Good Morning!
As we approach the end of 2024, on December 30, the S&P 500 closed at 5,906, down 1.07%, while the NASDAQ posted a decline of 1.19% to 19,486, and the Dow Jones Industrial Average retreated to 42,573, down 0.97%. The Russell 2000 was down 0.75% for the day, ending at 2,227. Trading volumes are expected to remain light. Tomorrow, January 1, U.S. markets will be closed in observance of the New Year.
Crypto Highlights
Bitcoin (BTC): Currently trading at $95,518, up 3% over the past 24 hours.
Ethereum (ETH): Holding steady at $3,425, up 1.98%.
Solana (SOL): Gained 3.48% in the last day, currently at $195.77.
Ripple (XRP): Trading 3.28% higher in the last 24 hours at $2.13 per coin.
Upcoming Earnings
There are no significant earnings announcements scheduled for today.
Headlines
U.S. Treasury Computers Hacked by Chinese ‘Threat Actor’ in Major Cybersecurity Breach
The U.S. Treasury Department disclosed that a state-sponsored Chinese hacking group accessed Treasury employees' workstations through a compromised third-party cybersecurity service provider, BeyondTrust. The breach, described as a "major incident," was revealed in a letter from Aditi Hardikar, assistant secretary for management, addressed to key members of the Senate Committee on Banking, Housing, and Urban Affairs. The attack exploited a key used by BeyondTrust to secure a cloud-based service, allowing the hackers to bypass security measures and access unclassified documents.
The Treasury Department is collaborating with the Cybersecurity and Infrastructure Security Agency, the FBI, and other intelligence agencies to assess the incident's impact. China has denied the allegations, with a Ministry of Foreign Affairs spokesperson dismissing them as politically motivated misinformation.
Bank Regulator Gives BlackRock January Deadline on Bank Stakes
The U.S. Federal Deposit Insurance Corporation (FDIC) has set a January 10 deadline for BlackRock to accept a "passivity agreement" designed to increase regulatory oversight of its investments in FDIC-regulated banks. This move comes as part of the FDIC’s broader effort to ensure compliance from large asset managers like BlackRock and Vanguard, which invest in banking institutions as passive stakeholders.
NVIDIA to Reportedly Release “Jetson Thor” Computers by Next Year, Marking the Beginning of the “Robotic AI” Era
NVIDIA is poised to take a significant step in the evolution of humanoid robotics with the anticipated release of its "Jetson Thor" compact computers in the first half of 2025. These next-generation devices are designed to accelerate the development of robotic systems, a market projected to grow to $195 billion by 2029. NVIDIA is now focusing on robotics as a key growth driver amidst intensifying competition in its core AI chipmaking business.
The company is building a comprehensive ecosystem for robotics, leveraging its expertise in model training and its Omniverse and Isaac software platforms. These tools enable the creation of simulated environments, allowing robots to interact in real time during development. With the global robotics industry projected to reach $165 billion by 2029, NVIDIA’s initiative could reshape the sector. The Jetson Thor series marks the convergence of cutting-edge AI technologies and robotics, setting the stage for a new era of innovation in automated systems.
Nvidia Completes $700 Million Acquisition of AI Startup Run:ai
Nvidia has finalized its $700 million acquisition of Israeli AI startup Run:ai, a company specializing in optimizing artificial intelligence workloads. The deal aims to enhance Nvidia's AI product offerings and improve GPU resource utilization in high-demand computing environments. Run:ai's virtualization and orchestration software will be integrated into Nvidia's DGX Cloud system, expanding enterprise users' options for managing AI workloads efficiently.
This acquisition aligns with Nvidia's broader strategy to dominate the AI ecosystem, encompassing hardware, software, and cloud-based solutions. Regulatory approval was secured earlier this month when the European Commission and U.S. Department of Justice determined the merger would not harm competition in the AI or GPU markets.
US Lab to Explore ‘Beyond EUV’ Lithography for Faster, More Powerful Semiconductors
Lawrence Livermore National Laboratory (LLNL) is spearheading the development of next-generation “beyond EUV” (BEUV) lithography, aiming to revolutionize semiconductor manufacturing. The project centers on LLNL’s Big Aperture Thulium (BAT) laser, which is expected to improve EUV source efficiency tenfold compared to current carbon dioxide (CO2) lasers. This advancement could enable the production of smaller, faster, and more energy-efficient chips, addressing the semiconductor industry’s demand for cutting-edge technology.
TSMC Plans Two More Kaohsiung Fabs to Meet Growing Demand
Taiwan Semiconductor Manufacturing Co. (TSMC) will expand its operations in Kaohsiung by constructing two additional wafer fabs, P4 and P5, in 2025. These facilities are part of TSMC’s broader plan to establish five fabs in the city, creating 8,000 jobs and boosting its capacity to produce high-end semiconductor technologies. The expansion is driven by growing global demand for advanced chips and the need to maintain a competitive edge in the fast-evolving semiconductor market. The P4 and P5 fabs are expected to be completed by 2027.
TSMC’s first Kaohsiung fab, P1, is set to begin mass production of 2-nanometer chips next year, offering a 10-15% performance boost over current 3-nanometer technologies while consuming less power. Construction of the P2 fab, also focused on 2nm processes, will finish in 2025, with the P3 fab following in 2026. TSMC is also developing next-generation nanosheet-based A16 technology, slated for production in 2026. It expects 20% year-on-year growth in 2025, outpacing the broader semiconductor industry.
