Good Morning!
On December 26, all major U.S. indices showed little movement except for the Russell 2000, which gained 0.90%. The S&P 500 dipped slightly by 0.041%, the NASDAQ edged down by 0.054%, and the Dow rose marginally by 0.066%. As anticipated for Boxing Day, trading activity was subdued, with low volume.
Crypto Highlights
Bitcoin (BTC): Currently trading at $95,113, down slightly by 0.48% over the past 24 hours.
Ethereum (ETH): Nearly unchanged, down 0.03%, holding steady at $3,339 and spearheading the altcoin momentum.
Ripple (XRP): Slightly lower, down 0.4%, trading at $2.15.
Upcoming Earnings
There are no significant earnings announcements scheduled for today.
Headlines
S&P 500 Marks Largest Christmas Eve Rally in 50 Years
The S&P 500 surged 1.1% on Christmas Eve, delivering its strongest December 24 performance since 1974, according to FactSet data. The broad-based rally saw over 90% of S&P-listed stocks gain during the holiday-shortened trading session. Tesla led the charge with a 7.4% jump, while other notable movers included Netflix, Starbucks, and Walmart, each rising at least 2%. The session kicked off the Santa Claus rally period, historically associated with stronger-than-average stock market returns over the final five trading days of the year and the first two of the next.
Despite the impressive gains, trading activity was muted, reflecting the absence of major economic or earnings news and typical holiday-season calm. Tuesday’s session marked the lowest trading volume for the S&P 500 since March 2011, according to Yahoo Finance data. The Santa Claus rally, which has averaged a 1.3% gain since 1950, significantly outpaces the usual seven-day performance of 0.3%.
Treasury Yields Steady After Strong 7-Year Note Auction
Treasury yields finished largely unchanged on Thursday, buoyed by a robust auction for newly issued seven-year notes that reignited demand for U.S. government bonds. The yield on the 2-year Treasury note rose slightly by 0.1 basis point to 4.331%, while the 10-year Treasury yield edged down by 0.7 basis points to 4.577%. Meanwhile, the 30-year Treasury bond yield ticked up 0.1 basis point to 4.760%. Bond yields move inversely to prices, reflecting shifting investor sentiment.
Mortgage Rates Surge to Five-Month High to End 2024
U.S. mortgage rates climbed to their highest level in five months during the final week of 2024, with the 30-year fixed-rate mortgage averaging 6.85% as of December 26, according to Freddie Mac. This marks a significant rise from 6.61% during the same period last year and the highest rate since mid-July.
New York to Retroactively Fine Fossil Fuel Giants $75 Billion Under New Climate Law
New York State has passed a historic law aimed at holding fossil fuel companies accountable for their role in the climate crisis. Signed by Governor Kathy Hochul, the legislation imposes $75 billion in fines over 25 years on companies that emitted over 1 billion tons of greenhouse gases globally between 2000 and 2018.
NVIDIA and AMD Accelerate GPU Shipments to Dodge Looming Tariffs
NVIDIA and AMD are reportedly rushing to ship their next-generation GPUs to U.S. warehouses ahead of steep tariffs proposed by the Trump administration. The tariffs, which include a 60% levy on imports from China and 10% on imports from other countries, could significantly inflate consumer prices. To mitigate the impact, both companies have ramped up production and expedited shipments, aiming to stock U.S. markets before the January 20 inauguration.
Broadcom Emerges as AI Powerhouse, Joins Trillion-Dollar Club
Broadcom Inc. (AVGO) has cemented its place among the elite trillion-dollar companies, driven by explosive growth in artificial intelligence revenues. The company’s AI-related income surged from $3 billion to $12 billion in a year, with projections estimating $60 to $90 billion by 2027. Broadcom’s stock has climbed over 30% in the past month as investors recognize its potential as a cost-effective alternative to Nvidia's expensive processors. Analysts at Bank of America have called Broadcom a leading AI opportunity, while its fiscal fourth-quarter results revealed a 51% year-over-year revenue increase to $14.05 billion.
Beyond its AI chips, Broadcom is diversifying its revenue streams. The company’s $69 billion VMware acquisition has solidified its foothold in the software industry, contributing $21.5 billion in software revenue—or 44% of its 2024 total. This diversification, combined with partnerships with tech giants like Meta, Amazon, Microsoft, and Alibaba, positions Broadcom as a transformative player
Alibaba and E-Mart Launch $4 Billion Joint E-Commerce Venture
Alibaba Group and South Korea's E-Mart Inc. have announced a $4 billion joint venture to merge their e-commerce operations. The 50-50 partnership will integrate AliExpress International with E-Mart's Gmarket platform, creating a significant player in South Korea’s competitive online retail sector.
