- Asian Stocks Fluctuate Before Key Rate Decisions: Markets Wrap
Asian equities fluctuated as traders awaited a raft of interest-rate decisions by central banks this week,
including the Federal Reserve. A key stock benchmark for the region traded in a tight range, with Australia
rising. Shares in mainland China eked out a gain while those in Hong Kong fell, as Reuters reported that
Beijing plans to target 2025 gross domestic product growth of around 5%. Contracts for US equities were
steady during Asia trading after the Nasdaq 100 gained more than 1% to reach another record high. - Dow falls for an eighth day ahead of Fed, but Nasdaq notches another record
The Nasdaq Composite rose to a record, aided by a rally in tech, as investors awaited the Federal Reserve’s
policy meeting. The tech-heavy index gained 1.24% to 20,173.89, while the S&P 500 added 0.38%, closing at
6,074.08. The Dow Jones Industrial Average underperformed, losing 110.58 points, or 0.25%, to end at
43,717.48. The 30-stock Dow fell for an eighth day, marking its longest run of losses since 2018. - Oil prices in holding pattern ahead of Federal Reserve decision
Oil prices were range-bound in early Asian trading on Tuesday as investors worried about Chinese demand
and awaited further market direction from a U.S. interest rate decision due on Wednesday. U.S. West Texas
Intermediate crude was down 6 cents at $70.65 a barrel at 0112 GMT, while Brent crude futures fell 1 cent to
$73.90 a barrel. Prices were “weighed on by profit-taking after last week’s 6% rally and a batch of
disappointing Chinese economic data yesterday,” IG market analyst Tony Sycamore said. - Gold gains as U.S. dollar eases ahead of Fed policy meeting
Spot gold prices gained on Monday, supported by ongoing geopolitical concerns and a softer dollar, as
markets awaited the Federal Reserve’s policy meeting, where a third rate cut and clues on the 2025 outlook
are expected. Spot gold was up 0.2% at $2,654.27 per ounce. U.S. gold futures settled 0.2% lower at $2,670. - China’s Investment Bankers Struggle With Low Pay, Few Deals and Fear of Arrests
Investment bankers in China are struggling to stay relevant after a tough year for deal-making, deep pay cuts,
and widening regulatory probes that have sent a chill through the once-vibrant industry. While their peers on
Wall Street are looking forward to bigger bonuses for the first time since 2021, Chinese bankers are bracing
themselves for a third consecutive year of little or no extra payouts. A stock market rally in September
sparked by Beijing’s economic stimulus plans raised hopes of a revival in capital markets deals, but the
euphoria has ebbed. Revenue remains lackluster for investment banks that earn fees from brokering mergers
and acquisitions and helping companies sell shares and bonds. - Scholz Vows Investment Boom as Germany Heads for an Election
German Chancellor Olaf Scholz called for massive new investment into infrastructure and defense, hitting on
key campaign themes ahead of a vote in parliament on Monday that will pave the way for a snap federal
election in just over two months. The Social Democrat, who’s run Europe’s biggest economy since late 2021,
is using a quirk in the constitution to force a national ballot on Feb. 23, seven months earlier than the
scheduled end of his term. It’s only the sixth time since World War II the confidence-vote mechanism has
been invoked. - France’s new prime minister gets a baptism of fire after surprise Moody’s downgrade
Credit rating agency Moody’s announced on Saturday that it was cutting France’s rating to “Aa3” from “Aa2″
with a stable outlook, citing concerns over political fragmentation. Traders have reacted negatively to the
downgrade, with France’s CAC 40 down 0.7% Monday morning. Meanwhile, the yield on the country’s
benchmark 10-year bond was trading at 3.03%, only a little below that of its Greek counterpart, at 3.09%.
