- Asian Stocks Fall on China Policy Readout, Dollar: Markets Wrap
Asian equities fell Friday as a lack of details from a Chinese economic conference disappointed some traders
and risk appetite weakened ahead of next week’s Federal Reserve meeting. Japanese and Australian shares
declined after selling on Wall Street hit stocks and government bonds Thursday. A gauge of Asian stocks is
headed for the worst week in nearly a month. The S&P 500 ended 0.5% down as traders weighed higher
than-expected jobless claims against too-hot producer price data. Shares in China and Hong Kong slipped
following a readout from China’s Central Economic Work Conference that lacked policy details and fresh
measures. Top officials vowed to raise the fiscal deficit target next year following the two-day conference. - Dow falls more than 200 points after warm inflation report, Nasdaq retreats from record
Stocks fell Thursday, weighed down by a hotter-than-expected U.S. inflation report, as tech shares failed to
keep the momentum seen earlier in the week. The tech-heavy Nasdaq Composite slid 0.66%, dipping back
below the 20,000 threshold to end at 19,902.84. The broad market S&P 500 shed 0.54% to close at 6,051.25.
The Dow Jones Industrial Average lost 234.44 points, or 0.53%, to settle at 43,914.12. It was the 30-stock
index’s sixth straight losing day. Tech names were among the notable decliners, with Nvidia losing more than
1%. Software giant Adobe declined more than 13% following the company’s weaker-than-expected 2025
outlook. Meta Platforms, Alphabet and Amazon ended the session lower as well. The producer price index,
which tracks wholesale prices, increased 0.4% last month. Economists polled by Dow Jones expected a 0.2%
increase on a monthly basis. The 10-year Treasury yield jumped to the highest level in two weeks following
the data. - Oil edges lower as IEA surplus forecast offsets rate cut optimism
Oil prices fell slightly Thursday as a forecast for ample supply in the oil market offset optimism stemming
from rising expectations of a U.S. interest rate cut. Brent crude futures fell 11 cents to close at $73.41 a
barrel. U.S. West Texas Intermediate crude futures declined 27 cents to settle at $70.02. Both benchmarks
rose by more than $1 on Wednesday. The International Energy Agency said it expected the oil market to be
comfortably supplied next year, even as it revised its demand outlook for next year up slightly. OPEC cut its
demand growth forecast for 2024 for the fifth straight month on Wednesday and by the largest amount yet. - Gold slides from 5-week high, down over 1% on profit-taking
Gold slipped over 1% on Thursday as investors booked profits after it briefly reached a five-week high earlier
in the session and squared positions ahead of a U.S. Federal Reserve meeting next week. Spot gold lost 1.2%
at $2,684.32 per ounce by 12:36 p.m. ET (1735 GMT), while U.S. gold futures eased 1.7% to $2,709.70. Bullion
climbed to its highest level since Nov. 6 earlier in the session. - European Central Bank cuts interest rates by a quarter point in fourth trim of the year
The European Central Bank on Thursday announced its fourth interest rate cut of 2024, confirming
expectations for a quarter-percentage-point move and lowering its inflation forecast for this and next year.
It takes the deposit facility, the ECB’s key rate, to 3%. The deposit facility had been held at 4% since Sept.
