MARKET WRAPS
Watch For:
No major economic data or trading updates expected
Opening Call:
Stock futures rose, pointing to gains at the start of a
holiday-shortened week. Asian stock benchmarks tracked U.S.
equities higher; the dollar and Treasury yields were steady; while
oil futures fell and gold edged higher.
Equities:
European stock futures advanced early Wednesday as markets
return from the Christmas break.
Asian equities tracked U.S. indexes higher, as the S&P 500
approached a record close Tuesday.
Investors are broadly optimistic heading into 2024.
Interest-rate increases by the Federal Reserve have tamed inflation
while avoiding a recession. Money managers expect the central bank
will cut interest rates next year. Fresh data out Tuesday showed
that shoppers kept spending during the holiday season.
"We're gonna finish December on a very positive note," said
Louis Navellier, chief investment officer at Navellier &
Associates. "There's a lot to look up to."
-
The outlook for mining stocks for the next one to three months
is positive, Jefferies said. "The prospect of Fed rate cuts,
falling treasury yields and a weaker dollar are clear buy signals
for mining equities."
Still, a rally could be shortlived if a recession follows, the
bank said, "Either way, we see clear daylight for now,"
highlighting Anglo American, Alcoa and Teck as best-positioned for
the near term.
Forex:
The Chinese yuan has lost more than 3% of its value against the
greenback this year and was doing even worse before the dollar
slipped against most global currencies in November.
The value of the yuan is also seen by many as a sign of
confidence in China's economy, which is suffering from a moribund
real-estate market, a slowdown in manufacturing and a reluctance by
consumers to spend big. Foreign investors have pulled out of
China's stock markets this year, and small investors in the country
are nervous.
"The central bank's worry is that currency weakness will
exacerbate negative sentiment among foreign investors and domestic
ones," said Alvin Tan, head of Asia foreign-exchange strategy at
RBC Capital Markets.
Bonds:
Treasury yields steadied early Wednesday. Market analysts expect
a calm week, with only a couple of notable economic-data releases
on the calendar.
"Optimism concerning Fed rate cuts and robust investor sentiment
are fueling much of this appetite," said José Torres, senior
economist at Interactive Brokers. "The longer end, however, remains
a bigger wild card over time, with the path toward fiscal restraint
remaining narrow."
Energy:
Oil futures edged lower early Wednesday after rising overnight.
However, oil prices could remain at high levels due to geopolitical
uncertainties and OPEC+ supply cuts.
The attack on a container ship in the Red Sea by Yemen's
Iran-backed Houthi militia has escalated tensions in the Middle
East, Xinhu Futures said. Meanwhile, OPEC+ members may further cut
oil production, driving up oil prices, Xinhu added.
Metals:
Gold rose slightly in Asia, and will likely be supported by a
weaker U.S. dollar and lower Treasury yields on expectations of
interest-rate cuts by the U.S. Fed in early 2024, Tongguan Jinyuan
Futures said.
U.S. holiday retail sales this year has slowed from last year,
signaling consumption is weakening. Meanwhile, global geopolitical
uncertainties boost market appetite for gold as a safe-haven asset,
it added.
-
Copper prices rose, supported by concerns over tight supply.
Investors remain cautious about the supply outlook after Panama
ordered First Quantum to shut down its flagship copper mine in the
country.
However, prices are likely to ease in the new year, as current
levels are too high and could lead to reduced demand, Nanhua
Futures said.
-
The benchmark spot iron ore price rose by 1.0%, supported by
restocking demand from Chinese steel mills, according to S&P
Global Commodity Insights.
The market-data company said ore with 62% iron shipped to north
China cost $141.45/metric ton Tuesday, buoyed by demand from
steelmakers that are expected to keep importing ore for their
inventories heading into winter and ahead of the Lunar New Year
holiday.
TODAY'S TOP HEADLINES
China's Industrial Profit Jumped in November
Profits earned by big industrial companies in China jumped in
November, official data showed Wednesday, thanks to a low
comparison base last year and Beijing's recent efforts to stimulate
the economy.
Industrial profits rose 29.5% from a year earlier in November,
compared with October's 2.7% expansion, marking the fourth month of
year-over-year increase, said the National Bureau of
Statistics.
