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Tuesday, December 31

Noteworthy macro moves today: Bitcoin +3.0%. USD/CNH +0.3%. Copper -1.5%.

On December 31, 2024, the global markets are experiencing notable volatility as U.S. stock indices have declined significantly in recent sessions due to a combination of weak economic data and rising Treasury yields. The S&P 500 fell by over 1% on Monday amid concerns about slowing growth indicated by the Chicago PMI dropping to its lowest level since early this year at just above contraction territory (36.9). This decline follows an overall strong performance for equities throughout much of the year but highlights increasing caution among investors.

In China, mixed signals from key manufacturing indicators contributed further uncertainty; while China's official Manufacturing PMI eased slightly to 50.1—indicating stagnation—the Non-Manufacturing PMI rose sharply to a nine-month high at 52.2, suggesting resilience in services despite challenges faced within manufacturing sectors amidst ongoing geopolitical tensions and trade risks with major economies like the United States.

Additionally, market participants are closely monitoring developments surrounding Federal Reserve policy adjustments anticipated for next year under President-elect Donald Trump's administration that may influence interest rates more cautiously than previously expected—a sentiment reflected in current trading patterns where many currencies weakened against a stronger US dollar index hovering around levels not seen recently during periods of heightened risk aversion across financial assets globally.

ProShares Ultra Bloomberg Natural Gas (BOIL) [-4.7%]
ProShares Ultra Bloomberg Natural Gas (BOIL) experienced a significant price drop of 4.5% in pre-market trading on Tuesday. This decline coincided with a fall in natural gas prices, which decreased by over 4% to approximately 3.77. The broader U.S. markets also closed lower, with major indexes down more than half a percent amid light holiday trading. The downturn in natural gas prices occurred alongside a drop in the Chicago PMI to 36.9, which fell short of expectations. This negative sentiment permeated all 11 S&P 500 sectors, particularly impacting materials and consumer discretionary sectors, contributing to a cautious market environment that may have further pressured natural gas assets.

Bitcoin (BTC/USD) [+3.3%]
Bitcoin has increased, currently priced at $94,101. This rise coincides with a notable event where Bitget executed its first burn of 800 million BGB tokens, reducing the total supply by 40%. In contrast, CleanSpark withdrew 3,158 BTC from Coinbase Prime, raising its total holdings to 9,907 BTC. Social media discussions highlighted a potential downtrend for Bitcoin, referencing a "shooting star" pattern, and speculating on a price drop back to $73.76. MicroStrategy purchased an additional 2,138 BTC for $209 million, funded by selling shares, bringing its total holdings to 446,400 BTC. Additionally, BTC holdings at OKX decreased by nearly 9,000 to 130,936. A whale deposited 778 BTC into Kraken, while significant outflows from Bitcoin ETFs totaled $415.1 million. Meanwhile, XRP trading volumes surged on South Korean exchanges, surpassing Bitcoin's activity.

TSLA | +1.7% | +22.4B
Tesla Inc | Automobile Manufacturers
Tesla Inc. has commenced trial production at its Shanghai megafactory, dedicated to energy storage products, marking its first such facility outside the U.S. Mass production is expected to begin in the first quarter of 2025. The construction of this site took just seven months, starting in May 2024. Each produced megapack can store over 3.9 Megawatt-hours of energy, sufficient to power approximately 3,600 homes for one hour. For the quarter ending September, Tesla's energy generation and storage revenue reached $2,376 million, reflecting a significant year-over-year increase alongside a record gross margin. Recent social media discussions noted that Tesla sold 18,600 cars in China during the week ending December 29, contributing to a total of 196,000 deliveries for the fourth quarter. Consensus estimates for Q4 deliveries are just over 500,000, with UBS forecasting 510,000 deliveries. Additionally, reports indicate that Tesla is sold out in China for 2024.

MRK | +1.0% | +2.6B
Merck & Co Inc | Pharmaceuticals
Merck & Co., Inc. has seen its total revenues increase, driven by strong performance in oncology and a notable rise in its Animal Health segment. The company is navigating a challenging pharmaceutical landscape characterized by patent expirations and a significant growth gap. In a strategic move, Merck has partnered with Hansoh to develop an oral GLP-1 receptor agonist, entering a competitive market. Additionally, regulatory changes stemming from the Inflation Reduction Act and a shift towards innovation and strategic acquisitions are pivotal for the company's future growth prospects.

APD | +1.2% | +787.5M
Air Products and Chemicals Inc | Industrial Gases
Air Products and Chemicals, Inc. has declared a quarterly dividend of 1.77 per share, translating to an annualized dividend of 7.08 and a yield of 2.45%. The company has maintained a robust commitment to increasing dividends, averaging a 9.3% annual increase over the past three years, and has achieved 49 consecutive years of annual raises. Analysts anticipate earnings of 14.16 per share for the upcoming year, suggesting a future payout ratio of approximately 50%. The firm continues to serve a diverse range of global industries with its extensive portfolio of gases and related services.

YUM | +1.1% | +430.1M
Yum! Brands Inc | Restaurants
Yum! Brands Inc has received an upgrade from Argus, moving from a "hold" to a "buy" rating. This upgrade was published approximately 23 hours and 54 minutes ago. The change in recommendation may reflect a more favorable outlook on the company's performance or potential growth prospects. In pre-market trading, Yum! Brands Inc's stock has increased by 1.2% since Monday.

VRSN | +2.0% | +412.4M
Verisign Inc | Internet Services & Infrastructure
Verisign Inc's shares increased in premarket trading, marking the potential for an eighth consecutive day of gains. This follows an SEC filing revealing that Berkshire Hathaway acquired approximately 76,487 shares of Verisign for around $15.6 million between December 26 and December 30. With this acquisition, Berkshire Hathaway now holds roughly 13.8% of Verisign's shares, totaling approximately 13,269,836 shares valued at over $2.72 billion. Additionally, a social media post highlighted Warren Buffett's investment strategy, noting his decision to invest cash reserves into an underperforming S&P 500 stock.

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