Eurozone Bank Shares Poised for Best Year-End Since 2010
European bank shares are set to close 2024 at their highest year-end levels in over a decade, driven by strong profitability and record shareholder returns despite falling interest rates. The Euro Stoxx Banks index, which tracks major lenders in the Eurozone, is on course to end the year above 142 for the first time since 2010, marking a more than 20% increase. Analysts attribute this resilience to structural hedging strategies that protected profits from the impact of declining rates. “European banks have had another great year,” said Andrew Stimpson of Keefe, Bruyette & Woods, highlighting the sector’s ability to safeguard earnings.
Leading performers included UniCredit, which saw a 50% surge in share value, and Intesa Sanpaolo, up over 40%, while Deutsche Bank gained more than 30%. However, not all banks fared as well, with BNP Paribas shares declining by nearly 8%. Overall, the sector achieved an average return on equity of about 13% in 2024
Russian Gas Flows Through Ukraine End as Transit Deal Expires
Russia’s gas transit through Ukraine will end on January 1, 2025, as the five-year agreement between the countries expires. Ukraine has refused to negotiate a new deal amid its ongoing war with Russia, signaling the near-total collapse of Russia’s gas exports to Europe. Once responsible for 35% of Europe’s gas supply, Russia has lost significant market share to rivals like Norway and the U.S. since its 2022 invasion of Ukraine. While this shift caused price surges and inflation in 2022, the upcoming halt is unlikely to trigger similar disruptions due to the reduced volume of transited gas, which accounted for just 8% of peak flows in 2023.
The fallout has dealt a severe blow to Russia’s Gazprom, which reported a $7 billion loss in 2023, its first since 1999. Disputes over payments have further strained relations, with Moldova preparing to nationalize its partially Gazprom-owned gas company and Slovakia threatening retaliatory measures against Ukraine.
Austria Energy Regulator Expects Smooth Transition as Ukraine Gas Deal Ends
Austria is expected to manage a seamless shift in its natural gas supply as Ukraine's gas transit agreement with Gazprom expires, according to the Austrian energy regulator E-Control.
The change follows Ukraine’s decision to terminate its gas transit deal with Gazprom, coupled with Austrian energy company OMV's recent termination of its agreement with the Russian gas giant. OMV has implemented measures to diversify its supply sources, ensuring uninterrupted service for customers. Krug noted that while gas prices might temporarily rise after January 1, they are expected to stabilize once the market confirms the transition's success.
Volkswagen Leak Exposed Precise Location Data on Thousands of Vehicles Across Europe for Months
Volkswagen Group’s software subsidiary, Cariad, inadvertently left terabytes of sensitive data from approximately 800,000 electric vehicles exposed online for months. According to a report by Der Spiegel, citing security researchers and a whistleblower, the exposed data included precise location coordinates for over 460,000 cars, with some accuracy measured down to mere centimeters. The vehicles impacted span the Audi, Seat, Skoda, and Volkswagen brands, with most located in Germany, Norway, Sweden, and the United Kingdom.
The issue was disclosed by security researchers during a presentation at the Chaos Computer Club in Hamburg, Germany. Cariad quickly addressed the vulnerability, stating it has found no evidence that anyone beyond the researchers accessed the data.
Romania and Bulgaria to Join Schengen Area on New Year’s Day
Romania and Bulgaria will officially join the Schengen Area on January 1, 2025. This decision follows the EU’s December 12 vote to lift internal land border controls, granting the two nations full membership in the border-free zone. Air and sea border checks were removed earlier this year.
Tthe countries’ integration into the Schengen Area—now comprising 29 nations and nearly 450 million people—represents a major step forward in European cooperation and free movement.
Gold Heads for Biggest Gain Since 2010 in Mixed Year for Metals
Gold is set to close 2024 with a remarkable 27% gain, marking its largest annual increase in 14 years. This surge was driven by U.S. monetary easing, persistent geopolitical risks, and significant central bank purchases. Despite a dip following Donald Trump’s sweeping presidential victory in November, gold outperformed most commodities throughout the year. In contrast, base metals experienced mixed results, iron ore suffered a steep decline, and lithium faced continued pressure due to oversupply in the electric vehicle industry.
MicroStrategy Shares Slip 8% After End-of-Year Bitcoin Buy
Shares of MicroStrategy (MSTR) fell over 8% following the company’s $209 million Bitcoin purchase on Dec. 30. The business intelligence firm, led by Michael Saylor, disclosed its acquisition shortly before trading began on the Nasdaq, where its stock price dropped 5.3% within the first hour. Despite some recovery during regular trading, the stock closed at $302.96, only to decline an additional 3.19% in after-hours trading, settling at $293.59.
The purchase was part of MicroStrategy’s ongoing Bitcoin acquisition strategy, marking its eighth consecutive week of adding Bitcoin to its holdings. Since Oct. 31, the company has amassed 194,180 BTC, funding its latest acquisition by selling 592,987 shares during the same week. However, concerns about the firm’s highly leveraged position have grown. Despite a 20.2% decline in MSTR stock over the past 30 days, the shares remain up 342.2% since the start of the year.