How to Ride the Biotech Roller Coaster
With stocks starting to price in interest-rate cuts next year,
the biotech sector has emerged as a winner for investors seeking
riskier bets with more distant payoffs.
But investing in this industry is tricky because biotech is a
sector of haves and have-nots. While every industry has its winners
and losers, the gap in biotech is bigger due to the binary nature
of drug development. Many companies spend years testing one medical
approach or platform. In the end, either the idea works or it
doesn't, and that could be the difference between tripling your
investment or losing it all.
Nasdaq Set to Beat NYSE in IPO Race for Fifth Year in a Row
Nasdaq is on track to beat the New York Stock Exchange in the
battle for initial public offerings in 2023, the fifth consecutive
year in which the once-dominant NYSE has fallen behind its
rival.
IPOs at Nasdaq have raised $13.6 billion compared with $10.4
billion for new listings at the NYSE, according to data provider
Dealogic.
In Putin's Russia, Snitching Enforces a United Front-and an
Outlet for Revenge
In June, Kamilla Murashova was fined 30,000 rubles, equivalent
to about $330, after a stranger traveling on the same train
reported her to police for the badges displayed on her everyday red
backpack.
One emblem depicted the peace sign. Another said "No to War." A
third pictured a blue sky and a yellow field of wheat-the colors of
the Ukrainian flag.
AstraZeneca to Buy Gracell Biotechnologies for $1.2 Billion
AstraZeneca has agreed to buy Gracell Biotechnologies for a
transaction value of $1.2 billion, as part of the former's efforts
to grow its cell therapies business.
The upfront cash portion of the deal is $1.0 billion, a 62.0%
premium to Gracell's last closing price for its American depository
shares of $6.19, AstraZeneca said in a statement Tuesday.
Israeli War Cabinet Meets to Consider Egyptian Proposal to End
War in Gaza
Israel's war cabinet met on Monday night to discuss a three-step
plan put forward by Egypt for ending the war in Gaza, Israeli
officials said.
The Egyptian proposal, a copy of which was reviewed by The Wall
Street Journal, is the most comprehensive peace plan to be proposed
to the two parties in the 11-week-old Gaza war.
Iran-Backed Forces Widen Their Attacks on Commercial
Shipping
Escalating Iran-backed attacks against global commercial
shipping in the Red Sea have heightened pressure on the Biden
administration as officials scramble to protect trade while trying
to avoid a direct confrontation with Tehran.
The U.S. Navy said late Saturday that two more vessels had been
attacked that day by Iranian-backed Houthi forces in Yemen,
bringing the number of commercial ships attacked near a crucial
passageway between the Horn of Africa and the Middle East to 15.
The Pentagon said earlier in the day that a chemical tanker in the
Indian Ocean was struck by a drone launched directly from Iran, a
claim Tehran denied.
Apple Appeals U.S. Ban That Halted Watch Sales
Apple is appealing a decision by a federal trade agency that
forced it to stop selling two models of its smartwatches after the
agency said Apple violated patents of a competitor.
Apple said in court documents filed Tuesday the company will
suffer "irreparable harm" if the ban stays in place, since the
models are its two most popular. The watch models affected are its
newest ones: the Apple Watch Series 9 and the Apple Watch Ultra
2.
Israel Finance Minister Calls Intel's $25 Billion Investment
'Important and Significant'
Intel will invest $25 billion in Israel to expand its wafer
fabrication site after receiving $3.2 billion from the country's
government.
Intel will utilize the investment to expand its wafer site in
Kiryat Gat. The Intel investment was announced by the Israeli
government in June but remained unconfirmed until now. Israel said
back in June that Intel reached an agreement in principle to invest
$25 billion in a new manufacturing facility in the country, the
largest ever foreign investment there.
Write to singaporeeditors@dowjones.com
Expected Major Events for Wednesday
07:00/NOR: Nov Retail Sales
08:00/CZE: Dec Business cycle survey (consumer/business
confidence)
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(END) Dow Jones Newswires
December 27, 2023 00:20 ET (05:20 GMT)
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