Early Look

Tuesday, December 26, 2023

U.S. futures are up slightly overnight following the Christmas Day holiday, with S&P futures (Spuz) holding above 4,800 after rising for an 8^th straight week last Friday. For the week, Dow up 0.2%, S&P 500 up 0.8%, and Nasdaq finished up 1.2% as the upward climb into year-end continued for major averages on lower interest rate hopes and softening inflation data. U.S. stocks gyrated on Friday between gains and losses after cooler-than-expected inflation data further firmed bets for Fed interest rate cuts in the new year. Small caps handily outperformed the broader market, with the Russell 2000 ending sharply higher and ending up +2.46% WTD. All three indexes notched their eighth consecutive weekly gains, the longest weekly winning streak for the S&P 500 since late 2017. For the Nasdaq and the Dow, it marks the longest streak of consecutive weekly gains since the beginning of 2019. The S&P 500 is now within 1% of its record close reached in January 2022. Light day of economic data with a few housing data points out around 9:00 AM this morning, but no earnings, or Fed speakers expected this holiday shortened week. In Asian markets, The Nikkei Index rose 51 points to 33,305, the Shanghai Index dropped -19 points to 2,898, and the Hang Seng Index was closed. In Europe, the German DAX and FTSE 100 were both closed for Holiday. Gold ticked higher as the final week of the year got under way, with traders looking ahead to interest rate cuts from the Federal Reserve in 2024 and a weaker US currency.

• The Dow Jones Industrial Average slid -18.38 points, or 0.05%, to 37,385.97.
• The Nasdaq Composite climbed 29.11 points, or 0.19%, to 14,992.97.
• The Russell 2000 Index advanced 16.90 points, or 0.84% to 2,033.96.

• 8:30 AM ET                  National Activity Index for November
• 8:55 AM ET                  Johnson/Redbook Weekly Sales
• 9:00 AM ET                  CaseShiller 20 city for October
• 9:00 AM ET                  Monthly Home Prices M/M for October
• 10:30 AM ET                Dallas Fed Manufacturing for December
• 1:00 PM ET                   U.S. Treasury to auction $54B in 2-year notes

• Nio (NIO) unveiled a flagship model featuring self-developed technologies including semiconductors, betting they would help prop up earnings, as a bruising price war and slowing car demand weigh on profitability, according to Reuters.
• UTZ Brands (UTZ) mentioned positively in Barron’s saying shares are loaded with upside, noting it has a sliver of the distribution of industry giant PepsiCo (PEP), with its Frito Lay unit, but has been growing nicely. Its challenges and shortcomings nearly all come down to being too small. So, as it grows, operations could improve in a hurry.

• PNM Resources (PNM) has entered into an agreement to sell its 50% ownership interest in its renewable joint venture, New Mexico Renewable Development, or NMRD, to Exus North America Holdings. PNM Resources and American Electric Power, or AEP, which also owns 50% of NMRD.
• Seadrill (SDRL) announces that, following a competitive bidding process, the West Auriga, and the West Polaris drill ships have secured two 1,064-day fixed-term contracts in Brazil, with a total contract value of approximately $1.1 billion.
• ZIM Integrated Shipping (ZIM) weakens after Maersk said it’s preparing to resume shipping through the Red Sea, thanks to a new multinational maritime task force to protect vessels from attacks by Houthi rebels from Yemen.

• Gilead Sciences (GILD) mentioned positively in Barron’s saying it may finally recover from its blowup in 2016 noting keeping the same multiple in place and including the dividend, the stock could post an almost double-digit total return by the end of the coming new year. If things go right, there’s lots of additional upside ahead.
• Gritstone Bio Inc (GRTS) files for a mixed shelf of up to $250M.
• Liquidia (LQDA) files $200M mixed securities shelf.

• NetEase (NTES), Tencent (TCEHY): China’s press and publications authority has approved 105 new online games, saying it fully supports the industry after proposed curbs caused massive losses last week for investors in major games makers. The National Press and Publication Administration issued a statement saying the approvals by the Game Working Committee of China Music and Digital Association were “positive signals that support the prosperity and healthy development of the online game industry.” http://tinyurl.com/vzdteud2 .
• Infosys (INFY) said that an unnamed global company, which had signed a $1.5 billion deal focused on artificial intelligence solutions, decided to terminate its Memorandum of Understanding with the IT giant. http://tinyurl.com/bdfj4wbx .
• Intel Corp. (INTC) confirmed it will invest a total of $25 billion in Israel after securing $3.2 billion in incentives from the country’s government.
• Manchester United (MANU) agrees to sell 25% stake to billionaire Jim Ratcliffe for $1.3B; Ratcliffe will pay $33 a share for the 25% stake in the soccer club, according to a statement on Sunday. The sale prices values Manchester United (MANU) at about $5.4 billion http://tinyurl.com/x3ukc24 .
• Nano Dimension (NNDM) announced that it has submitted a preliminary all cash proposal to the Board of Directors of Stratasys (SSYS) to purchase all the outstanding shares of Stratasys that it does not currently own for $16.50 per share in cash, with an ability to increase its price subject to due diligence. http://tinyurl.com/y8trx9jm .
• Yandex’s (YNDX) restructuring is expected to be postponed until early 2024, three sources familiar with the negotiations told Reuters on Monday. Yandex NV has been working on a restructuring for months, as it tries to ensure some of its businesses retain access to Western markets despite sanctions against Moscow over the conflict in Ukraine.