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Monday, December 16

Noteworthy US mega-cap moves today: Broadcom Inc (AVGO) +3.5%.

Recent economic data releases have highlighted mixed signals from major economies, particularly in Europe. The German Services PMI unexpectedly rose to 51 in December, indicating a return to growth despite broader challenges such as declining new business activity and employment concerns within the services sector. Conversely, Germany's Manufacturing PMI fell deeper into contraction at 42.5, reflecting ongoing struggles with output and orders.

In anticipation of upcoming central bank meetings this week—including the Federal Reserve—market participants are closely monitoring interest rate expectations amid fluctuating inflation indicators across regions. Analysts expect a likely cut by the Fed on Wednesday while also considering potential adjustments from other banks like the Bank of England and Bank of Japan later this week.

Political developments further complicate market dynamics; notably, uncertainty surrounding Germany’s government stability could significantly impact investor sentiment if Chancellor Olaf Scholz faces a vote of no confidence today that may lead to snap elections early next year. This political backdrop adds another layer for investors navigating through current macroeconomic conditions marked by cautious optimism amidst persistent risks.

iShares China Large-Cap ETF (FXI) [-1.1%]
The iShares China Large-Cap ETF (FXI) has experienced a decline of 1.1% since Friday. Recent data from China reveals retail sales growth of only 3% year-on-year for November, falling short of the anticipated 4.6%. This marks a slowdown from October's 4.8% growth. Additionally, fixed asset investment year-over-year for November was reported at 3.3%, below the expected 3.5%. Industrial production met expectations with a 5.4% increase, while the unemployment rate remained steady at 5.0%. Social media discussions noted increasing pressure on Beijing to stimulate domestic demand, alongside Moody's raising China's GDP growth forecast for 2025 to 4.2%. Significant movements among FXI's holdings included declines in several key stocks, with the move in USD/CNH contributing negatively to the ETF's performance. The AUD/USD currency pair also saw a slight decline, reflecting broader market sentiment that may be influencing FXI's recent performance.
—𝑆𝑜𝑢𝑟𝑐𝑒: 𝑀𝑎𝑟𝑘𝑒𝑡𝑅𝑒𝑎𝑑𝑒𝑟 𝐼𝑛𝑐 @ 𝐷𝑒𝑐. 16𝑡ℎ 8:10 𝐴𝑀

Utilities Select Sector SPDR Fund (XLU) [+0.8%]
The Utilities Select Sector SPDR Fund (XLU) experienced an increase of 0.84% today. This movement coincides with the announcement of a $25.8 million project finance facility secured by SolarBank for battery energy storage systems in Ontario, which supports renewable infrastructure development. Such initiatives align with clean energy goals that benefit utility sectors represented in XLU's portfolio. Among the fund's holdings, significant contributors included Southern Company, Duke Energy, Dominion Energy, Exelon Corporation, and NextEra Energy, each showing positive returns that supported the overall performance of the ETF.

GOOGL | +1.3% | +31.6B
Alphabet Inc | Interactive Media & Services
Alphabet Inc is experiencing upward movement, paralleling significant gains in the Interactive Media & Services sub-sector. CEO Sundar Pichai recently identified Tesla as a key competitor to its autonomous driving unit, Waymo, which plans to expand its services to ten U.S. cities by next year. Currently, Waymo operates in Phoenix, San Francisco, and Los Angeles, with intentions to introduce services in Miami by 2026. Additionally, social media discussions have centered on Alphabet's advancements in quantum computing, particularly regarding the Willow quantum chip. Concerns were raised about the implications for current encryption standards, with suggestions for transitioning to quantum encryption. Furthermore, some users expressed that Alphabet is undervalued post-Willow release, predicting a price target of 200.