The companies plan to make additional investments in the new entity, aiming to challenge local e-commerce giants like Naver Corp. and Coupang Inc. This strategic move comes as South Korea grapples with waning consumer confidence.
Germany to Hold National Elections on February 23 After Parliament Dissolution
German President Frank-Walter Steinmeier dissolved parliament on Friday and scheduled national elections for February 23, following the collapse of Chancellor Olaf Scholz’s coalition government. The decision comes after Scholz lost a confidence vote on December 16, leaving him to lead a minority government after his three-party coalition unraveled in November over a dispute about revitalizing Germany’s stagnant economy. Steinmeier emphasized the need for a stable government with a reliable parliamentary majority to address Germany’s pressing challenges.
The election campaign is already underway, with polls showing Scholz’s Social Democrats trailing the conservative Union bloc led by Friedrich Merz. Vice Chancellor Robert Habeck of the Greens, a former coalition partner, is also vying for the chancellorship. Key issues shaping the election include immigration, economic recovery, and support for Ukraine. The far-right Alternative for Germany (AfD), polling strongly, has nominated Alice Weidel as its candidate but remains isolated as other parties refuse to work with it.
Large Numbers Of German-Made Leopard 1 Tanks Are Arriving In Ukraine
It took 19 months for a German-led consortium (Germany, The Netherlands, and Belgium) to refurbish and deliver the first 58 of at least 155 Leopard 1A5 tanks promised to Ukraine. However, the pace has improved, with 45 additional tanks shipped since September, making the Leopard 1A5 Ukraine's most numerous Western tank.
South Korea's Political Crisis Deepens with Impeachment of Acting President
South Korea’s National Assembly voted Friday to impeach Acting President and Prime Minister Han Duck-soo, escalating the nation’s political turmoil. Han had assumed the role of acting president earlier this month after President Yoon Suk Yeol was impeached following a controversial and short-lived declaration of martial law.
The opposition-controlled parliament accused Han of failing to address key demands, including filling three vacancies on the nine-member Constitutional Court and launching a special investigation into Yoon’s declaration of martial law. The ruling People Power Party argued that Han, as acting president, lacked the authority to make such appointments. The motion passed with 192 votes in the 300-member assembly, and Finance Minister Choi Sang-mok has stepped in as the new acting president, pledging to stabilize the government.
Nissan Shares See Sharp Decline Amid Honda Deal Uncertainty
Shares in Nissan plummeted on Friday, marking their steepest drop since August’s market sell-off, as investor concerns grew over the terms of a potential merger with Honda and Mitsubishi.
The stock fell as much as 15% during the day before recovering slightly to close 7.8% lower, reflecting significant market volatility. This sharp decline came just days after Nissan's shares surged 20% on December 17, following initial reports of merger discussions with Honda.
The proposed alliance between Nissan, Honda, and Mitsubishi aims to address declining sales and increased competition from Chinese automakers. Both Nissan and Honda have confirmed they are exploring a business integration via a joint holding company, while Mitsubishi is expected to decide on its participation by the end of January.
Nippon Steel Extends Deadline for U.S. Steel Deal as Biden's Decision Nears
Nippon Steel has pushed the closing date for its $14.9 billion acquisition of U.S. Steel to the first quarter of 2025, revising the original timeline of late 2024. The extension comes as U.S. President Joe Biden faces mounting pressure to block the deal, which has drawn strong opposition from the United Steelworkers union (USW) and political figures. Biden has emphasized his preference for U.S. Steel to remain domestically owned, while incoming President-elect Donald Trump has vowed to halt the merger upon taking office in January.
Bitcoin ETF Outflows Hit $1.5B as Price Retreats
Bitcoin exchange-traded funds (ETFs) saw over $1.5 billion in net outflows in the last four days, signaling caution among investors. Bitcoin's price has dropped 11% from its all-time high of $108,268 earlier this month, now trading at around $96,000. This marks the cryptocurrency's first weekly decline since Trump's election victory, influenced by the Federal Reserve's stance on inflation and interest rates.
Despite this, institutional interest remains robust. MicroStrategy purchased 5,262 bitcoins in December for $561 million at an average price of $106,662, bringing its total holdings to 444,262 bitcoins valued at $27.7 billion.
