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Tuesday, December 24

Noteworthy US mega-cap moves today: Broadcom Inc (AVGO) +2.5%.

Recent market movements are significantly influenced by developments in major global economies, particularly regarding monetary policy and economic data. The U.S. Dollar Index is trading near a two-year high as the Federal Reserve has indicated only gradual interest rate cuts for 2025, with expectations of just two reductions during that year. This cautious approach comes amid mixed signals from recent economic indicators; notably, durable goods orders fell more than expected at -1.1%, while consumer confidence dropped sharply to 104.7.

In Japan, Finance Minister Katsunobu Kato emphasized the need for currency stability amidst sharp foreign exchange fluctuations caused by rising U.S. interest rates affecting the yen's value against both USD and EUR currencies. Additionally, Japanese government bond yields have increased alongside these trends but remain stable overall due to steady money market conditions.

China’s policymakers announced plans to sell nearly $411 billion worth of special treasury bonds in an effort aimed at boosting domestic consumption and stabilizing growth through fiscal support measures set for implementation next year—this follows ongoing concerns about slowing recovery linked primarily to challenges within its real estate sector and labor markets.

iShares China Large-Cap ETF (FXI) [+1.0%]
Large Cap
China's Ministry of Finance has announced plans to sell a record 3 trillion yuan in special treasury bonds in 2025, aiming to boost consumption subsidies and investments in key sectors. This move is expected to provide significant stimulus for the Chinese economy, potentially benefiting large-cap equities like those tracked by the iShares China Large-Cap ETF (FXI). Concurrently, the National Fiscal Work Conference has revealed intentions to increase fiscal spending and accelerate expenditures in 2025, focusing on enhancing livelihoods and consumption. Among the top contributors to FXI's performance, JD, YUMC, and LI have shown positive returns, further aligning with the optimistic fiscal outlook. Ongoing geopolitical tensions and trade issues with the U.S., particularly regarding semiconductor policies, continue to create uncertainty that may influence market sentiment towards Chinese stocks.

AVGO | +2.3% | +2.6B
Broadcom Inc | Semiconductors
Broadcom Inc. has seen a notable price increase, attributed to a rally in chip stocks. Analysts have revised their revenue forecasts for artificial intelligence (AI), positively impacting Broadcom alongside Advanced Micro Devices. This surge in Broadcom's stock reflects heightened enthusiasm regarding AI-related growth opportunities. Social media discussions highlighted that Nancy Pelosi acquired call options on Broadcom, with a strike price adjusted after a stock split, set to expire in June 2025. Additionally, users noted that Broadcom was establishing a "power earnings gap," suggesting potential upward movement. Despite a recent surge, some sentiment indicated that Broadcom has not yet experienced its "Nvidia moment," even after a significant price increase following a mediocre fiscal Q4 earnings report. Management's optimistic addressable market forecast for 2027 continues to be a focal point for analysts and investors alike.

INSW | +7.4% | +133.1M
International Seaways Inc | Oil & Gas Storage & Transportation
International Seaways Inc. will be included in the S&P SmallCap 600 index, effective before the market opens on December 30, 2024. This announcement was made by S&P Dow Jones Indices approximately four hours ago. Following the news, shares of International Seaways experienced a significant increase of 10% in extended trading, reaching a price of $37. Prior to this announcement, the stock had been down year-to-date. Additionally, shares were observed trading positively in after-hours on December 4th, with a reported increase of 8%, reaching $36.52 after the regular trading session. The inclusion in the S&P index has been prominently discussed on social media, underscoring its importance for the stock's performance.

AAL | -0.9% | -97.6M
American Airlines Group Inc | Passenger Airlines
American Airlines Group Inc. experienced significant operational disruptions due to a technical issue, leading to the grounding of all flights nationwide. This announcement, made approximately 55 minutes ago, coincided with a notable decline in share price during premarket trading, which reflected a drop of around 3.5%. The Federal Aviation Administration subsequently canceled the nationwide groundstop, but the initial impact on stock performance was already evident. Social media discussions have highlighted the urgency of the situation, with reports indicating that the grounding occurred on one of the busiest travel days of the year, attributed to a software outage affecting weight and balance calculations. Amidst this turmoil, American Airlines' stock price has also seen a decrease of 0.8% since Monday, paralleling a slight decline in the Dow Jones Index.

X | -1.0% | -71.2M
United States Steel Corp | Steel
Nippon Steel's acquisition plan for United States Steel Corp has encountered significant regulatory hurdles. The Committee on Foreign Investment in the United States (CFIUS) failed to reach a consensus, leading to the matter being referred to President Biden for review. The proposed acquisition, valued at $14.9 billion, faces mounting national security concerns, with CFIUS citing risks to domestic steel production. Despite Nippon Steel's proposal to appoint U.S. citizens to top management positions, the panel remains divided on its effectiveness. The United Steelworkers union has strongly opposed the acquisition, emphasizing the need for U.S. Steel to remain under American ownership. Both Nippon Steel and U.S. Steel have warned of potential legal challenges should the deal be blocked. Social media discussions reflect a growing interest in this deadlock and its implications for U.S. Steel and its shareholders.

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