- Asian Stocks Rise on Optimism Over China Stimulus: Markets Wrap
Most Asian equities advanced after China’s top leaders signaled bolder stimulus next year as they seek to
revive the world’s second-largest economy. Benchmark stock indexes in China and Hong Kong both jumped
at the open before paring gains, while those in Japan and South Korea also climbed. Iron ore rose the most in
two months thanks to Beijing’s announcement as the country is a major importer of commodities. China’s
sovereign bond yields sank to a record low. President Xi Jinping’s decision-making Politburo vowed to
embrace a moderately loose monetary policy in 2025, signaling more rate cuts ahead and shifting from a
prudent strategy that’s held for nearly 14 years. Investors will now shift focus to China’s annual closed-door
Central Economic Work Conference due later this week. - Dow drops more than 200 points, S&P 500 pulls back from record as Nvidia slides
The S&P 500 and Nasdaq Composite pulled back from record highs Monday, with tech shares struggling and
investors looking ahead to key inflation data due out this week. The broad market index fell 0.61% to close at
6,052.85, and the tech-heavy Nasdaq slid 0.62% to end at 19,736.69. The Dow Jones Industrial Average shed
240.59 points, or 0.54%, settling at 44,401.93. Nvidia shares dropped about 2.6% on the heels of a Chinese
regulator announcing that it is investigating the artificial intelligence chip darling for potentially violating the
country’s antimonopoly law. The stock has been a bellwether for the AI trade, up more than 180% in 2024.
Advanced Micro Devices, another chipmaker, closed 5.6% lower after Bank of America downgraded the
stock to neutral from buy, with the bank citing its limited market share gain potential as a result of higher
competitive risks in AI against best-of-breed NVDA’s dominance. Tech giants Meta Platforms and Netflix also
struggled. The price of bitcoin retreated as well, a sign that investors are moving away from risk-taking. The
cryptocurrency topped $100,000 for the first time ever on Wednesday evening last week. - Oil prices ease, but geopolitical risk and China policy stance check losses
Oil prices eased only slightly on Tuesday, holding on to most of their gains from the prior session as mounting
geopolitical risk after the fall of Syrian President Bashar al-Assad and China’s vow to ramp up policy
stimulus kept a floor under prices. Brent crude futures were down 13 cents, or about 0.2%, at $72.01 per
barrel. U.S. West Texas Intermediate crude futures were down 14 cents, also 0.2% lower, at $68.23 at 0151
GMT. Both climbed more than 1% on Monday. - Gold extends gain on China’s vow for policy stimulus
Gold prices extended gains on Tuesday, buoyed by top consumer China’s pledge to ramp up policy stimulus
to help spur economic growth, with investors awaiting U.S. inflation data for further insights into the Federal
Reserve’s interest rate outlook. Spot gold had gained 0.4% to $2,669.84 per ounce, as of 0248
GMT. U.S. gold futures rose 0.3% at $2,692.50. Gold hit a two-week high on Monday, supported by China’s
central bank resuming purchases after a six-month hiatus. The country will also adopt appropriately loose
monetary policy next year, alongside a more proactive fiscal policy to spur economic growth, the Politburo
was quoted as saying. - China’s November imports post surprise drop; sharpest decline in 14 months
China’s exports and imports both missed expectations in November, data from the country’s customs
authority showed Tuesday, fueling worries over the health of the Chinese economy as consumer demand
remains sluggish and tariff threats loom. Import data surprised with a decline of 3.9%, marking the sharpest
fall since September 2023. Analysts had expected imports to grow 0.3%. Exports rose 6.7% in U.S. dollar
terms from a year ago, sharply lower than the 12.7% growth in the previous month. Analysts in a Reuters poll
had expected exports to climb 8.5% from a year ago in November. Export volumes, however, are expected to
pick up again in the upcoming months, said Bruce Pang, chief economist of Greater China at JLL, given
exporters’ incentives to rush out shipments ahead of potential tariff hikes. China’s exports to all its major
trading partners, the U.S., European Union and Association of Southeast Asian Nations, all rose in November
from a year earlier. - BOJ’s Unexpected Speech Schedule Lifts January Rate Hike Views
The Bank of Japan’s unexpected scheduling of speech and press briefing before its January meeting has
increased market expectations for a rate hike next month instead of December. The central bank’s Deputy
Governor Ryozo Himino will be giving a speech to local business leaders in Yokohama followed by a press
conference on Jan. 14, the BOJ said Monday. The move is unusual, as board members haven’t held this kind
of event before the first policy meeting of the year at least since former Governor Haruhiko Kuroda began his
term in 2013. By scheduling Himino’s event before the January meeting, the BOJ will have a solid opportunity
to telegraph its thinking on monetary policy before a gathering where an increasing number of economists
are forecasting a rise in borrowing costs. The yen accelerated its drop against the dollar following news of the
event, in a sign that the market is now betting on a lower likelihood of a hike this month. - India appoints Revenue Secretary Sanjay Malhotra as new central bank governor
Sanjay Malhotra will on Tuesday take over as India’s central bank governor, taking over from Shaktikanta Das.
