- Asian Stocks Lack Direction as Fed Meeting Nears: Markets Wrap
Asian shares turned flat after a range-bound morning session, as traders braced for the Federal Reserve’s
final policy decision of the year. A gauge of regional stocks erased a 0.5% gain, with declines in Japan and
Australia offsetting strength in Hong Kong and mainland China. US futures were steady after both the S&P
500 and Nasdaq 100 shed 0.4% Tuesday. - Dow tumbles more than 260 points for 9-day losing streak, its longest since 1978
The Dow Jones Industrial Average entered the history books Tuesday with its first nine-day losing streak since 1978. The 30-stock average slid 267.58 points, or 0.61%, to settle at 43,449.90. The S&P 500 lost 0.39% and
closed at 6,050.61, while the Nasdaq Composite dropped 0.32% to end at 20,109.06. The Dow’s losing streak
began the day after it closed above 45,000 for the first time ever earlier in the month. - Oil prices little changed ahead of Fed rate decision
Oil prices traded in a narrow range early on Wednesday as investors remained cautious ahead of an expected
interest rate cut by the U.S. Federal Reserve. Brent futures inched up 12 cents, or 0.16%, to $73.31 a barrel
by 0134 GMT, while U.S. West Texas Intermediate crude rose 11 cents, or 0.16%, to $70.19 a barrel. The Fed
on Wednesday is widely expected to cut interest rates for the third time since its policy easing cycle began.
More important for the oil market will be any comments on interest rate moves in 2025, analysts say. - Gold prices edge higher with focus on Fed’s policy decision
Gold prices edged higher on Wednesday as attention turned to the Federal Reserve’s upcoming monetary
policy decision, with the U.S. central bank anticipated to implement a third rate cut this year and provide
insights into its plans for 2025. Spot gold nudged 0.1% higher to $2,648.43 per ounce by 0237 GMT. U.S. gold
futures were flat at $2,663.20. The U.S. Fed began its two-day policy meeting on Tuesday, with focus on the
central bank’s updated economic projections and the dot plot, which could alter expectations for the rate
trajectory through 2025 and 2026. U.S. retail sales increased more than expected in November, adding to
warmer inflation readings in recent months and suggesting that the central bank could pause rate reduction
in January. - US Retail Sales Strengthen on Jump in Motor Vehicle Purchases
US retail sales increased at a firm pace in November, bolstered by a surge in car purchases and solid online
shopping that masked more mixed spending elsewhere. The value of retail purchases, not adjusted for
inflation, increased 0.7% after upward revisions to the prior two months, Census Bureau data showed
Tuesday. Excluding autos, sales climbed a more modest 0.2% for a second month. - Hong Kong records first rise in new listings since 2020, as Beijing’s policy pivot refuels optimism
Hong Kong stock exchange saw new listings jump for the first time after three consecutive years of declines,
in terms of deal values. Despite some signs of life, only when we see continued improvement in the onshore
economy and geopolitical tensions continue to soften can one expect a further pickup in Hong Kong’s IPO
activities, said Andy Maynard, managing director and head of equities at China Renaissance. - Congress to vote on new restrictions on U.S. investment in China
Congress is set to vote in the coming days on legislation restricting U.S. investments in China as part of a bill
to fund government operations through mid-March, lawmakers said late on Tuesday. In October, the
Treasury finalized rules effective Jan. 2 that will limit U.S. investments in artificial intelligence and other
technology sectors in China that could threaten U.S. national security. The bill expands on those restrictions
and also includes other provisions aimed at concerns about China, including a requirement to study national
security risks posed by Chinese-made consumer routers and modems and mandate reviews of Chinese real
estate purchases near additional national security sensitive sites. The Chinese Embassy in Washington did not
immediately comment. - Germany’s auto giants were already reeling. Now Trump wants to turn them into American companies
President-elect Donald Trump’s pledge to impose a blanket tariff on all goods coming into the U.S. could
wreak havoc for European carmakers. For Germany, the prospect of U.S. tariffs on European autos comes at a
time when it’s top original equipment manufacturers, or OEMs, are already reeling. Rico Luman, senior sector
economist for transport and logistics at Dutch bank ING, said Germany’s auto sector appears to be
significantly exposed to Trump’s tariff threats. - Cocoa prices climb to new record high, prompting fresh warnings about extreme volatility
The price of chocolate’s key ingredient has skyrocketed this year, prompting analysts to issue fresh warnings
about extreme price volatility. Cocoa futures for March delivery in New York traded 1% higher at $11,938 per
metric ton at around 7:10 a.m. ET on Tuesday, notching yet another record high. It comes amid renewed
