Awaiting Nvidia's Q3 Report, Bitcoin Rise, Company News, and Geopolitics
Stock market news
• Trading in Asia was quiet as everyone awaited earnings results from AI darling Nvidia, the world's most valuable company with a market cap of $3.6 trillion. Expectations are high given its shares have already risen 5% overnight. Options trading points to a swing of nearly $300 billion in market value, setting up a potentially chaotic trading session ahead.
• The US stock market traded mixed yesterday. NVDA, WMT, TSLA, NFLX and a number of other stories rose in price, which helped the Nasdaq 100 add 1%. But Value stocks mostly declined, which led to a slight minus in the DJI 30 index. Nuclear threats from Russia led to an increase in the VIX.
Calm markets in the morning. Bitcoin updated $94 thousand yesterday, but in the morning it returned to $92 thousand. And other crypto is trading flat.
The market is waiting for the NVDA report today after stock trading.
• Stocks were mixed in Asia, with Japan lagging behind with a 0.4% decline. Wall Street futures were mostly steady, and European stock futures also pointed to a muted start to markets.
• Investors were alarmed by Ukraine’s use of US missiles to strike Russia as Russia lowered its threshold for a possible nuclear strike, though those fears appeared to have eased somewhat. Bitcoin rose above $94,000 for the first time on expectations that US President-elect Donald Trump’s administration will be friendly to cryptocurrencies. Trump has yet to announce his choice for Treasury Secretary, but that could happen as early as Wednesday. UK inflation data for October is due out before Nvidia’s move, and any positive surprises there could add to recent signs that global disinflationary momentum may have stalled.
• Canadian inflation accelerated back above 2% as investors downplayed the chances of another overly generous half-point rate cut from the Bank of Canada in December. Traders are not even sure whether the Federal Reserve will cut rates by 25 basis points next month.
• Economists expect core UK CPI to rise 0.3% month-on-month, pushing the annual rate up to 3.1% from 2.9% the previous month. Headline inflation is likely to jump to 2.2% from 1.9% previously. As for the Bank of England, markets are already pricing in a gradual approach to future easing – about one cut per quarter – after Chancellor Rachel Reeves planned big spending.
• Several Fed officials are also scheduled to speak this evening, as is European Central Bank President Christine Lagarde. All of the speeches will be worth watching to see how far interest rates in Europe and the US might move in opposite directions.
• European stock markets fell after the update of Russia's nuclear doctrine.
• Goldman Sachs has cut its forecast for European stock indices for the next 12 months. Trade protectionism is the key risk for European shares next year.
• iPhone 17 Air may get a 6 mm thick case. Rumors have repeatedly appeared on the Internet that Apple plans to release the iPhone 17 Air in 2025 instead of the iPhone 17 Plus.
• Apple offered Indonesia $100 million in investment in exchange for lifting the ban on sales of the iPhone 16.
• CZ, the informal boss of Binance, believes that countries will print money to buy up BTC for “strategic reserves”
• Healthcare company Cosmos Health (COSM) has announced plans to add Bitcoin and Ethereum to its reserves,
a strategy CEO Greg Siokas says will help the company differentiate itself and protect itself from inflation and currency devaluation.
However, COSM is only valued at $17 million.
• OpenAI CEO Sam Altman has joined newly elected San Francisco Mayor Daniel Lury's transition team.
Altman, along with nine other leaders, will assist the administration on innovation and partnerships.
• Natural gas prices reached an annual peak in 2024, up about 13% since early November, with the International Energy Agency (EIA) forecasting a price peak in January 2025.
• Gold jumps to weekly high as Russia-Ukraine war escalates - Bloomberg. Goldman Sachs predicts that gold could hit a new all-time high of $3,150 next year (+18% y/y). Due to Donald Trump's victory.
• The Senate Judiciary Committee will discuss ending the Visa (V) and Mastercard (MA) duopoly on the credit card industry.
• The largest maker of instant coffee, Nestle SA, plans to continue raising prices and reducing package sizes as coffee prices rise. Arabica futures have risen 50% and robusta futures have risen 65% this year.
• China's chip development progress slowed by US sanctions that impact Huawei's AI products - BBG
• Lowe's (LOW) beat its quarterly forecast, but a negative sales outlook is drawing attention. 2025 could be the best year for the home improvement sector. LOW shares fell 5%.
• Hilton (HLT) plans to quadruple the number of hotel rooms at its India project over the next five years.
• Rumor: AMD to enter smartphone processor market AMD shares are neutral.
• Walmart (WMT) Warns of Inflation from Trump Tariffs: The world's largest retailer says Americans will pay more.
Overall, Walmart raises its outlook after another strong earnings report. Value-seeking shoppers continue to support Walmart. Shares hit records after earnings (+3%).
• EU antitrust regulators will decide on the proposed acquisition of Israeli artificial intelligence startup Run:ai by US chipmaker Nvidia by December 20, the European Commission said in a statement.
• The UK's Competition and Markets Authority (CMA) has cleared Alphabet's partnership and investment in AI rival Anthropic, finding it not subject to investigation under current merger rules.
• Healthcare executives and investors expect more initial public offerings and corporate deals in 2025, with geopolitical tensions ahead of funding issues as the sector's biggest risk, Jefferies' annual health care report showed Tuesday.
• Microsoft unveiled new Copilot software and talked about AI developments at the Ignite conference
The company announced a number of new AI features for its enterprise products. Microsoft also said that it has developed two additional infrastructure chips for its data centers that will help speed up AI and improve data security. The head of MSFT said that the exponential growth of AI models has begun to slow down.