Malhotra is set to take over at a critical time for the world’s third-largest economy, which is attempting to
contain rising inflation without impairing growth. - UK business confidence falls to lowest level in almost two years after Labour budget
Business confidence in the U.K. fell in November to its lowest level since January 2023, fresh data from
business advisory and accountancy firm BDO showed Monday. U.K. job vacancies, meanwhile, fell last month
at the fastest rate since the start of the pandemic, according to KPMG. It comes as businesses have warned
that Labour’s pro-growth budget would push up inflation and slow hiring. - Australia’s central bank ends 2024 with a dovish pivot, jolting markets
Australia’s central bank held interest rates steady at its last meeting of the year but softened its hawkish tone
by noting the board is gaining some confidence that inflation was heading back to target. The Australian
dollar fell 0.8% to $0.6380 and there-year bond futures rallied 5 ticks to 96.26, the highest since October.
Swaps now imply there is a split chance of a rate cut in February, with a first easing more than fully priced in
by April next year. Wrapping up its December policy meeting, the Reserve Bank of Australia kept the cash
rate unchanged at 4.35% where it has been all year. The statement omitted a previous line that the RBA
Board was “not ruling anything in or out” as well as policy needing to remain restrictive. - From Trump and Turkey, to Russia and Iran, Syria’s regime change has huge global consequences
The dramatic toppling of the Syrian regime at the hands of rebel forces this weekend could have deep
ramifications not only for the Middle Eastern country, but on global geopolitics and markets too, according to
analysts. After a lightning-fast offensive over the past fortnight that saw opposition groups move across the
country, seizing key cities along the war, rebels led by the Islamist militant group Hayat Tahrir al-Sham. The
group finally seized the capital Damascus at the weekend, prompting President Bashar al-Assad to flee the
country and to reportedly to take refuge in Russia, where he has been granted asylum. - China Signals Bolder Stimulus for Next Year as Trump Returns
China’s top leaders signaled bolder economic support next year using their most direct language on stimulus
in years, as Beijing braces for a trade war when Donald Trump takes office. President Xi Jinping’s decision
making Politburo vowed to embrace a moderately loose monetary policy in 2025, according to the official
Xinhua News Agency, signaling more rate cuts ahead and shifting from a prudent strategy that’s held for
nearly 14 years. The 24-man body also pledged more proactive fiscal policy at its monthly huddle, raising
expectations for Beijing to widen the fiscal deficit from 3% at the annual parliamentary session in March. That
would open the door to more central government borrowing to shore up the faltering economy. - US Strikes ISIS Targets in Syria in Show of Force as Assad Exits
US airstrikes hit dozens of Islamic State targets in central Syria on Sunday as President Joe Biden cautioned
that Bashar al-Assad’s fall from power could open the door to a resurgence of Islamic extremism. - Oracle Posts Disappointing Growth, Denting Cloud Enthusiasm
Oracle Corp. reported quarterly revenue in line with estimates, disappointing investors who have boosted the
stock to a record high in recent weeks on enthusiasm for the company’s ascendant cloud business. The
shares fell in extended trading. Fiscal second-quarter revenue increased 9% to $14.1 billion, the company
said Monday in a statement. Sales from Oracle’s closely watched cloud infrastructure business jumped 52%
to $2.4 billion, in line with the growth projected by analysts. Oracle has long tried to find its footing in the
lucrative industry of renting computing power and storage, which is dominated by much-larger rivals led by
Amazon.com Inc.’s Amazon Web Services and Microsoft Corp. The recent success has been fueled by demand
from artificial intelligence companies seeking to train their models and marquee customers like Uber
Technologies Inc. and ByteDance Ltd.’s TikTok. Chairman Larry Ellison has focused particularly on Oracle’s
ability to provide the hardware and integrated software needed to handle powerful AI workloads. The stock
slipped about 7% in extended trading after closing at $190.45. Expectations were high for Oracle headed into
the results, with its stock jumping 81% this year. - Mondelez made a takeover approach for Hershey, sources say
Cookie and snack giant Mondelez has made a preliminary takeover approach for Hershey, according to
people familiar with the matter, a combination that would create one of the largest food and beverage
businesses in the world. Shares of the legacy chocolate maker shot up more than 10% on the news.
Mondelez made a previous takeover bid for Hershey in 2016, which the company rebuffed.
