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Market Recap

Last Week’s Headlines

Economy & World News

• Federal Reserve Cuts Benchmark Interest Rate to 4.25-4.50% Range
  In its latest move to reduce borrowing costs, the Federal Reserve cut its benchmark interest rate by 25 basis points on Wednesday, bringing it to a target range of 4.25% to 4.50%. This reduction marks a total decrease of 1% since September, impacting rates for credit cards, loans, auto financing, and indirectly, mortgages.

• ABC News Settles Defamation Lawsuit with $15 Million Contribution to Trump’s Presidential Library
  ABC News will pay $15 million as a "charitable contribution" to Donald Trump’s planned presidential library and an additional $1 million in legal fees, after inaccuracies in George Stephanopoulos' statements led to a defamation lawsuit. The network has expressed regret over the incident on their editor's note.

• SoftBank Commits to $100 Billion Investment in U.S. Technology Projects Under Trump’s Encouragement
  SoftBank Group, led by CEO Masayoshi Son, pledges to invest at least $100 billion in U.S. technology initiatives over the next four years, anticipating the creation of 100,000 jobs in artificial intelligence and emerging technologies. 

• Global Law Firms Expand in the Gulf to Capitalize on $150 Billion in Deals
  Top law firms from New York, London, and Chicago are intensifying their operations in the Gulf, attracted by over $150 billion in regional deals and big business from entities like Saudi Aramco and Abu Dhabi National Oil Co. These firms are now deeply involved in major transactions, including Adnoc's pursuit of a $13 billion deal with Germany's Covestro AG, amidst a dynamic period of share listings and acquisitions led by sovereign wealth funds.

• Fall of Assad Exposes Vast Drug Trafficking Network in Syria
  The collapse of Bashar al-Assad's regime has unveiled a major drug-smuggling operation, central to the Middle East, with industrial-scale Captagon manufacturing facilities discovered inside Syrian government air bases. The network not only enriched Assad but also benefited allies like Hezbollah, countering the effects of international sanctions through extensive drug trade profits.

• Tech Consultant Convicted of Second-Degree Murder in Death of Cash App Founder Bob Lee
  A San Francisco jury has convicted tech consultant Nima Momeni of second-degree murder in the 2023 stabbing of Cash App founder Bob Lee, imposing a sentence of 16 years to life. The verdict, reached after seven days of deliberation, dismisses Momeni's self-defense claim. Victim’s brother Tim Oliver Lee expressed relief, emphasizing that justice was served, while the defendant’s mother decried the verdict as unfair.

• U.K. Inflation Hits 2.6% in November, Core Inflation at 3.5%
  According to the Office for National Statistics, U.K. inflation reached 2.6% in November, aligning with expectations. Core inflation, which excludes volatile items like energy and food, was slightly below forecasts at 3.5%. Economic adviser Joe Nellis predicts that the upward trend in inflation may persist, driven by energy costs and sustained labor market pressures.

• U.S. Graphite Producers Seek Tariffs on Chinese Imports Amid Unfair Pricing Claims
  U.S. graphite producers have launched a trade action to impose significant tariffs on Chinese graphite, citing that state subsidies in China are distorting prices and stifling competition. The trade association has filed petitions for investigations into potential anti-dumping law violations by Chinese firms.

• Brazilian Real Faces Steepest Drop Since November 2022 Amid Strong U.S. Dollar and Economic Concerns
  Brazil's real recorded its largest daily decline in over two years, plummeting to a record low as the U.S. dollar strengthened following cautious signals from the Federal Reserve. The currency hit a low of 6.3139 against the dollar and closed at 6.2896, reflecting a 2.9% drop. This volatility comes as Brazilian markets react sharply to the government's spending plans and substantial budget deficit.

• Biden Administration Backs California’s Zero-Emission Vehicle Mandate Amid Potential Challenges from Trump
  The Biden administration has approved California's push for zero-emission vehicle sales, setting a timeline that bans gasoline-powered cars by 2035. However, President-elect Donald Trump has promised to revoke these mandates, creating potential hurdles for his administration due to the recent decision by the Environmental Protection Agency, which may enforce compliance with California's strict standards for the foreseeable future.

• U.S. Treasury Yields Rise Following Fed’s Rate Cut Announcement
  After the Federal Reserve's recent decision to cut interest rates, U.S. Treasury yields saw a notable increase, with fewer rate cuts expected going forward. The 10-year Treasury yield climbed nearly 12 basis points to 4.504%, while the 2-year yield surged over 10 basis points to 4.348%, underscoring the inverse relationship between yields and bond prices.

• Russia Relocates Advanced Military Assets from Syria to Libya Amid Middle East Strategy Shift
  Following the collapse of Bashar al-Assad's regime, Russia is transferring sophisticated military equipment, including S-400 and S-300 air-defense systems, from Syria to eastern Libya. U.S. and Libyan officials report that this move is part of a significant drawdown of Russian military presence in Syria, with troops, aircraft, and weaponry being relocated to areas controlled by Libyan warlord Khalifa Haftar, a Moscow ally. This shift aims to maintain Russia's strategic military footprint in the Middle East.

• Bank of England Holds Interest Rates Steady Amid Rising Inflation
  In its final meeting of the year, the Bank of England decided to maintain current interest rates, despite UK inflation reaching an eight-month high.

