Good Morning!
The Santa Rally brought a wave of optimism to the markets on December 24, driving broad-based gains across major indices. The S&P 500 gained 1.10%, the Dow Jones Industrial Average rose 0.91%, and the NASDAQ climbed 1.35%. Small caps in the Russell 2000 were also up 1.00%. This traditional year-end phenomenon reinforced expectations for a positive close to the trading year.
Crypto Highlights
Bitcoin experienced a sharp 4% price drop earlier today, triggered by what appeared to be erroneous data from TradingView. The platform briefly showed Bitcoin’s market dominance—its share of the overall cryptocurrency market cap—plummeting to 0%.
Bitcoin (BTC): Down 3.72% in the last 24 hours, hovering around $95,664 per coin before market open.
Ethereum (ETH): Fell 4% since yesterday, trading at $3,353 per coin.
Solana (SOL): Dropped 3.93% in the last 24 hours, reaching $188.76.
XRP: Lost 4.89%, trading at $2.17.
Upcoming Earnings
There are no significant earnings announcements scheduled for today.
Headlines
Bald Eagle Officially Declared US National Bird After 250 Years
President Joe Biden signed a historic law on Christmas Eve officially designating the bald eagle as the national bird of the United States. While the bald eagle has symbolized the nation for centuries, appearing on the Great Seal since 1782, it was never formally recognized as the national bird until Congress passed the legislation last week.
“For nearly 250 years, we called the bald eagle the national bird when it wasn’t,” said Jack Davis, co-chair of the National Bird Initiative for the National Eagle Center. The bald eagle, indigenous to North America, has long been revered as a symbol of strength, freedom, and courage. Minnesota lawmakers, representing one of the largest bald eagle populations in the nation, spearheaded the bill.
Biden Signs 50 Bills into Law on Christmas Eve
As his term nears its end, President Joe Biden signed 50 bills into law on Christmas Eve, tackling a diverse array of issues from institutional child abuse to anti-hazing reforms and congressional ethics. Among the new laws is the Stop Institutional Child Abuse Act, championed by activist Paris Hilton, which establishes federal oversight for youth residential treatment facilities to protect minors from abuse. Another landmark measure, the Stop Campus Hazing Act, mandates colleges to report hazing incidents in their security reports and educate students on its dangers.
Additional notable legislation includes S. 932, which bars convicted members of Congress from receiving pensions for crimes involving public corruption, and S. 4610, officially designating the bald eagle as the U.S. national bird. Alongside these legislative actions, President Biden commuted the death sentences of 37 federal inmates to life imprisonment without parole, a decision that sparked mixed reactions. However, he vetoed a bill to create 66 new federal judgeships, citing unresolved implementation concerns.
Holiday Shopping Season Highlights Divide Among Retailers
As the holiday shopping season begins, a clear divide is emerging between retailers that are thriving and those struggling to capture consumer dollars. Recent earnings reports reveal mixed fortunes: Target, Kohl’s, and Best Buy reported disappointing third-quarter results, while Walmart, Dick’s Sporting Goods, and Abercrombie & Fitch posted strong sales. Early holiday promotions have failed to significantly boost business for weaker retailers, highlighting the selective spending habits of consumers.
After more than two years of inflation impacting essentials like groceries, housing, and dining, shoppers remain cautious even as inflation eases. Retailers now face the challenge of enticing selective consumers to spend on discretionary items like party outfits, toys, and makeup. Neil Saunders, managing director of GlobalData Retail, noted that with less money to spend, consumers are gravitating toward stronger brands, leaving weaker retailers behind.
Apple Seeks to Defend Google’s Billion-Dollar Payments in Search Antitrust Case
Apple has requested to participate in Google’s upcoming U.S. antitrust trial over online search, arguing it cannot rely on Google to protect the revenue-sharing agreements that have earned Apple billions annually. These agreements make Google the default search engine on Apple’s Safari browser, reportedly netting Apple an estimated $20 billion in 2022 alone.