Hershey hired advisors to help it respond to the interest, said one of the people. Mondelez made the
approach shortly after Hershey reported third-quarter earnings that missed analyst expectations last month,
said the person. Hershey declined to comment on “market rumors and speculation.” Mondelez and the
Hershey Trust, which controls roughly 80% of the chocolate maker’s voting stock, did not immediately
respond to requests for comment. Bloomberg first reported Mondelez’s approach. Hershey’s stock has risen
more than 4% this year, raising its market cap to $39.19 billion. Prior to Monday’s move, shares had fallen 6%
this year, hurt by concerns about the growing usage of GLP-1 drugs and soaring cocoa prices. Share of
Mondelez fell more than 2% on Monday. The company’s stock has dropped 15% this year, dragging its
market cap down to $82.16 billion. - Comcast shares slide as much as 7.2%, the most intraday since April 25, as Comcast Cable President and
CEO Dave Watson projects broadband subscriber losses of more than 100,000 in the fourth quarter, with
hurricanes Helene and Milton causing around 10,000 broadband losses
Competition in residential broadband in 4Q remains intense, Watson adds at the UBS Global Media and
Communications Conference. Gains in average revenue per user will also be challenged in 4Q, Bloomberg
Intelligence analyst Geetha Ranganathan notes. Shares in peer Charter Communications fall as much as 7%,
while T-Mobile shares drop as much as 4.4% - Hess shares climb 1% before the bell as Wells Fargo Securities analyst Roger Read upgraded the oil
producer to overweight from equal-weight and hiked the price target to $193 from $151, saying the stock
is poised to gain whether or not Chevron is able to close its acquisition. The analyst also shuffled ratings
among oil refiners Monday morning
If the merger with Chevron doesn’t happen and HES reverts to an independent E&P valued off its unique
Guyana asset, then the net asset value supports a valuation higher than $193. If Chevron is able to buy Hess,
then the price should hit $188; Says the base case is the Chevron takeover does happen after an aribtration
case in the third quarter of 2025. Separately, Wells Fargo downgraded HF Sinclair and PBF Energy to equal
weight from overweight in a ratings shuffle among refining stocks and trimmed price targets on five names in
the subsector; The refiners are too expensive is a common investor refrain since mid-2024; HF Sinclair price
target trimmed to $45 from $53 and downgraded on continued weak performance; PBF Energy price target
cut to $34 from $39 and downgraded on continued weakness in the renewable fuels market, which poses a
slight headwind to increased earnings and returns. - BASF gains as much as 3%, the most in almost a month, following an upgrade to buy from hold at
Warburg which says not all is doom and gloom for the German chemicals firm
Analyst Oliver Schwarz writes in note that volumes are coming to BASF’s aid, with China in particular seeing
improvement from last year’s low levels. Destocking providing a boost in most customer sectors.
Government stimulus and pent-up consumer demand are also driving volumes. Given positive underlying
volume and margin trends in 4Q, there is potential for a small upside surprise as consensus currently expects
the company to miss its FY24 Ebitda target. - Mobileye Global shares gain as much as 11% after RBC Capital Markets says one of the slides it released
as part of its investor event in Munich could suggest the company is close to a nomination for a Japanese
OEM
The possibility that the company could be close to an OEM SuperVision win is a positive, analyst Tom Narayan
writes in a note to clients. Rates sector perform with PT $11. MBLY has 16 buys, 11 holds, 4 sells; avg PT $18:
data compiled by Bloomberg. - Nvidia shares fall after China opens investigation over possible violation of antimonopoly law
Nvidia shares were under pressure Monday after a regulator in China said it was investigating the chipmaker
over possible violations of the country’s antimonopoly law. Shares ended the session lower by about 2.6%.
The State Administration for Market Regulation opened an investigation into the chipmaker in relation to the
acquisition of Mellanox and some agreements made during the acquisition, the Chinese government said
Monday. Nvidia acquired the Israeli technology company that creates network solutions for data centers and
servers in 2020. - MongoDB shares jump 11% after Q3 earnings beat estimates
MongoDB’s Q3 earnings and revenue exceeded expectations, with a 22% increase in revenue to $529.4
million and non-GAAP earnings per share of $1.16, beating estimates of 67 cents. The company’s CEO
attributed the success to strong performance in its Enterprise Advance (EA) and Atlas segments. MongoDB
also provided guidance for fiscal 2025, expecting revenue between $1.973 billion and $1.977 billion and non
GAAP earnings per share between $3.01 and $3.03. Additionally, the company announced that its CFO,
Michael Gordon, will step down at the end of January and transition to an advisory role. - C3.ai Jumps on Strong Sales, Raises Full-Year Revenue Outlook
C3.ai Inc., a data-analysis software company, gained about 13% in extended trading after reporting quarterly
revenue that topped estimates and raising its full-year sales forecast. Fiscal second-quarter revenue
increased 29% to $94.3 million, the Redwood City, California-based company said Monday in a statement.
Analysts, on average, estimated $91 million. Sales in the current fiscal year will be as much as $398 million,
C3.ai said, compared with a previous forecast of as much as $395 million. The shares reached a high of $49.57
in late trading after closing at $41.68 in New York. The stock has gained 45% this year. C3.ai has been
introducing products with generative artificial intelligence, benefiting from interest in AI by corporate
customers. The company said it closed 15 generative AI-focused trials in the quarter, including with
automaker Rolls-Royce and the US Navy. Chief Executive Officer Tom Siebel pointed toward the positive
results of a deal that makes it easier for customers of Microsoft Corp.’s cloud services to use C3.ai’s software.
