- Asian Stocks Rise After US Tech Rally; Honda Jumps: Markets Wrap
Stocks in Asia gained in relatively thin holiday trading, driven by a rally in region’s tech firms after some of the
world’s largest technology companies boosted US benchmarks on Monday. Mainland China and Hong Kong
equities led gains, while stocks edged lower in South Korea. Taiwan Semiconductor Manufacturing Co. shares
touched a new record high, while Honda Motor Co. jumped after announcing a share buyback plan. US equity
futures steadied in Asia after a gauge of the “Magnificent Seven” technology megacaps climbed on Wall
Street. - S&P 500 closes higher to begin holiday week, tech stocks lead the advance
Stocks rose on Monday to start a holiday-shortened trading week as the continuous strength in technology
names helped the broader market. The S&P 500 gained 0.73% to 5,974.07. The tech-heavy Nasdaq
Composite rose 0.98% to 19,764.89, as Tesla and Meta Platforms added more than 2% and Nvidia climbed
more than 3%. The Dow Jones Industrial Average erased earlier losses and ended the day 66.69 points higher,
or 0.16%, to 42,906.95. - Oil prices up in thin pre-Christmas trade
Oil prices were up on Tuesday in thin trade ahead of the Christmas Day holiday, with prices supported by U.S.
economic data and rising oil demand in India, the world’s third-largest oil importer. Brent crude futures were
up 33 cents, or 0.45%, to $72.95 a barrel and U.S. West Texas Intermediate crude futures rose 29 cents, or
0.42%, to $69.53 a barrel at 0114 GMT. New orders for key U.S.-manufactured capital goods surged in
November amid strong demand for machinery, while new home sales also rebounded in a sign that the U.S.
economy is on a solid footing towards the year-end. The United States is the world’s top oil consumer. In the
shorter term, traders are looking for indications of U.S. demand from the crude oil and fuel stockpiles data
due from the American Petroleum Institute industry group later on Tuesday. - Gold rises in holiday-truncated week; Fed’s 2025 outlook weighs
Gold prices edged higher on Tuesday, as investors braced for a less aggressive path of interest rate cuts from
the Federal Reserve next year, in a holiday-truncated trading week. Spot gold ticked up 0.1% to $2,616.13 per
ounce, as of 0307 GMT. U.S. gold futures steadied at $2,629.80. Trading volumes will likely thin out as the
year-end approaches. Investors are now focused on how rapidly or deeply the U.S. central bank would cut
rates in 2025. The Fed continued reductions in December after a period of aggressive rate hikes but signaled
fewer cuts next year. Higher rates dull non-yielding bullion’s appeal. While a benign U.S. inflation reading on
Friday eased some concerns about the pace of cuts next year, markets are still pricing in just about 35 basis
points worth of easing for 2025. - France’s Bayrou Wants Deal That Brings Deficit Down to Almost 5%
French Prime Minister Francois Bayrou said he aimed to reach an agreement with parliament on a 2025
budget that would reduce the country’s deficit to close to 5%, near the level his predecessor unsuccessfully
tried to reach. Bayrou said any budget agreement would need to be balanced and not only target companies,
which he termed a “national treasure.” The premier, who was appointed this month after the collapse of
Michel Barnier’s government, added that his goal is to finalize the budget by mid-February. - Fed Seeks to Smooth Capital Changes in Bank Stress Tests
The US Federal Reserve will overhaul its stress tests of big US banks to smooth out changes in required
capital levels from year to year under a proposal outlined by the central bank on Monday. Results from the
annual health check-up, which seek to gauge how lenders would fare during a hypothetical recession, would
be averaged over two years, and the central bank would solicit public comment on the hypothetical scenarios
each year before they’re finalized, the Fed said in its release. - Bank of Canada Officials Viewed Second Jumbo Cut as ‘Close Call’
Bank of Canada officials acknowledged their decision to cut interest rates by half a percentage point for a
second consecutive meeting was a “close call,” with some policymakers initially tilting toward a smaller
reduction in borrowing costs. Some members of the central bank’s governing council suggested a quarter
percentage-point cut would be the best move, allowing time to weigh the impact of rate cuts since June,
which had already led to stronger consumption and housing activity. - Britain’s economy flatlined in the third quarter, revised figures show
Revised figures from the U.K.’s Office for National Statistics on Monday showed GDP did not grow at all in the
three months to September. An earlier estimate had put GDP growth at 0.1% for the third quarter of the
year. The British pound was trading lower against the U.S. dollar on Monday morning. - Starmer Is Deepening China Ties While the UK’s Allies Turn Away
UK Prime Minister Keir Starmer’s pursuit of closer ties with China has raised private questions from Donald
Trump’s incoming administration, European diplomats and even some senior British officials. It’s a courtship
that risks leaving Starmer isolated among his allies. Last month, he became the first British premier to meet
with President Xi Jinping for seven years and next month Chancellor of the Exchequer Rachel Reeves is due to
meet top officials in Beijing early with priorities that include deepening financial ties between Shanghai and
the City of London. - Trump Efficiency Co-Chief Elon Musk Calls Fed ‘Overstaffed’
Elon Musk, the billionaire tasked with making the US government more efficient come January, has zeroed in
on the Federal Reserve. The central bank in charge of protecting the world’s largest economy is “absurdly
overstaffed,” Musk wrote on social-media platform X. The remarks were part of a thread that began with
another individual posting about the Fed’s latest policy decision. Musk, a prolific social-media commentator,
