U.S. Market Overview
On Tuesday, U.S. equities ended lower, with the Dow Jones Industrial Average falling for the ninth consecutive session, marking its longest losing streak since 1978. The Dow declined by 0.6%, while the S&P 500 and Nasdaq dropped by 0.4% and 0.3%, respectively. Investor caution remained high ahead of the Federal Reserve’s final policy meeting of the year, where a quarter-point interest rate cut is widely expected.
Investors are also closely watching comments from Fed Chair Jerome Powell for indications about the central bank’s rate cut plans for 2025, particularly in light of ongoing economic resilience and data dependency.
In November, retail sales surpassed expectations with a 0.7% month-over-month increase, driven primarily by auto sales. This strong consumer spending highlights robust economic momentum, supporting the narrative of a soft landing scenario for the economy.
Notable Stock Movements
- Tesla rose over 3.5% after brokerages increased their price targets.
- Pfizer shares gained more than 4.5%, following 2025 profit forecasts in line with Wall Street expectations.
- Bitcoin briefly crossed $108,000 for the first time, reaching a new all-time high.
Despite strong performance in certain sectors, overall sentiment remained cautious, with near-term market volatility driven by Fed policy decisions and inflation data.
Asia-Pacific Markets Update
Most Asian equities rose on Wednesday, supported by optimism over China’s fiscal spending plans. The Shanghai Composite advanced 0.7%, while the Hang Seng Index climbed 0.9%. Gains across the region were tempered by a mixed performance in Japan, where speculation about a potential Honda-Nissan merger influenced investor sentiment.
European Markets Summary
European equities closed slightly lower on Tuesday, with the Euro STOXX 50 dipping 0.1% to 4,943. The decline was attributed to weak economic data and cautious central bank outlooks.
- Santander and Intesa Sanpaolo led losses in the financial sector.
- Semiconductor manufacturer ASML gained 2%.
- TotalEnergies and ENI saw declines due to lower oil prices.
Currency and Commodities
- The dollar index held steady around 106.9 on Wednesday as markets awaited the Federal Reserve’s expected interest rate cut.
- The euro traded at 1.0503 against the dollar, with traders closely monitoring Fed projections and upcoming decisions from the Bank of England and the Bank of Japan.
- Oil prices remained stable as traders balanced tight U.S. crude supplies against weak demand signals from China and a stronger dollar.
Equities in Focus
Honda-Nissan Merger Talks
Honda and Nissan are reportedly exploring ways to deepen their partnership, including a possible merger. Such a move could create the world’s third-largest automotive group, enhancing their ability to compete with Tesla and Chinese EV manufacturers.
Eli Lilly’s New Approval
Eli Lilly received approval for its Alzheimer’s drug Kisunla (donanemab) in China, expanding its presence to a fourth major market after the U.S., Japan, and U.K. This milestone bolsters Eli Lilly’s position in the Alzheimer’s treatment sector.
Pfizer and Teva Developments
- Pfizer reaffirmed its 2025 profit outlook, forecasting earnings of $2.80 to $3 per share and revenue between $61 billion and $64 billion. The company continues to focus on cost-cutting and improving margins amid declining COVID-19 product sales.
- Teva shares surged 17% following positive Phase 2b trial results for its drug duvakitug, showing significant efficacy for inflammatory bowel diseases like ulcerative colitis and Crohn’s disease.
Stellantis Strategy
Stellantis announced plans to invest €2 billion in Italy by 2025 to expand hybrid model production while keeping all Italian plants operational until 2032. The company is avoiding public funding while addressing weak EV demand.
Mastercard Share Buyback
Mastercard launched a $12 billion share buyback program and announced a 15% increase in its quarterly dividend to $0.76 per share.
Upcoming Data and Events
The Federal Reserve is expected to announce a 25 basis point rate cut later today. Other significant updates include:
- U.S. housing data, including Building Permits and Housing Starts.
- European reports on inflation rates and construction output.
- Earnings reports from FedEx, Oracle, and Adobe.
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