concerns over adverse weather conditions and supply tightness in West Africa, home to around three
quarters of the world’s cocoa production. - Pfizer shares rose 4.7% after the drugmaker’s 2025 guidance midpoint for adjusted EPS exceeded the
average analyst estimate
2025 YEAR FORECAST: Sees adjusted EPS $2.80 to $3.00, estimate $2.89. Sees revenue $61.0 billion to $64.0
billion, estimate $63.23 billion. BMO Capital Markets, Evan David Seigerman (outperform): Says the guidance
balances conservatism with achievability and leaves room for modest upgrades throughout the year. While
total revenue guidance may be lower than expectations, we anticipate indicated EPS growth will be good
enough for investors and could drive share upside. Citi, Geoff Meacham (neutral): Notes the EPS guidance is
in line with sell-side consensus expectations, but 10-15% higher than buy-side expectations. While company
is on a right path to get back to growth, we see continued near-term pressure from IRA / Part D redesign
changes and loss of exclusivity. - Teva Pharmaceutical Industries Ltd. and Sanofi SA’s experimental drug for inflammatory bowel disease
helped patients more than expected in a mid-stage trial, the drugmakers said
The treatment called duvakitug was tested in patients with ulcerative colitis or Crohn’s disease. For patients
with ulcerative colitis taking a low dose, 36.2% achieved clinical remission, while 47.8% on the higher dose
met this criteria. This compares with 20.5% of patients taking placebo who went into remission. The rate of
endoscopic response for patients with Crohn’s disease was also much higher than for those taking the
placebo, the companies said, adding that the drug was also generally well-tolerated. Endoscopic response
looks at whether the severity of a patient’s Crohn’s disease is impacted. Teva ADRs rose 26.5% with Chief
Executive Officer Richard Francis calling the results transformative on a call with analysts. Sanofi shares rose
3.3%. Duvakitug belongs to a class of monoclonal antibodies called anti-TL1As because they target that
protein, which is believed to play a role in bowel inflammation as well as asthma. Other companies
developing compounds from this class include Merck & Co. and Pfizer Inc. Sanofi agreed to pay Teva as much
as $1.5 billion to help develop and sell the medicine in 2023. - Honda Motor Co. and Nissan Motor Co. are exploring a potential merger, according to people familiar
with the matter, which would create a singular rival to Toyota Motor Corp. in Japan and better position the
combined company to face competitive challenges around the world
Honda is considering several options including a merger, capital tie-up or the establishment of a holding
company, Executive Vice President Shinji Aoyama said on Wednesday, following reports overnight of talks
between the carmakers. Nissan shares rose as much as 24% in early trading on Wednesday, while Honda’s
stock fell as much as 3.4%. The two have been holding preliminary talks about a combination, said the
people, who asked not to be identified because discussions are private. One option being considered is the
creation of a new holding company under which the combined businesses would operate, one of the people
said. The transaction could also be expanded to include Mitsubishi Motors Corp., which already has capital
ties with Nissan, the person said. Discussions are early stage and may not lead to an agreement, the people
said. A deal would effectively consolidate the Japanese auto industry into two main camps: One controlled by
Honda, Nissan and Mitsubishi and another consisting of Toyota group companies (Toyota has taken stakes in
Subaru, Suzuki, and Mazda). It would also provide them with more resources to compete with larger peers
globally after downsizing long-held partnerships with other carmakers. Nissan has loosened ties with France’s
Renault SA and Honda has backed away from General Motors Co. The move toward a merger would follow a
decision by the two companies earlier this year to work together on electric vehicle batteries and software.
At that time, Honda Chief Executive Officer Toshihiro Mibe floated the possibility of a capital tie-up with
Nissan. - Nvidia falls deeper into correction territory, Broadcom reverses earlier gains to tick lower
Nvidia shares closed down more than 1% on Tuesday, as Broadcom shares reversed earlier gains to also move
lower. On Monday, Nvidia entered correction territory, broadly defined as the point when a stock falls 10% or
more from an all-time high close. Nvidia hit its closing high of $148.88 last month. After initial rising in trading
before the bell, Broadcom shares closed down 4%. Still, over the past five days the two names have been on
diverging paths with Broadcom shares rallying while Nvidia shares slipped. Bullishness around Broadcom has
been fueled by the company’s release last week of fiscal fourth-quarter earnings that exceeded expectations
and a revenue outlook for the current quarter that beat forecasts. A number of Wall Street brokers, including
Goldman Sachs, have raised their price targets on Broadcom’s stock recently.
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