Lockheed Martin Secures $11.8 Billion Contract to Produce F-35 Jets
Lockheed Martin Corporation's Aeronautics division has been awarded a $11.76 billion modification contract to advance its F-35 fighter jet program. The contract, offered by the Naval Air Systems Command in Patuxent River, Maryland, entails the production and delivery of 145 F-35 jets, covering all three variants of the aircraft. Additionally, Lockheed Martin will provide tooling support for Italy and Japan’s final assembly and check-out facilities. The project is expected to be completed by June 2027 and will serve the U.S. Navy, Air Force, Marine Corps, and F-35 cooperative program partners. A significant portion of the work will take place in Fort Worth, Texas.
Biden Pledges More U.S. Arms to Ukraine After Russia’s Christmas Attack
President Joe Biden condemned Russia's large-scale Christmas Day attacks on Ukraine, which targeted critical energy infrastructure, leaving parts of the country in peril during winter. The assault, described by Ukrainian President Volodymyr Zelensky as "inhumane," resulted in the death of one person in the eastern Dnipropetrovsk region and injuries to six others in Kharkiv.
In a statement, Biden denounced the attacks as an effort to cut off Ukraine’s access to heat and electricity during winter, endangering the safety of the country’s energy grid. He noted, “In recent months, the United States has provided Ukraine with hundreds of air defense missiles, and more are on the way.”
Undersea Power Cable Linking Finland and Estonia Faces Outage, Investigation Underway
The Estlink-2 undersea power cable connecting Finland and Estonia experienced an outage on Wednesday, prompting an investigation, Finnish Prime Minister Petteri Orpo announced. In a statement on X, Orpo confirmed the interruption of power transmission but reassured that Finland's electricity supply would remain unaffected. Estonia’s network operator, Elering, also noted sufficient spare capacity to meet power demands on their side.
FDA Approves First Medication for Obstructive Sleep Apnea
The FDA has approved Eli Lilly’s Zepbound (tirzepatide) as the first medication to treat moderate to severe obstructive sleep apnea (OSA) in adults with obesity. This groundbreaking treatment, announced on December 20, works by activating hormone receptors to reduce appetite and food intake, resulting in significant weight loss and improvements in OSA symptoms. In clinical trials, participants experienced notable reductions in apnea and hypopnea events, with many achieving symptom remission.
Japan to Maximize Nuclear Power in Clean-Energy Push Amid Growing Electricity Demand
Japan’s government panel has endorsed a draft energy policy that emphasizes maximizing nuclear power and significantly increasing renewable energy use to meet growing electricity demands. The proposed policy, presented by the Industry Ministry, aims for renewables to provide 40-50% of the nation’s energy needs by 2040, while nuclear energy would account for 20%, a notable rise from last year’s 8.5%.
The policy marks a reversal from Japan’s post-Fukushima phaseout of nuclear energy, following the 2011 meltdown crisis at Fukushima Daiichi. To meet the 20% nuclear target, all 33 functional reactors in Japan would need to be operational, compared to the 14 currently active—a challenging goal given the pace of regulatory approvals.
Seven & i Attracts Big Bids from KKR and Bain Amid Privatization Talks
Japan's Seven & i Holdings has drawn significant interest from private equity firms KKR and Bain Capital, with both firms submitting first-round bids exceeding $5 billion for the company’s non-core assets. KKR offered approximately 800 billion yen ($5.1 billion) for York Holdings, a unit set to house Seven & i’s supermarket operations and other non-core businesses. Rival firm Bain Capital submitted a higher bid of 1.2 trillion yen, while local buyout firm Japan Industrial Partners offered around 750 billion yen.
Parallel to the asset sale, there are discussions about privatizing Seven & i. The retailer’s founding family is reportedly exploring this move as a defense against a $47 billion takeover bid by Canada’s Alimentation Couche-Tard. If realized, the privatization would be the largest ever for a Japanese company, with Seven & i’s market capitalization standing at 6.2 trillion yen as of December 24.