Analysts say Francois Bayrou’s longstanding position in French politics could help when it comes to renewed
attempts to get lawmakers to agree to a 2025 budget, although it’s unclear how he will do this. - Bank of Japan expected to keep rates on hold this week
A slim majority of economists, 13 out of 24, polled by CNBC expects the Bank of Japan to stand pat after its
two-day policy meeting ends on Thursday.,The same majority predicts the central bank will raise rates in
January. Analysts see the yen strengthening to 147.4 against the U.S. dollar by end-2025 from around 154
currently. - South Korean court begins review of president Yoon’s impeachment case
South Korea’s Constitutional Court has started reviewing President Yoon Suk Yeol’s impeachment case, while
investigators reportedly plan to question him this week over his shock martial law declaration. Judges began
their deliberations on Monday and the first preparatory hearing will be held on December 27th, according to
court officials. Meanwhile, South Korea’s joint investigation team will ask Yoon to appear on Wednesday for
questioning over alleged insurrection and power abuse, Yonhap News reported. The parliament voted on
Saturday to impeach Yoon, suspending him from his duties after his brief martial law declaration on Dec 3rd
plunged the country into political turmoil. The motion passed after the opposition secured enough support
from members of the ruling party. Prime Minister Han Duck-soo became the acting president. - Softbank CEO Masayoshi Son to announce $100 billion investment in U.S. during visit with Trump
Softbank CEO Masayoshi Son will announce a $100 billion investment in the U.S. over the next four years
during a Monday visit to President-elect Donald Trump’s residence Mar-a-Lago in Palm Beach, Florida,
sources told CNBC’s Sara Eisen. - MicroStrategy shares jump as bitcoin proxy will join Nasdaq-100 index and ‘QQQ’ ETF
Shares of MicroStrategy were higher Monday after Nasdaq announced the bitcoin proxy will join the tech
heavy Nasdaq-100 index. The stock last traded more than 5% higher in premarket trading. Nasdaq rebalances
its Nasdaq-100 index every year. The companies flagged for inclusion are mostly based on the market cap
rankings as of the final trading day of November. The stocks also need to meet liquidity requirement and
have a certain number of free-floating shares. The index inclusion, which takes effect Dec. 23, comes after
MicroStrategy’s massive surge this year. In 2024, the stock is up 547% — far outpacing the S&P 500′s 26.9%
advance — as the price of bitcoin scales to all-time highs. Bitcoin last traded around $104,650, up more than
1% on the day. - Novo Nordisk shares rose 3.1% after the Danish drugmaker said it can advance with its acquisition of
factories from contract development and manufacturing organization Catalent
The parties are free to close the transaction after all regulatory conditions were fulfilled, Novo said. The deal
approval is a very significant positive, Intron Health analyst Naresh Chouhan (buy) writes. Intron says securing
imminent manufacturing capacity is almost as important as the CagriSema trial results. Sees any biosimilar
players who were considering making a material investment into injectable semaglutide biosimilars will
downgrade their plans because of the Catalent deal. - Honeywell is exploring a separation of its aerospace business as the industrial company faces calls from
activist Elliott Investment Management for a breakup
The potential move is under consideration as part of a broader review started earlier this year, Honeywell
said. The company plans to provide an update on the effort with its fourth-quarter earnings report.
Offloading the aerospace operations, which accounted for more than a third of Honeywell’s revenue last
year, would extend the significant portfolio changes under Chief Executive Officer Vimal Kapur. Since taking
the helm last year, he has sought to boost the underperforming stock in part through refocusing the
company around aerospace, energy transition and automation systems for buildings and factories. Elliott
pushed further last month when it revealed a $5 billion-plus position in Honeywell, its largest-ever
investment in a single stock, and encouraged management to separate into two standalone companies, one
focused on aerospace and the other on automation. A number of industrial conglomerates including General
Electric Co. have split apart in recent years in an effort to simplify their businesses and boost investor returns.
While Honeywell hasn’t finalized a plan for aerospace, committing to providing an update at earnings
suggests a larger breakup is likely, Barclays analyst Julian Mitchell said. Honeywell is clearly stating its
willingness to contemplate bigger strategic moves. Honeywell’s shares rose 3.7%. - Ford shares fell 3.8% on Monday as Jefferies cut its recommendation on the automaker to
underperform from hold, citing broad concerns ranging from inventory overhang to looming strategic
decisions on the company’s European presence
Analyst Philippe Houchois also flagged a widening gap between warranty provisions and related cash
outflows. Ford faces many difficult decisions in upcoming quarters including, re-sizing if not exiting Europe
and executing a yet-to-be announced electrification strategy. PT set to $9, implies a 13% decrease from last
close. - Shares of pharmacy benefit managers fell Monday after President-elect Donald Trump said he plans to
knock out drug-industry middlemen, a sign the sector isn’t likely to see relief from political scrutiny during
his administration
CVS Health Corp. shares fell 5.6%, UnitedHealth Group Inc. dropped 4.2%, and Cigna Group shares dropped
3.1% after the comments. The companies own the largest prescription drug middlemen, businesses that have
been blamed by both Republicans and Democrats for driving up the cost of medicine. We have a thing called
the middleman, Trump told reporters on Monday. You know the middleman, right? The horrible middleman
that makes more money frankly than the drug companies, and they don’t do anything except they’re a
middleman, he said. We’re going to knock out the middleman. - Broadcom jumps 11%, extending record run as Goldman expresses ‘higher conviction’
After topping $1 trillion in market cap last week, Broadcom rallied further on Monday. Analysts at Goldman
Sachs raised their price target on the stock to $240 from $190, adding that they have “higher conviction” on
the company’s outlook. The stock is now up 126% for the year.
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