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Thursday, December 18

Noteworthy macro moves today: Bitcoin +3.2%. Ethereum +4.7%. US 2Y Treasury Bond +0.1%. Noteworthy US mega-cap moves today: Broadcom Inc (AVGO) +2.5%. Amazon.com Inc (AMZN) +1.6%. 

Global equity markets are trading higher as investors react to the latest U.S. inflation data, which showed a lower-than-expected annual inflation rate of 2.7% for December, down from forecasts of 3.1%. This decline in inflation has led to increased optimism regarding potential interest rate cuts by the Federal Reserve, with market expectations now pricing in a likelihood of easing monetary policy in the coming year.

In Europe, the Bank of England (BoE) cut its key interest rate by 25 basis points to a near three-year low of 3.75%, reflecting concerns over stagnant economic growth and easing inflation pressures. The decision was closely watched as it indicates a shift in monetary policy amid mixed signals about future economic conditions, leading to cautious sentiment among traders regarding further cuts.

Additionally, the European Central Bank (ECB) maintained its interest rates during its latest meeting, aligning with market expectations while projecting stable inflation around its target level. The ECB's decision reflects ongoing confidence in domestic demand driving economic growth despite external uncertainties, contributing to a generally positive tone across European equity indices today.

VanEck Semiconductor ETF (SMH) [+3.1%]
Micron Technology shares surged significantly after reporting record first-quarter results, driven by strong demand for AI-related memory. This positive performance is expected to influence the semiconductor sector and the VanEck Semiconductor ETF (SMH). Recent macroeconomic data revealed that the U.S. Consumer Price Index (CPI) showed a year-over-year increase of 2.7%, below expectations, indicating moderating inflation. The Core Inflation Rate also came in at 2.6%, lower than anticipated, marking the lowest level since March 2021. Among the ETF's holdings, Micron was a top contributor, followed by NVIDIA, Broadcom, Lam Research Corp, and Applied Materials, all reflecting strong performances amid favorable market conditions.

Ethereum (ETH/USD) [+4.6%]
Ethereum (ETH/USD) has experienced an increase of 4.6% since Wednesday. The recent launch of SoFiUSD, a stablecoin from SoFi Technologies, is anticipated to enhance financial infrastructure for banks and fintechs. U.S. Consumer Price Index data showed an annual increase of 2.7%, below expectations, suggesting moderating inflation that could influence Federal Reserve policy on interest rates. Additionally, Toobit's upgrade allowing 200x leverage for ETHUSDT Perpetual Contracts reflects growing demand in decentralized finance markets. Notably, more ETH is currently held off exchanges than at any point in the last nine years, indicating reduced supply availability for spot selling. Concurrently, Bitcoin (BTC/USD) has increased by 2.35%, reflecting broader market sentiment that often influences Ethereum's price movements.

MU | +13.8% | +39.2B
Micron Technology Inc | Semiconductors
Micron Technology, Inc. reported its first-quarter fiscal 2026 results, with revenues reaching $13.64 billion, a substantial increase from $8.71 billion the previous year. The adjusted net income was $5.48 billion, leading to an adjusted EPS of $4.78, exceeding expectations of $3.95. For the second quarter, Micron anticipates revenues between $18.3 billion and $19.1 billion, significantly above the estimated $14.38 billion. Analysts have responded positively, with Robert W. Baird setting a new price target at $443, while Rosenblatt and Cantor raised theirs to $500 and $350, respectively. Social media discussions highlighted the strong performance, noting an impressive gross margin of 68% and the continued tight conditions in the memory market, which are expected to persist beyond 2026.

INSM | -15.7% | -4.3B
Insmed Inc | Biotechnology
Insmed Inc announced the discontinuation of its Phase 2b BiRCh study of brensocatib for chronic rhinosinusitis without nasal polyps, as the trial failed to meet both primary and secondary efficacy endpoints. This study, which involved 288 patients, demonstrated no significant improvement compared to placebo. Following this setback, Insmed has halted its development program for this indication. Concurrently, the company has acquired INS1148, a monoclonal antibody aimed at treating respiratory and immunological conditions, with plans to initiate Phase 2 studies in interstitial lung disease and asthma. These announcements led to a notable decline in Insmed's stock price during after-hours trading. Social media discussions reflected disappointment over the trial results while highlighting the strategic shift towards INS1148 as a potential avenue for future growth.

COIN | +4.1% | +2.5B
Coinbase Global Inc | Financial Exchanges & Data
Coinbase Global Inc has launched a new AI tool, Coinbase Advisor, designed to assist users in managing their financial lives. The company is also expanding its services to include stock trading and prediction markets through a partnership with Kalshi, allowing users to trade stocks and event contracts linked to real-world outcomes. This initiative aligns with Coinbase's strategy to evolve into an "everything app," integrating traditional assets and derivatives alongside cryptocurrencies. The platform now offers a simplified trading experience for managing both crypto and equity portfolios. Additionally, JPMorgan has migrated its JPM Coin to Coinbase's Base L2 blockchain to facilitate institutional payments and collateral settlements. In the pre-market session, Coinbase shares have risen significantly, coinciding with an increase in Bitcoin's price, which has moved upward, reflecting broader market sentiment towards cryptocurrencies.

LULU | +7.3% | +2.0B
Lululemon Athletica Inc | Apparel, Accessories & Luxury Goods
Elliott Investment Management has significantly increased its stake in Lululemon Athletica Inc, accumulating over $1 billion. This development, reported approximately 12 hours ago, coincided with a notable rise in Lululemon's stock, which closed 4% higher in after-hours trading and showed a premarket increase of nearly 7%. Elliott is also advocating for Jane Nielsen, a former Ralph Lauren executive, as a potential CEO candidate to enhance the company's performance. Additionally, Lululemon plans to expand its international presence in 2026 by entering six new markets, including Greece, Austria, Poland, Hungary, Romania, and India, through franchise partnerships. These strategic moves have generated considerable discussion on social media, highlighting the significance of Elliott's investment and the anticipated leadership change.

WDC | +5.5% | +3.1B
Western Digital Corp | Technology Hardware, Storage & Peripherals
Western Digital Corp's stock has risen significantly, attributed to positive developments in the semiconductor sector. The increase began with a notable rise following Micron Technology's Q1 earnings report, which exceeded expectations. Western Digital's stock saw a subsequent uptick as market reactions favored this news. Additionally, a report highlighted Western Digital's movement alongside Sandisk's performance, further reflecting the favorable market response to Micron's results. Micron Technology's stock surged sharply after announcing strong financial results for the first quarter of fiscal 2026, including adjusted earnings per share that surpassed estimates and an optimistic outlook for the second quarter. This momentum from Micron is likely contributing to Western Digital's price movement, given their historical correlation.

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