There is increasing talk that AI progress has reached the limits of scaling, since AI models have already been fed almost everything that humanity has created. And there are also problems with energy.
Perhaps the hype about AI is starting to subside. And investors are now faced with the question of monetizing AI.
• Robinhood (HOOD) to acquire TradePMR for $300 million to grow advisory business as Robinhood tries to gain market share from traditional brokers like Charles Schwab and Fidelity Investments.
• CMCSA shares rise 2% in over-the-counter trading as the company announces a plan to spin off most of its cable TV networks into a separate company – WSJ.
• Air Taxi Joby (+13%) shares soared after an upbeat analyst report. The electric vertical takeoff aircraft developer received support from analysts at Needham, who assigned a Buy rating to JOBY shares.
• German police clear protest site at Tesla gigafactory.
• Medtronic boosts annual profit on strong demand for medical devices.
• Alphabet's AI partnership with Anthropic is no longer under scrutiny in the UK.
• Blackstone inks deal to buy Jersey Mike's Subs.
• Walmart raises full-year forecast, betting on strong holiday shopping
• Mantle Ridge appoints new Air Products board, pushes for new CEO
• Airbus CEO says European space industry needs consolidation
• Drone maker AeroVironment expects to benefit from $4.1 billion BlueHalo deal
• NHK reports that the founding family of Seven & i aims to raise $52 billion for a buyout this year.
• Caixabank CEO says he will work with Angola to help BFA go public.
• Bank of England consults on post-Brexit market infrastructure rules.
• Morgan Stanley is recruiting employees of companies preparing for an IPO to manage assets.
• Abrdan reorganizes the management team and forms a committee to lead the restructuring plan.
• Israel's Bank Leumi reports 30% profit rise, helped by high interest rates.
• Japan's Norinchukin seeks investment, reports $3.1 billion loss after selling sovereign debt.
• Aquis Exchange chairman resigns less than two weeks after SIX takeover bid
• Caixabank unveils plan to maintain profitability in face of falling interest rates.
• Rothschild opens asset management office in Dubai to attract capital inflows.
• Goldman Sachs Chairman Expects Deal Number to Rise in 2025
• Caixabank CEO says he will work with Angola to help BFA go public.
• Bank of England consults on post-Brexit market infrastructure rules.
• Morgan Stanley is recruiting employees of companies preparing for an IPO to manage assets.
• Abrdan reorganizes the management team and forms a committee to lead the restructuring plan.
• Japan's Norinchukin seeks investment, reports $3.1 billion loss after selling sovereign debt.
Stock Index Dynamics in 2024
SPY +24.2%
QQQ +22.9%
IWM +14.9%
DIA +14.9%
RSP +14.8%
HUGS'A +12.7%
VIX 16.3
USD Index 106.2
Fear and Greed Index 50
Key events that could impact markets on Wednesday:
- UK consumer price index for October
- Nvidia's third-quarter earnings
- Federal Reserve Chair Lisa Cook, Federal Reserve Chair Michelle Bowman, Boston Federal Reserve President Susan Collins and ECB President Christine Lagarde to speak at events
Fundamental news
• Japan posts fourth straight month of trade deficit despite resurgence in exports
Exports rose 3.1% y/y, helped by a weaker yen.
Imports rose 0.4% y/y, helped by higher energy prices.
• Biden's 'Missile' Calls No Longer Enough to Rally Ukraine's Allies - Bloomberg. Joe Biden's decision to allow Ukraine to strike targets inside Russia is no longer helping to galvanize broader allied support for Kyiv, signaling the waning influence of the outgoing Biden.
• Europe may need $720 billion to revive its defense. Key European NATO members will have to double defense spending from $340 billion to $720 billion to counter Russia's aggressive challenges and the potential decline in U.S. support under Donald Trump, according to a Bloomberg Intelligence report.
• The European Union is withdrawing more than 120 million euros that it had previously allocated to Georgia. Now this money will be used for other purposes, - EU High Representative for Foreign Affairs and Security Policy Josep Borrell.
• China is strengthening economic ties with Latin American countries as it tries to overcome its economic downturn.
Trade between the regions has grown 25-fold, from $12 billion in 2000 to $480 billion in 2022. Five countries, including Ecuador, Chile and Peru, have already signed free trade agreements with China.
• U.S. home starts fell 3.1% as hurricanes hit the South, slowing to their slowest pace in three months in October.
• Chinese vessel Yi Peng 3 was close to both damaged telecommunications cables in the Baltic Sea - Helsingin Sanomat
According to the ship tracking service Marinetraffic, the Yi Peng 3 was close to the damaged cable between Sweden and Lithuania. The same vessel later passed near the damaged C-Lion1 cable between Finland and Germany. The vessel was off the Danish island of Funen around midday on Tuesday.
• Trump to appoint Dr. Oz to head Medicare and Medicaid.
• Medicare and Medicaid budgets are likely to come under scrutiny by the new administration, which is looking to cut trillions of dollars from the federal government's budget. In fiscal year 2024, spending on the programs was $870 billion and $618 billion, respectively, out of $6.75 trillion in total spending.
• “Tariffs are not a real threat [to rising inflation],” Neil Shearing, chief economist at Capital Economics, wrote in a note Monday.
But mass deportations of undocumented immigrants could create labor shortages in sectors such as construction, agriculture, hospitality and child care, fueling inflation there.
Research shows that undocumented immigrants make up just under 5% of the U.S. workforce.