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Tuesday, December 17

Some of the largest macro moves in the market today include: Copper -1.3%. Noteworthy US mega-cap moves today: NVIDIA Corp (NVDA) -1.8%.

Recent economic data releases have shown mixed signals across major global economies. In the U.S., retail sales for November increased by 0.7%, surpassing expectations and indicating robust consumer spending (but with details more mixed), which is crucial ahead of the Federal Reserve's upcoming interest rate decision on December 18th. Meanwhile, Canada's inflation eased to an annual rate of 1.9% in November, below market forecasts but with core measures remaining stable; this has implications for future monetary policy from the Bank of Canada.

Political developments are also influencing markets significantly at present. The resignation of Canadian Finance Minister Chrystia Freeland amid internal government tensions raises concerns about Prime Minister Trudeau’s stability as leader during a critical period marked by tariff threats from President-elect Trump that could impact trade relations and fiscal policies moving forward.

In Europe, Germany faces political uncertainty following Chancellor Olaf Scholz losing a vote of confidence, leading to snap elections scheduled for February next year while business sentiment indicators like Ifo show declining morale among businesses despite some positive readings elsewhere such as UK employment figures exceeding expectations—this backdrop contributes to volatility within European equity indices amidst broader geopolitical risks affecting investor sentiment globally.

SPDR Dow Jones Industrial Average ETF Trust (DIA) [-0.6%]
The SPDR Dow Jones Industrial Average ETF Trust (DIA) is under pressure, having declined for eight consecutive days, marking its longest losing streak since 2018. This downturn is driven by weakness in key components, particularly UnitedHealth and Verizon. In contrast, the Nasdaq-100 ETF has risen, highlighting a divergence in sector performance. Recent social media discussions emphasize concerns over DIA's performance, noting its lowest Stochastic reading since May. Mixed economic signals have also influenced market sentiment; while US retail sales showed stronger-than-expected growth, retail sales excluding autos and gas fell short of forecasts. The Dow is down approximately 0.4%, reflecting broader market trends, including a decline in the S&P 500 Index. Anticipation of a Federal Reserve interest rate cut and weak economic indicators from Europe and China contribute to the prevailing bearish sentiment in US stock indices.

iShares China Large-Cap ETF (FXI) [-1.1%]
The iShares China Large-Cap ETF (FXI) is experiencing downward pressure, having declined by 1.0% since Monday. China's November retail sales figures showed a notable slowdown, dropping to 3% from a previously reported 4.8%, raising concerns about consumer demand growth. Concurrently, domestic banks reported a record net outflow of $45.7 billion in November for securities investment, reflecting significant strain in China's financial markets. The Shanghai Composite index also fell by 0.73%. Social media discussions highlight that Chinese authorities plan to increase the budget deficit to 4% of GDP by 2025 to support economic growth, the highest level on record. Additionally, the AUD/USD currency pair has declined by 0.51%, which may reflect broader market sentiment affecting FXI.

PFE | +2.3%| +3.3B
Pfizer Inc | Pharmaceuticals
Pfizer Inc. has announced its full-year 2025 guidance, projecting revenues between $61 billion and $64 billion, with adjusted EPS anticipated at $2.80 to $3.00. This forecast includes expectations for stable revenues from COVID-19 products compared to 2024, despite a $1.2 billion decrease in non-recurring revenue from Paxlovid. The company reaffirmed its 2024 guidance of $61 billion to $64 billion in revenue and adjusted EPS of $2.75 to $2.95. Pfizer reported achieving $4 billion in net cost savings through 2024 and expects an additional $500 million in savings for 2025. Social media discussions highlighted that the guidance aligns closely with analysts' expectations, with operational growth for adjusted EPS projected between 10% and 18% from the midpoint of the 2024 guidance. Despite a projected $1 billion revenue impact from changes in federal drug benefits under the Inflation Reduction Act, the stock has seen positive movement today.

TSLA | +2.1% | +32.2B
Tesla Inc | Automobile Manufacturers
Tesla Inc is experiencing a notable price increase, attributed in part to the broader movement within the Automobile Manufacturers sub-sector. Mizuho Securities has upgraded Tesla's rating to "outperform" and raised its price target significantly, citing favorable conditions for growth in autonomous driving technologies. This upgrade aligns with expectations of regulatory changes that may enhance the potential revenue from Tesla's Full Self-Driving technology, projected to generate substantial income by 2030. Additionally, social media activity has highlighted a significant value gain for Tesla, driven by optimism surrounding AI advancements and regulatory shifts favoring autonomous vehicles. The stock has reached record highs, reflecting a marked performance improvement over recent weeks, with virtually no institutional selling observed this December, contrasting with previous years.

AFRM | -3.1% | -676.9M
Affirm Holdings Inc | Transaction & Payment Processing Services
Affirm Holdings Inc has experienced a decline of 3.5% in pre-market trading, aligning with broader market movements. The company announced a proposed private offering of $750 million in convertible senior notes due 2029, with an additional option for purchasers to buy $112.5 million more. The proceeds will be used to repurchase existing convertible senior notes due 2026 and to buy back up to $300 million of its Class A common stock. This announcement has led to a decrease in trading activity for Affirm shares, reflecting market reactions to the debt issuance and stock repurchase plans. Additionally, the iShares MSCI EAFE ETF and the Russell 2000 Index have also seen declines, indicating a broader negative sentiment in the market.

TEVA | +17.1%| +3.8B
Teva Pharmaceutical Industries Ltd | Pharmaceuticals
Teva Pharmaceutical Industries Ltd. experienced a significant price increase following the announcement of positive results from the Phase 2b RELIEVE UCCD study in collaboration with Sanofi. The study evaluated the monoclonal antibody duvakitug for treating ulcerative colitis and Crohn's disease, achieving its primary endpoints. Notably, 36.2% and 47.8% of ulcerative colitis patients reached clinical remission, compared to 20.45% on placebo. For Crohn's disease, 26.1% and 47.8% achieved endoscopic response against a placebo rate of 13.0%. The treatment demonstrated a favorable safety profile, with no significant safety signals reported. Detailed results are scheduled for presentation at a scientific forum in 2025, marking a crucial milestone in the development of duvakitug for inflammatory bowel disease.

MU | +1.3% | +1.5B
Micron Technology Inc | Semiconductors
Micron Technology Inc (MU) has seen a price increase of 1.3% since Monday. The U.S. Commerce Department recently approved a $406 million grant for Taiwan's GlobalWafers, aimed at boosting silicon wafer production in the U.S. This initiative is part of a broader strategy to strengthen the domestic chip supply chain and is expected to generate significant investments and jobs in Texas and Missouri. Social media discussions reflect mixed sentiments regarding MU's stock performance ahead of its earnings report scheduled for Wednesday. Raymond James anticipates a slightly weaker outlook for MU, while other posts highlight its recent status as one of the biggest gainers. Micron is set to announce Q1 FY2025 earnings with an EPS estimate of $1.76 and revenue estimate of $8.6 billion, following a robust previous quarter where it surpassed revenue expectations significantly.

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