didn’t expand on the remark.interest is even stretching into 2026. With nearly two-thirds of 2025 already
booked, we are expecting another year of strong yield improvement, outpacing historical growth rates, Chief
Executive Officer Josh Weinstein said. Share prices across the cruise industry jumped on the news, with
Carnival rising 6.4%. - Honda and Nissan officially begin merger talks to create world’s third-largest automaker
Japanese automakers Nissan and Honda on Monday announced they had entered into official talks to merge
and create the world’s third-largest automaker by sales. In a news conference on Monday, Honda CEO
Toshihiro Mibe said the companies needed greater scale to compete in the development of new technologies
in electric vehicles and intelligent driving. A business integration would give the companies an “edge that will
not be possible under the current collaboration framework,” Mibe said, according to a translation. The deal
would aim to share intelligence and resources and deliver economies of scale and synergies while protecting
both brands, he said. A holding company would be formed as the parent company of both Honda and Nissan,
listed on the Tokyo Stock Exchange. The larger Honda will nominate most of the integrated entity’s board
members. The merged group has the potential to deliver revenue of 30 trillion yen ($191.4 billion) and
operating profit of more than 3 trillion yen, he said. Honda reported 1.382 trillion yen in operating profit for
the full year to March 2024, versus Nissan’s 568.7 billion yen. The companies would have a combined value
of nearly $54 billion, with Honda’s market capitalization contributing the greater $43 billion share.
Discussions are set to conclude in June 2025. - Eli Lilly’s weight-loss shot Zepbound won approval in the US as the first drug to treat sleep apnea,
opening the door for broader insurance coverage of the blockbuster medicine
The drug was cleared for people with moderate to severe obstructive sleep apnea and obesity, and should be
used in conjunction with diet and exercise, the company said. The drug’s benefit likely stems from the
patients’ weight loss, the Food and Drug Administration said. Sleep apnea is a breathing disorder often tied
to obesity that affects more than 23 million American adults. Treatment typically involves opening the
airways with the use of breathing machines and masks, or implants. While there are medicines that ease
drowsiness associated with the condition, Zepbound is the first drug to address the underlying disease. “This
is a major step forward for patients with obstructive sleep apnea,” Sally Seymour, director of the FDA’s
division of pulmonology, allergy, and critical care, said in a statement. “Today’s approval marks the first drug
treatment option” for the condition, she said. The approval could make it easier for some people to get
Zepbound. Medicare, the government’s insurance program for the elderly, doesn’t pay for weight loss drugs,
though the Biden administration has proposed changing that. It also gives Lilly more ammunition in its
competition with Novo Nordisk A/S, whose obesity drug, Wegovy, is covered by Medicare prescription drug
plans for some patients with heart-related conditions. Novo has said it may study a next-generation weight
loss drug for sleep apnea, but it’s not testing whether Wegovy or its diabetes medicine Ozempic help with the
condition. - The Nordstrom family is joining forces with a Mexican retailer to take its namesake department store
private in an all-cash transaction valued at about $6.25 billion, including debt
The founding family is betting that the century-old retail chain will be more successful without the scrutiny
and demands of the public market after shares in Nordstrom Inc. plunged 40% in the last five years. During
the same period, the Russell 1000 Index rose more than 80%. As part of the transaction, which is expected to
close in the first half of 2025, the family and Mexican department-store chain El Puerto de Liverpool SAB will
acquire all of the outstanding common shares of Nordstrom. The Nordstrom family will have a majority
ownership stake in the company of 50.1%, with Liverpool owning 49.9%. Nordstrom common shareholders
will receive $24.25 in cash for each share of Nordstrom common stock they hold under the terms of the
agreement, the company said. That’s roughly in line with where shares were trading after the deal was
announced. - Xerox has agreed to buy printer maker Lexmark International Inc. from a consortium of Asian investors
in a deal valued at $1.5 billion
The transaction includes debt and other liabilities that Xerox will assume from current owners Ninestar Corp.,
PAG Asia Capital and Shanghai Shouda Investment Centre. Xerox will cut its annual dividend to 50 cents a
share from $1 to help finance the takeover. The deal is expected to close in the second half of 2025, pending
approval from US and Chinese regulators. Acquiring Lexmark will bring manufacturing in-house and improve
exposure to markets in Asia and Latin America, Chief Executive Officer Steven Bandrowczak said. Lexmark,
spun off in 1991 by International Business Machines Corp., is already a partner and supplier to Xerox. More
than $200 million in annual cost savings are expected for the combined company by reducing sales and
marketing expenses or from real estate consolidation. Xerox will also be able to save money by pooling
procurement and buying toner in bulk. Shares of Xerox gained 12.6%. - MicroStrategy rides ‘red sweep’ to 477% gain in 2024, topping almost all U.S. stocks
MicroStrategy was already one of the hottest stocks on the planet, but the rally intensified after Donald
Trump’s election victory in November. Of the 439,000 bitcoins the company owns, more than one-third have
been purchased since the election. “With the red sweep, bitcoin is surging up with tail winds,” MicroStrategy
founder Michael Saylor told CNBC.
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