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Monday, December 23

Noteworthy macro moves today: US Dollar Index +0.3%. Noteworthy US mega-cap moves today: Eli Lilly and Co (LLY) +1.7%. JPMorgan Chase & Co (JPM) -0.6%.

Recent economic data releases have highlighted mixed signals regarding growth in major economies. In Canada, the GDP is expected to contract by 0.1% for November due to declines in key sectors such as mining and transportation, despite a prior expansion of 0.3% in October that was revised higher from initial estimates. Meanwhile, U.S. consumer confidence is anticipated to rise based on recent trends indicating improved sentiment.

In financial markets, there has been notable volatility following softer-than-expected inflation readings from the U.S., which rekindled expectations for potential Federal Reserve rate cuts next year; this led to significant gains across equity indices last Friday with all major indexes closing positively after weeks of losses driven by hawkish monetary policy concerns. The S&P 500 surged over 1%, reflecting renewed risk appetite among investors amid easing inflation fears.

Additionally, geopolitical tensions are influencing energy prices and market dynamics globally; Slovak Prime Minister Fico reported discussions with Putin about continued gas supplies while Qatar's threats against LNG exports add uncertainty ahead of winter demand spikes in Europe. These developments contribute further complexity as traders navigate through holiday-thinned liquidity conditions leading into Christmas week trading sessions.

Financial Select Sector SPDR Fund (XLF) [-0.7%]
Financials
The Financial Select Sector SPDR Fund (XLF) has experienced a decline of 0.6% since the previous close. Recent macroeconomic developments reveal that the Federal Reserve is adopting a cautious stance on future interest rate cuts, following lower-than-expected inflation data from the Personal Consumption Expenditures Price Index, which reported an annual increase of 2.8%. This backdrop of geopolitical tensions and economic uncertainties may be influencing market sentiment towards financial stocks. Among the ETF's holdings, notable contributors to its performance included MMC, MA, JPM, CME, and V, all of which posted negative returns. Additionally, the Dow Jones Index has decreased slightly, which may also reflect broader market sentiment affecting XLF.

Industrial Select Sector SPDR Fund (XLI) [-1.3%]
Industrials
The Industrial Select Sector SPDR Fund (XLI) has experienced a decline of 1.3% since Friday. Significant movements among its holdings include Honeywell (HON), which dropped and contributed negatively to the fund's performance. CSX also saw a decline, along with Raytheon Technologies (RTX), Caterpillar (CAT), and Deere & Company (DE), all of which similarly contributed to the downward trend. Each of these companies registered negative returns, impacting the overall performance of the ETF.

HMC | +13.9% | +18.2B
Honda Motor Co Ltd | Automobile Manufacturers
Honda Motor Co., Ltd. and Nissan Motor Co., Ltd. have confirmed plans for a potential merger, initiating discussions towards business integration. Both companies aim to establish a joint holding company, which will be listed on the Tokyo Stock Exchange by August 2026, with plans for delisting Nissan and Honda thereafter. The merger discussions are expected to conclude by June 2025, targeting sales revenue exceeding 30 trillion Japanese Yen and operating profits surpassing 3 trillion Yen. Additionally, Mitsubishi Motors is considering joining the merger, with a decision anticipated by the end of January. Recent social media discussions highlighted that Honda and Nissan are exploring vehicle production at each other's factories. Formal approval for the merger talks was confirmed, with definitive agreements expected by mid-2025.

LLY | +1.7% | +12.6B
Eli Lilly and Co | Pharmaceuticals
Eli Lilly and Co. experienced a notable increase in its stock price following the FDA's approval of its obesity drug Zepbound, which is now the first medication specifically approved for treating moderate-to-severe obstructive sleep apnea in adults. This approval, announced just over a day ago, comes with clinical trial data showing that patients on Zepbound experienced at least 25 fewer breathing interruptions per hour, with up to half of them symptom-free after one year. The company reported U.S. revenue of $1.26 billion from Zepbound in the third quarter. Additionally, Eli Lilly is expanding its manufacturing capabilities with a $3 billion investment to meet the rising demand for its diabetes and obesity medications. Social media discussions have highlighted Eli Lilly's competitive positioning against rivals such as Novo Nordisk and Amgen, further reinforcing a favorable market outlook for the company.

DESP | +33.1% | +464.2M
Despegar.com Corp | Hotels, Resorts & Cruise Lines
Despegar.com Corp has entered into a definitive merger agreement with Prosus NV, which will acquire the company for $19.50 per share in an all-cash transaction. This acquisition values Despegar at approximately $1.7 billion and represents a premium of around 34% over the volume weighted average price of its shares for the 90 trading days ending December 20, 2024. The deal has received approval from Despegar's Board of Directors, which recommends that shareholders vote in favor of the merger. The transaction is anticipated to close in the second quarter of 2025, pending shareholder approval. Following the announcement, social media discussions highlighted a significant price increase for Despegar, with mentions of a notable rise in its stock price after the news broke.

PLYA | +20.0% | +306.8M
Playa Hotels & Resorts NV | Hotels, Resorts & Cruise Lines
Playa Hotels & Resorts NV has entered into an exclusivity agreement with Hyatt Hotels Corporation to negotiate potential strategic alternatives, which may include an acquisition. This agreement allows Hyatt a 45-day period to explore these options, lasting until February 3, 2025, unless a definitive agreement is reached sooner. Hyatt holds a 9.99% stake in Playa and has filed an amendment to its Schedule 13D with the SEC regarding these discussions. Following the announcement, Playa's stock experienced a notable increase in trading activity, rising significantly during pre-market trading. Social media discussions have confirmed the exclusivity talks, contributing to heightened interest in Playa's recent price movement.
—𝑆𝑜𝑢𝑟𝑐𝑒: 𝑀𝑎𝑟𝑘𝑒𝑡𝑅𝑒𝑎𝑑𝑒𝑟 𝐼𝑛𝑐 @ 𝐷𝑒𝑐. 23𝑟𝑑 8:50 𝐴𝑀

XRX | +7.6% | +85.5M
Xerox Holdings Corp | Technology Hardware, Storage & Peripherals
Xerox Holdings Corp has announced its agreement to acquire Lexmark International for $1.5 billion, which includes assumed liabilities. The transaction will be funded through a combination of existing cash and committed debt financing. This acquisition is expected to enhance Xerox's core print portfolio and diversify its distribution network, with projections indicating immediate accretion to earnings per share and free cash flow. The company's board has approved the deal, which is anticipated to close in the second half of 2025, pending shareholder approval and customary conditions. Additionally, Xerox plans to reduce its annual dividend from $1 per share to $0.50 to support the funding of this acquisition. Social media discussions have confirmed this significant deal, emphasizing its financial implications for Xerox and its strategic intent within the printing industry.

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