HON | +3.1% | +4.7B
Honeywell International Inc | Industrial Conglomerates
Honeywell International Inc. has announced that its Board of Directors is conducting a comprehensive evaluation of its business portfolio, which may include the separation of its Aerospace division. This strategic review, initiated by Chairman and CEO Vimal Kapur, aims to unlock shareholder value, with updates expected during the fourth quarter 2024 earnings release. The company is aligning its operations with three megatrends: Automation, the Future of Aviation, and Energy Transition. Elliott Investment Management has expressed support for Honeywell's strategic direction. Concurrently, social media discussions highlight Honeywell's plans to explore strategic alternatives and transformational portfolio actions, with a specific focus on the Aerospace unit. Additionally, there was mention of a failed breakout in Honeywell's price movement recently, suggesting some traders are weighing technical performance against the backdrop of these strategic developments. In pre-market trading, shares of Honeywell have shown positive movement.

MU | +3.4% | +3.9B
Micron Technology Inc | Semiconductors
Micron Technology Inc. is set to announce its Q1 FY25 financial results on December 18, 2024, with analysts projecting a significant revenue growth of 84% and earnings of $1.76 per share. Citi has reiterated a Buy rating, maintaining a price target of $150. Social media discussions have noted the upcoming earnings report as part of a busy week that includes major economic indicators, including the Fed's rate decision. Additionally, a substantial investment exceeding $6.1 billion from the White House for advanced memory chip facilities in New York and Idaho has been highlighted, which may influence future performance. Meanwhile, Marvell Technology Inc. has seen an increase, potentially reflecting broader market sentiment that could also impact Micron.

AVGO | +3.0% | +3.2B
Broadcom Inc | Semiconductors
Broadcom Inc is approaching a market capitalization of $1 trillion, a milestone achieved by only a few companies. The stock received an upgrade to "outperform" from CiCC, with a price target of $220, reflecting positive sentiment among analysts. Recently, Broadcom experienced a significant price increase, marking its largest single-day gain in history, attributed to a strong quarterly earnings report. The company reported a 51% year-over-year revenue increase, totaling $14.05 billion, and noted a remarkable 220% surge in artificial intelligence revenue. CEO Hock Tan emphasized the growth driven by increased AI XPU shipments to major hyperscale customers. Broadcom's strategic focus on custom AI accelerators and ASICs is projected to generate substantial revenue over the coming years. Additionally, Marvell Technology Inc has moved positively, suggesting a correlation with Broadcom's recent performance.

UBER | +2.1% | +2.7B
Uber Technologies Inc | Passenger Ground Transportation
Uber Technologies Inc has experienced notable attention on social media recently. Jefferies has reaffirmed a "Buy" rating for the stock, setting a price target of 100, citing the significance of partnerships in autonomous vehicles for enhancing rideshare scalability. Discussions have emerged regarding Uber's substantial stake in Aurora, which may influence its competitive stance. The company has faced a drop exceeding 30% due to concerns surrounding robotaxis, yet analysts maintain that Uber's strong market position makes it a vital partner for autonomous vehicle suppliers. Deutsche Bank forecasts that robotaxi revenues could reach 43 billion by 2035, with Uber's revenue expectations projected to be significantly higher. Additionally, Uber has reached its most oversold level since the onset of COVID-19, while challenges from competitors like GM Cruise, Waymo, and Tesla have been highlighted. The fair value of Uber is estimated at 105.5 per share, suggesting a potential undervaluation of approximately 45%.

BMY | +1.1% | +1.2B
Bristol-Myers Squibb Co | Pharmaceuticals
Bristol-Myers Squibb Co has filed an automatic mixed securities shelf, enabling the potential offering of various securities, including debt and equity instruments. The size of this offering remains undisclosed. This filing, made two days ago, aligns with the company's strategy to raise funds for general corporate purposes. Additionally, a preliminary prospectus was submitted late Friday, detailing similar intentions without specifying offering sizes. On social media, a post emerged yesterday suggesting that a recent deal should not be considered successful, linking to an article discussing access issues related to a website; however, the article lacks specific information relevant to the company’s performance. Furthermore, Bristol-Myers Squibb has announced a dividend increase to $0.62, reflecting a rise from last year's payment, supported by healthy free cash flows despite the absence of profit generation. Analysts anticipate growth in earnings per share over the next year, although concerns about future dividend sustainability persist.

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