Can the Santa Claus rally save the stocks? 23/12/2024

HOT stories for today

Stocks on the move:

• Novo Nordisk (NVO): Shares tumbled more than 16% in afternoon trading, marking their worst single-day decline in over 22 years. The drop followed disappointing late-stage trial results for the company's experimental weight-loss drug, CagriSema.

• Mission Produce (AVO): The avocado producer surged 20% after its fiscal fourth-quarter earnings exceeded Wall Street’s expectations.

• Carnival (CCL): The cruise line operator’s stock climbed more than 5%, supported by the company’s outlook for strong demand in 2025 and 2026.

• Darden Restaurants (DRI): Shares rose 2% after the restaurant chain reported better-than-expected second-quarter earnings, with positive same-store sales across its major brands, including Olive Garden, LongHorn Steakhouse, Yard House, and Cheddar’s Scratch Kitchen.

• Rivian Automotive (RIVN): The electric vehicle manufacturer advanced 6%, buoyed by retail investor optimism noted on Stocktwits. The stock showed resilience despite a recent downgrade and broader market challenges.

Today’s action

• Asia-Pacific markets began the holiday-shortened Christmas week on a strong footing, with investors closely watching for the anticipated announcement regarding the merger of Japanese automakers Honda and Nissan. According to NHK, the companies are targeting a “final agreement” by June 2025 and may establish a new holding company by the summer of 2026, potentially led by a Honda executive.

• In the U.S., stock futures gained in overnight trading on Sunday as the market prepared for a shortened trading week. Futures for the Dow Jones Industrial Average rose by roughly 100 points, while S&P 500 futures added 0.3%, and Nasdaq 100 futures advanced 0.4%. Trading activity is expected to remain light, with the New York Stock Exchange closing early at 1 p.m. ET on Tuesday for Christmas Eve and remaining closed on Christmas Day. Investors are optimistic that a "Santa Claus rally" could lift the market to close 2024 on a positive note, particularly after a volatile week. Meanwhile, on the political front, President Joe Biden signed a government funding bill on Saturday, avoiding a federal shutdown. The bill will maintain funding for federal agencies at current levels for the next three months.

Wahtclist: AVXL, COIN, NVDA, TSLA, AFRM, RIVN, AVGO
 

Bitcoin

• Bitcoin experienced its first notable weekly decline since the rally triggered by Donald Trump’s November presidential election victory, which propelled the cryptocurrency above six figures.
  Bitcoin (BTC), now trading at $94,645, dropped 10% for the week ending December 22, shedding approximately $10,500 from its opening price of $105,185, according to TradingView data. Analysts attribute the volatility to profit-taking following Bitcoin’s meteoric rise and persistent global economic uncertainty. President-elect Trump’s pro-crypto stance has also influenced market sentiment, including his proposals to establish a national Bitcoin reserve and appoint crypto-friendly officials to regulatory positions

• The downturn followed the Federal Reserve’s Federal Open Market Committee decision to reduce its projection for 2025 rate cuts from five to two after implementing three consecutive cuts. A year ago, Bitcoin traded around $43,610 on Christmas Day, with speculation centered on the approval of spot Bitcoin exchange-traded funds (ETFs), which have since gained approval.
  Watchlist: Bitcoin: 94 000-108 000, Ethereum: 3300-4200, Solana: 180-265

Forex

• The Japanese Yen struggles to build on Friday’s modest recovery against the US Dollar, trading slightly negatively during the early European session. Despite this, the JPY remains above its five-month low. Japan's strong inflation data, released on Friday, has left the possibility of a Bank of Japan (BoJ) rate hike in January or March open, lending some support to the Yen. Additionally, concerns over geopolitical risks, trade tensions, and potential intervention by Japanese authorities to stabilize the currency help limit losses. Traders now await the US Consumer Confidence Index later in the day for fresh direction.

• The EUR/USD pair extended its rally for a third straight session on Monday, trading near 1.0440 during Asian hours. Despite the recent gains, the pair remains under a persistent bearish bias, constrained within a descending channel on the daily chart. A potential improvement in the 14-day RSI suggests the bearish pressure might weaken, but the nine-day EMA at 1.0449 continues to act as a near-term resistance level.
  Watchlist: EUR/USD: 1.0300-1.0650, USD/JPY: 149-158

Basic Materials

• Gold prices remain range-bound at the start of the week, hovering near $2,630 during the early European session on Monday. Mixed fundamentals are keeping the metal’s movements constrained. Geopolitical risks stemming from the ongoing Russia-Ukraine conflict and tensions in the Middle East provide underlying support for the safe-haven asset. Meanwhile, subdued US Dollar performance, which remains below its two-year high reached last Friday, adds a tailwind. However, elevated US bond yields, driven by the Federal Reserve’s hawkish stance, continue to cap gold’s potential gains.
• West Texas Intermediate (WTI) crude oil prices increased for the second consecutive day on Monday, recovering from last Friday's over-one-week low of $68.35. During the Asian session, WTI traded around the $69.75-$69.80 mark, gaining less than 0.50% on the day. The rise is supported by easing concerns over a potential demand slowdown in China. However, upside momentum remains limited as prospects of increased supply from non-OPEC+ nations weigh on the commodity.
  Watchlist: GOLD 2530-2790, US Oil: 65.00-73.00

The TEFS Analyst team wishes you a successful day!