• Father and Son Plead Guilty in Stock Manipulation Scheme Involving New Jersey Deli
  Peter Coker Sr. and Peter Coker Jr. have admitted to conducting a stock manipulation scheme with a small New Jersey deli, which astonishingly reached a market cap of $100 million. Scheduled for sentencing next spring in Camden, New Jersey, they join a third defendant, James Patten, who previously pleaded guilty to securities fraud and conspiracy charges related to the company, formerly known as Hometown International.

• Fed's Preferred Inflation Gauge Shows Milder Increase, Below Expectations
  The Personal Consumption Expenditures (PCE) price index, closely watched by the Federal Reserve, reported a modest monthly rise of 0.1% and an annual increase of 2.4%, both figures falling short of expectations. Core PCE, which excludes food and energy, mirrored this trend with similar increments, also below forecasts. Meanwhile, personal income grew by 0.3%, and personal expenditures by 0.4%.

Public Markets

• Ken Leech Faces $10 Million Bail on Federal Charges for Improper Trade Allocations
  Ken Leech, former co-chief investment officer at Western Asset Management Co., has been released on $10 million bail amid charges of favoring certain clients with over $600 million in gains, while others incurred losses. Set to enter his plea in a New York federal court, Leech's actions have sparked a significant investor exodus, with around $65 billion withdrawn from the firm, as outlined in the parallel SEC lawsuit.

• Cocoa Prices Hit Record $12,000 Amid West African Supply Concerns
  Cocoa prices have surged to a record high, exceeding $12,000 a ton due to worsening crop conditions in West Africa, particularly in Ghana and Ivory Coast, the leading producers. A significant rise in prices, with futures climbing 14% this week alone in New York, reflects deepening concerns over potential supply shortfalls.

  • Hedge Funds Withdraw from Cocoa Futures Amid Rising Prices and Market Challenges
    Driven by record cocoa prices and supply issues in West Africa, hedge funds are retreating from cocoa futures due to increased volatility and higher trading costs. This shift is affecting liquidity and broadening spreads, leading some traders to explore alternatives for hedging, significantly impacting the cost of chocolate products globally.

• FedEx to Spin Off Freight Division, Shares Surge on News
  FedEx Corp. announced plans to spin off its freight division into a separate publicly traded company, a move aimed at streamlining operations and boosting efficiency. With last year's revenue of $9.4 billion, FedEx Freight is set to become the industry's largest player by sales. The separation, estimated by Bloomberg Intelligence to give the unit an enterprise value over $30 billion, is expected to be completed within the next 18 months.

• Novo Nordisk Shares Tumble 20% After Disappointing Trial Results
  Novo Nordisk's stock price dropped about 20% following underwhelming results from a late-stage trial of its experimental weight loss drug, CagriSema, which did not meet expectations. Despite the trial's results, Novo Nordisk reported to CNBC that CagriSema surpassed Wegovy in weight reduction and matched the performance of the best-in-class treatments.

Real Estate

• Novo Nordisk Expands with New $1.2 Billion Factory and $11.7 Billion Acquisition
  After acquiring approval for an $11.7 billion purchase of three large facilities abroad, Novo Nordisk is investing an additional 8.5 billion kroner ($1.2 billion) to construct a new 40,000 square-meter production facility in Odense, marking a significant expansion in their manufacturing capabilities. This move represents a major expansion for the Danish pharmaceutical giant, now establishing a completely new location for its operations, as highlighted in their recent statement.

M&A, IPO’s, Bankruptcies

• Shyft Group and Aebi Schmidt Announce Merger, Boosting Shyft's Shares by 13%
  The Shyft Group and Switzerland's Aebi Schmidt have agreed to merge in an all-stock deal, significantly lifting Shyft's stock by 13%. Both companies, specializing in the manufacture of specialty vehicles, aim to enhance their market position through this strategic alliance, as detailed in their joint announcement.

• Blackstone Leads Preferred Bid for 20% Stake in Haldiram Snacks at $1.6 Billion
  A consortium led by Blackstone Inc., partnering with Singapore's GIC Pte and Abu Dhabi Investment Authority, is poised to acquire a 20% stake in Haldiram Snacks Pvt. for approximately $1.6 billion, valuing the Indian snack giant at about $8 billion. Advanced talks suggest a deal could be finalized soon, although other bidders remain in the fray.

• Honda and Nissan Consider Merger Amid Rising Threat from Chinese EV Makers
  Facing intense competition from China's rapidly advancing electric vehicle (EV) sector, Honda and Nissan are discussing a potential merger to safeguard their positions. This strategic move reflects a broader defense within Japan's auto industry, which supports 8% of the nation's workforce and is integral to its economic vitality, especially as Chinese EV expertise challenges global traditional automakers.

• Intel Advances Sale of Altera Unit, Selects Buyout Firms for Next Bidding Round
  Intel Corp. has progressed in its efforts to sell its Altera division, specializing in low-power programmable chips, by moving several buyout firms to the next round of bidding. Among those shortlisted are private equity giants Francisco Partners and Silver Lake Management, as well as competitors like Lattice Semiconductor Corp. Apollo Global Management Inc. and Bain Capital are also in pursuit of Altera, indicating robust interest in the sale initiated by Intel's former CEO.

Earnings this week

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