2023, prior to the first cut of the current easing cycle in June 2024. The disinflation process is well on track,
the central bank said in a statement on Thursday. The ECB also removed its repeated message that it needs
to keep policy rates sufficiently restrictive for as long as necessary, which was being closely-watched by
traders as a sign of a dovish tilt. Quarterly staff macroeconomic projections meanwhile lowered the ECB’s
inflation forecast for 2024 to 2.4% from 2.5%. The inflation outlook for 2025 was also taken down to 2.1%
from 2.2%. - India’s inflation slows from 14-month high, raising hopes of interest rate cut under new governor
It also comes after the RBI held rates at 6.5% during its latest monetary policy meeting last week, despite a
surprise slowdown in economic growth. India’s economy expanded by just 5.4% in its second fiscal quarter
ending September, well below estimates by economists and close to a two-year low. - China stresses plans to boost growth at top agenda-setting meeting
China held its annual economic work conference on Wednesday and Thursday, according to a daily evening
news broadcast on state-run CCTV. Top leaders affirmed the recent policy shift, including plans to increase
the fiscal deficit next year and implement moderately loose monetary policy. China typically announces the
full-year growth target and fiscal deficit at an annual parliamentary meeting in March. - South Korea Support for Yoon Hits Record Low Before Key Impeachment Vote
South Korean President Yoon Suk Yeol’s approval rating slid to its lowest level since he took office as he tried
to defend his declaration of martial law and push back against efforts to oust him via impeachment. The
support rate for Yoon dropped to 11% in a weekly tracking poll released Friday by Gallup Korea, down 5%
percentage points from last week’s survey. Three-quarters of respondents said the president should be
impeached. The survey was released after South Korea’s opposition bloc filed a second impeachment motion
against Yoon on Thursday. The chances of its passage appear higher than the previous vote as more
lawmakers from Yoon’s own People Power Party have indicated they will support the motion. - China Economy Forecast to Maintain Growth as Stimulus Kicks In
China’s economy likely maintained momentum last month, with early indicators pointing to further
stabilization as a broad package of stimulus measures took effect. Industrial output and retail sales are
expected to have grown at the same if not slightly faster pace in November compared to October, according
to forecasts by economists in a Bloomberg survey. The data are due Monday. - Wholesale prices rose 0.4% in November, more than expected
The producer price index increased 0.4% for November, higher than the Dow Jones consensus estimate for
0.2%. However, excluding food and energy, core PPI increased 0.2%, meeting the forecast. First-time claims
for unemployment insurance totaled a seasonally adjusted 242,000 for the week ending Dec. 7, versus the
220,000 forecast and up 17,000 from the prior period. - Broadcom rallied 14% in afterhours trading after predicting a boom in demand for its artificial
intelligence chips
Sales of AI products will gain 65% in the fiscal first quarter, far faster than its overall semiconductor growth of
about 10%, the company said. The chipmaker also predicted that the addressable market for AI components
that it designs for data center operators would reach as high as $90 billion by fiscal 2027. Like Nvidia Corp.,
Broadcom is positioning itself to be a major beneficiary of the AI spending frenzy. And Chief Executive
Officer Hock Tan said his company had won two major new hyperscaler customers. Investors have piled into
Broadcom’s stock this year, lured by AI optimism. The company had predicted that it would get more than
$10 billion in annual revenue from that market, outpacing other parts of its business. Ultimately, the number
reached $12.2 billion in the last fiscal year. AI revenue grew 220% during the year, fueled by demand for
processors and networking components, Tan said. Demand for non-AI chips, meanwhile, will be down in the
first quarter. Total sales will be $14.6 billion in the period, which runs through January, in line with estimates.
Profit was $1.42 a share in the fourth quarter. Revenue rose to nearly $14.1 billion in the period, which
ended Nov. 3. Analysts had estimated $1.39 a share in earnings and revenue of $14.1 billion. - Kroger shares rose 3.2% after the supermarket company said it was resuming share buybacks after its
failed merger with Albertsons. The company’s board approved a new program of up to $7.5 billion shares
Evercore ISI (outperform, PT $70): This is the big buyback that we had been waiting for and then some and
we are pleased to see this come in ahead. Oppenheimer (perform): Recent developments are a positive,
removing a key overhang for shares, and KR management has executed quite well in a difficult grocery
backdrop. - Warner Bros. Discovery Inc. is reorganizing into two divisions, one focused on streaming and studios
and the other on cable TV networks, a move that positions the company for future dealmaking
The media company, the parent of CNN and TNT, announced it’s creating a Global Linear Networks division
for its cable channels in news, sports, and scripted and unscripted programming. A new Streaming & Studios
unit will be home to online video operations like Max, the HBO cable business and the Warner Bros. film and
entertainment studios. Our new corporate structure better aligns our organization and enhances our
flexibility with potential future strategic opportunities across an evolving media landscape, Warner Bros.
Chief Executive Officer David Zaslav said. Shares of Warner Bros. rose 15.4%. - Lonza shares rose 4.9% after the health care group announced that it would divest from its capsule
business at an appropriate time
Lonza plans to focus on its core CDMO business and will exit Capsules & Health Ingredients (CHI) business at
the appropriate time and in the best interest of shareholders and stakeholders. CDMO business will be
structured into 3 new business platforms: Integrated Biologics, Advanced Synthesis, and Specialized
Modalities. Full-Year Outlook 2024 confirmed at flat CER sales growth and a Core Ebitda margin in high
twenties (27%–29%). Lonza CDMO FY outlook 2025: approaching 20% sales growth in CER, including around
CHF0.5 billion sales from Vacaville, and Core Ebitda margin approaching 30%.