China’s Short-Term Bond Yields Fall Below 1% for First Time Since 2009
China's short-term sovereign bond yields dropped below 1% on Friday, reaching levels not seen since the global financial crisis, amid concerns over weak domestic demand and expectations of further monetary easing. The yield on one-year bonds fell to 0.92%, while 10-year yields dropped to 1.74% after breaking below 2% earlier this month. These declines come as the People’s Bank of China (PBoC) announced unchanged one-year and five-year loan prime rates, reinforcing predictions of further rate cuts in 2025.
The drop in yields follows weak November economic data, including disappointing retail sales and imports, which heightened concerns about domestic demand. Increased demand for treasury bonds from banks and insurers at year-end has also contributed to the decline. In response, the PBoC has loosened monetary policy for the first time in 14 years, signaling plans to cut banks' reserve requirements and interest rates in 2025.
Chinese Workers Rescued from 'Slavery-Like' Conditions at BYD Factory Construction Site in Brazil
Brazilian authorities have rescued 163 Chinese construction workers from "slavery-like" conditions at a factory construction site for BYD, a major Chinese electric vehicle manufacturer, in Camaçari, Brazil. The workers, hired by contractor Jinjiang Construction Brazil, were reportedly subjected to forced labor practices, including passport confiscation and withholding of 60% of their wages. Workers who attempted to leave were required to reimburse the company for airfare from China and return tickets.
Dozens Dead in Azerbaijan Airlines Crash, Russian Air Defenses Suspected
At least 38 people were killed when an Azerbaijan Airlines passenger jet crashed in western Kazakhstan, with Ukrainian officials and aviation experts suggesting the incident was likely caused by Russian antiaircraft fire. The flight, traveling from Baku, Azerbaijan, to Grozny, Russia, deviated from its planned route over an area where Moscow’s air defenses have recently engaged Ukrainian drones.
ASML CEO: China is 10 to 15 Years Behind in Chipmaking Capabilities
Despite notable advancements by Chinese companies such as SMIC and Huawei in recent years, they remain 10 to 15 years behind leading semiconductor players like Intel, TSMC, and Samsung, according to Christophe Fouquet, CEO of ASML. Fouquet attributed this lag primarily to the lack of access to extreme ultraviolet (EUV) lithography tools, which are critical for advanced chip manufacturing.
ASML, a key supplier of lithography tools, has never shipped its EUV machines to China due to restrictions under the Wassenaar Arrangement and U.S. sanctions. Although Chinese firms like SMIC have managed to produce 7nm-class chips using advanced deep ultraviolet (DUV) tools such as the Twinscan NXT:2000i, these efforts fall short of the cost-effectiveness and sophistication achieved by Western competitors using EUV technology.
MicroStrategy’s Michael Saylor Compares Bitcoin to ‘Cyber Manhattan,’ Calls It a Long-Term Investment
Michael Saylor, founder and chairman of MicroStrategy, likened Bitcoin to "cyber Manhattan" on Monday, emphasizing its enduring investment potential as the cryptocurrency hit a record high of $107,162.64. Speaking on CNBC’s Money Movers, Saylor drew parallels between Bitcoin and New York City’s economy, stating, “I would have bought Manhattan 100 years ago, 200 years ago, every year for the past 300 years. You pay a little bit more, but it’s always a good investment to invest in the economic capital of the free world.”
MicroStrategy, a corporate bitcoin pioneer, has been adding the cryptocurrency to its balance sheet since 2020. The company now holds 439,000 BTC, worth approximately $46 billion, after a recent purchase of 15,350 BTC. Saylor defended the strategy against critics, comparing it to developers in Manhattan leveraging debt to capitalize on rising real estate values. MicroStrategy’s inclusion in the Nasdaq-100 on December 23 further positions it as a prominent Bitcoin proxy, with shares rising over 5% on Monday as Bitcoin soared to new heights.
