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Friday, December 27

Recent economic data releases have highlighted significant trends impacting major global economies. In the U.S., wholesale inventories unexpectedly fell by 0.2% in November, contrary to market expectations for a rise, while the trade deficit widened more than anticipated to $102.86 billion due to increased imports and exports alike. These figures suggest potential shifts in inventory management strategies among businesses as they navigate changing demand dynamics.

In Japan, industrial production declined by 2.3% month-over-month in November but was less severe than expected; this marks its first contraction since August after previous growth periods. Additionally, Tokyo's core inflation rose slightly year-on-year but remained below consensus forecasts at 2.4%, indicating ongoing challenges with price stability despite some signs of recovery within consumer sentiment metrics.

Market reactions are also being influenced by geopolitical tensions and monetary policy outlooks from central banks globally—particularly regarding interest rate adjustments amid evolving fiscal policies under President-elect Donald Trump’s administration that may introduce new tariffs affecting various sectors including technology and manufacturing industries across both Europe and Asia.

iShares MSCI Japan ETF (EWJ) [+1.2%]
Tokyo's Consumer Price Index rose to 3.0% year-on-year in December, up from 2.6%, signaling increasing inflationary pressures that may influence the Bank of Japan's monetary policy decisions. The Core Consumer Price Index for December registered a year-on-year increase of 2.4%, slightly below expectations but above the prior figure. Preliminary data for November's Industrial Production showed a month-on-month decline of 2.3%, an improvement compared to expectations. The strengthening yen following the CPI release could positively affect market sentiment towards Japanese assets, including the iShares MSCI Japan ETF (EWJ), which has shown a daily return of 1.24%. Significant contributors to EWJ's performance include Toyota Motor Corporation, Sony Group Corporation, Honda Motor Co., Sumitomo Mitsui Financial Group, and Mitsubishi UFJ Financial Group, all of which recorded notable returns.

iShares China Large-Cap ETF (FXI) [-0.8%]
The iShares China Large-Cap ETF (FXI) has experienced a decline of approximately 0.8% since Thursday. China's National Bureau of Statistics has revised the 2023 GDP upward by around US$520 billion, suggesting a more favorable economic outlook. Nevertheless, the government's ongoing initiatives to stabilize the real estate market, extending into 2025, may negatively influence large-cap equities. Concerns about further declines in China's industrial profits are also present. Among FXI's holdings, JD and TCOM saw significant negative returns, while LI posted a modest increase. Additionally, the AUD/USD currency pair has decreased slightly, which may reflect broader market sentiment potentially affecting FXI's performance.

TSM | +0.6% | +34.5B
Taiwan Semiconductor Manufacturing Co Ltd | Semiconductors
Taiwan Semiconductor Manufacturing Co Ltd has seen its stock price increase significantly over the past year, marking its most substantial rally since 1999. Despite this impressive performance, market sentiment appears cautious regarding future investment opportunities. Concurrently, discussions on social media have underscored the reliance of companies like Nvidia and AMD on Taiwan Semiconductor for manufacturing processes. The dialogue also noted Intel's initiatives to establish its own foundry services, aiming to reduce dependency on Taiwan Semiconductor, with mentions of potential financial backing from former President Trump to support American manufacturing efforts.

BABA | -1.2% | -20.3B
Alibaba Group Holding Ltd | Broadline Retail
Shinsegae plans to establish a joint venture with Alibaba Group's subsidiary, Alibaba International, in 2025. This initiative involves Shinsegae investing its entire stake in the e-commerce platform Gmarket. The joint venture will integrate AliExpress Korea and Gmarket, although both will operate independently. Following this announcement, shares of Alibaba Group Holding fell nearly 1%, alongside a nearly 2% decline in Shinsegae's shares and a significant drop for E-Mart. Additionally, discussions on social media highlighted Alibaba's advancements in open-source large language models, particularly the Qwen2.5 72B model, which is noted for its competitiveness. A separate post reported a positive movement for BABA overnight in Asia, with the stock price rising significantly, while other stocks like FUTU and JD also experienced notable increases.

NFLX | -0.7% | -2.6B
Netflix Inc | Movies & Entertainment
Netflix Inc's stock has moved lower, reflecting the broader market's decline. Recent market conditions are influenced by central bank monetary policies, particularly the Federal Reserve's cautious stance on interest rate cuts, which has bolstered the US Dollar Index. Concurrently, geopolitical tensions and economic concerns in Europe have contributed to bearish sentiment in global equity indices. Notably, Netflix set records for streaming NFL games on Christmas Day, with significant viewership numbers reported. Despite this achievement, a poll indicated that a majority of respondents do not plan to watch these games, raising concerns about future viewership. Social media discussions highlight both the record-setting viewership and potential price movements, while the Nasdaq 100 Index has also seen a slight decrease, aligning with Netflix's recent performance.

WBD | -0.6% | -146.2M
Warner Bros Discovery Inc | Movies & Entertainment
Warner Bros Discovery Inc. has announced a new corporate structure aimed at enhancing its streaming studios. The company is currently facing significant challenges, including a decline in third-quarter revenues and a notable drop in studio revenue. Domestic streaming subscriber growth has stagnated, even amidst major events such as the Olympics. Additionally, high debt levels are complicating the company's financial outlook, rendering it less attractive to investors despite a low enterprise value to EBITDA ratio. Conversations on social media reflect concerns regarding the effectiveness of the restructuring in addressing these ongoing issues and improving overall business performance.

AMED | +4.6% | +133.9M
Amedisys Inc | Health Care Services
Amedisys Inc has extended its merger deadline with UnitedHealth until December 31, 2025, as disclosed in a recent filing. This extension may allow for additional regulatory review and integration planning. Concurrently, social media discussions noted that Amedisys and UnitedHealth have entered into a waiver permitting both companies to forgo their rights to terminate the Merger Agreement if it is not completed by the previously specified Outside Date. Following these developments, Amedisys's stock price has increased by 4.0% since Thursday.

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