U.S. Markets Update
U.S. equity markets experienced a significant rally on Wednesday, with the Nasdaq Composite index closing above 20,000 for the first time. The surge was driven by strong performances from major technology companies, including Tesla, Nvidia, Alphabet, and Amazon. The S&P 500 also recorded a gain of approximately 0.8%, while the Dow Jones Industrial Average declined slightly by about 0.2%.
Notable Performers
- Tesla: Shares surged nearly 6% to a record high.
- Nvidia, Alphabet, and Amazon: These major tech stocks contributed to the positive sentiment driving the market.
Inflation Data and Federal Reserve Expectations
The November Consumer Price Index (CPI) report revealed a 0.3% increase, aligning with market expectations. This stability in inflation has bolstered predictions of a quarter-percentage-point interest rate cut by the Federal Reserve at its upcoming meeting. Analysts believe the current economic conditions are favorable for easing monetary policy, reducing fears of a recession, and supporting a “soft landing” for the economy.
Sector Variations
- Adobe: Despite reporting strong fiscal fourth-quarter results with revenue of $5.61 billion and adjusted earnings per share of $4.81, Adobe’s shares dropped nearly 9% in after-hours trading due to disappointing revenue forecasts for the current quarter.
Latest Market Update
Asia:
Most major Asian equities rose on Thursday, buoyed by a rally in U.S. technology shares. Japan’s Nikkei climbed 1.6%, while China’s Shanghai Composite and Hong Kong’s Hang Seng also posted gains as investors awaited stimulus cues from China’s Central Economic Work Conference.
U.S. Futures:
- S&P 500 Futures: Down 0.1%.
- Nasdaq 100 Futures: Down 0.2%.
Futures movement comes ahead of key producer inflation data and earnings reports from Broadcom and Costco.
Europe:
European equities closed higher on Wednesday.
- STOXX 50: Gained 0.2%.
- Inditex Shares: Fell 6.5% due to weaker-than-expected sales.
- Siemens Energy: Rose 3.4%.
- Adidas: Rebounded to add 0.5%, despite an ongoing tax investigation.
Currency Markets:
- Dollar Index: Remained around 106.5, supported by weakness in the euro, which traded at 1.0508 against the dollar amid a dovish Eurozone monetary policy outlook.
- Australian Dollar: Gained against the U.S. dollar following strong jobs data from Australia.
Commodities:
- Oil Prices: Largely stable as traders weighed U.S. sanctions on Russia and the potential for economic stimulus from China to boost demand.
- OPEC Forecast: Downward revisions for oil demand growth in 2024 and 2025 tempered optimism.
Equities on the Move
Adobe:
Reported strong fiscal fourth-quarter results, including revenue of $5.61 billion and adjusted earnings per share of $4.81, exceeding expectations. However, softer revenue guidance for the current quarter led to a 9.1% decline in its share price, with BMO cutting its price target to $570 from $600.
Inditex:
The owner of Zara experienced a 6.5% drop in shares after reporting a rare miss on quarterly sales and profits. Results were impacted by currency fluctuations and floods in Spain, with third-quarter sales of €9.36 billion falling short of analyst expectations.
Adidas:
Investigators conducted a second day of searches at Adidas’ headquarters as part of a tax investigation concerning alleged damages of €1.1 billion related to customs and tax compliance between October 2019 and August 2024. Adidas stated it is cooperating fully with authorities and does not anticipate significant financial repercussions.
Broadcom:
Shares rose over 6% amid reports that Apple is collaborating with Broadcom to develop its first server chip for artificial intelligence, code-named “Baltra.” Production is expected to commence by 2026, with Broadcom providing critical networking technology.
Other Notable Moves:
- Hershey: The Hershey Trust Company rejected Mondelez International’s preliminary takeover offer, deeming it too low. The Trust holds 80% of the voting power in Hershey, making its approval vital for any acquisition.
- GE Vernova: Shares climbed above $347 following an investor presentation where Morgan Stanley reiterated an overweight rating with a price target of $367. The company also announced a $0.25 quarterly dividend and a $6 billion share repurchase authorization.
Upcoming Data and Events
- European Central Bank: Expected to announce a 0.25% interest rate cut, reducing the rate to 3.00%.
- U.S. Data: November Producer Price Index (PPI) and core PPI figures will be released. Broadcom and Costco are set to announce earnings.
For more information, visit cc.com.mt. The information, views, and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning investments or investment decisions, or tax or legal advice.
