towards safe-haven assets like the yen. Concurrently, the USD/CNH has declined, reflecting broader market sentiment that may also influence the USD/JPY exchange rate.

iShares China Large-Cap ETF (FXI) [+2.2%, +103.5M]
Large Cap
On October 7, 2024, Goldman Sachs upgraded the Chinese market to overweight, coinciding with a pre-market increase of 2.44% for the iShares China Large-Cap ETF (FXI). The report highlighted sectors sensitive to policy changes, such as autos and internet/media, while outlining ten reasons for investing in Chinese equities. Social media discussions indicated that China is set to unveil key economic growth strategies and post-holiday stimulus measures, which have drawn attention to FXI and related ETFs. Additionally, China’s domestic markets are anticipated to focus on fiscal stimulus, with the CSI 300 blue-chip index having surged over 25% recently. Notably, FXI had already increased by 2% prior to these developments, reflecting positive sentiment around China's economic resilience. The movement in USD/CNH also contributed to FXI's performance.
—𝑆𝑜𝑢𝑟𝑐𝑒: 𝑀𝑎𝑟𝑘𝑒𝑡𝑅𝑒𝑎𝑑𝑒𝑟 𝐼𝑛𝑐 @ 𝑂𝑐𝑡. 7𝑡ℎ 8:50 𝐴𝑀

PFE | +2.5% | +4.2B
Pfizer Inc | Pharmaceuticals
Pfizer Inc. achieved a significant legal victory by invalidating two GSK patents related to a respiratory syncytial virus vaccine in a U.K. court, enhancing its position in the RSV vaccine development landscape. Concurrently, activist investor Starboard Value has acquired a $1 billion stake in Pfizer, advocating for strategic changes as the company grapples with declining demand for its COVID-19 vaccines and treatments. Starboard's involvement has prompted outreach to former Pfizer executives Ian Read and Frank D'Amelio for assistance in revitalizing the company. Following this announcement, Pfizer's shares increased during Sunday night trading, reflecting cautious optimism among social media discussions regarding the potential for change within the company. Pfizer's current market value is approximately $162 billion.

APD | +5.9% | +4.0B
Air Products and Chemicals Inc | Industrial Gases
Air Products and Chemicals Inc. has experienced a notable stock surge following the announcement that activist investor Mantle Ridge has acquired a stake exceeding $1 billion in the company. This investment, reported by the Wall Street Journal, positions Mantle Ridge to advocate for strategic enhancements, including CEO succession planning for Seifi Ghasemi. Since March, Mantle Ridge has been increasing its position, asserting that Air Products is undervalued relative to its peers. The company's market value stands at approximately $63 billion. The news has sparked significant activity on social media, with multiple posts highlighting Mantle Ridge's intentions for corporate governance changes at the industrial gas manufacturer.

BIDU |+2.5%|+7.9B
Baidu Inc | Interactive Media & Services
Baidu Inc (BIDU) has seen its stock price increase by 2.5% since Friday. Macquarie analyst Ellie Jiang has raised the price target for Baidu to HK$122.00 from HK$85.00, while maintaining a Neutral rating. This adjustment reflects a reassessment of the company's valuation amid its recent performance. Social media activity highlights a more bullish sentiment, suggesting that this could lead to significant upward movement for Baidu's stock price. Additionally, the Direxion Daily FTSE China Bull 3X Shares (YINN) surged, indicating a strong positive correlation with Baidu, which may provide context for its recent price change. Despite some downgrades from other analysts, the consensus remains moderately positive with twelve buy ratings and an average price target of $132.13.

NAPA | +101.5% | +1.6B
Duckhorn Portfolio Inc | Distillers & Vintners
Duckhorn Portfolio Inc has seen a remarkable price surge of over 100% following the announcement that Butterfly Equity will acquire the company for approximately $1.95 billion, equating to $11.10 per share in cash. This acquisition offer represents a significant premium over the stock's recent trading average. The transaction has received unanimous approval from Duckhorn's Board of Directors and is anticipated to close this winter, pending customary regulatory approvals. Concurrently, Duckhorn reported fourth-quarter earnings, with net sales of $107.4 million exceeding estimates, and an adjusted EPS of $0.14, surpassing expectations. Nonetheless, net income fell to $11.3 million from the previous year’s $17.8 million. Additionally, Duckhorn is set to release its earnings report after market hours on Monday, further fueling discussions on social media platforms.

CNQ | +1.7%| +1.3B
Canadian Natural Resources Ltd | Oil & Gas Exploration & Production
Canadian Natural Resources Ltd has announced the acquisition of Chevron Canada's 20% interest in the Athabasca Oil Sands Project and a 70% operated working interest in the Duvernay shale for $6.5 billion. This transaction, expected to close in the fourth quarter of 2024, will increase Canadian Natural's total working interest in the Athabasca Oil Sands Project to 90% and add approximately 62,500 barrels per day of synthetic crude oil production. The deal includes non-producing oil sands leases covering about 267,000 gross acres and is projected to contribute 122,500 barrels of oil equivalent per day in targeted production by 2025. Additionally, Canadian Natural has raised its quarterly dividend by 7% to $0.5625 per share, marking 25 consecutive years of dividend increases. Concurrently, CNQ has filed for buybacks, resulting in the cancellation of over four million shares, reflecting ongoing corporate actions aligned with shareholder returns.

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