On Wednesday, the S&P 500 and Nasdaq Composite achieved new closing highs as technology shares led the way, driven by optimism around potential easing inflation indicated by the awaited Consumer Price Index (CPI) report. The Nasdaq's fourth consecutive gain erased the previous week's decline, with communication services and semiconductor companies playing key roles. Concurrently, European shares closed moderately lower as investors assessed the policy outlook for the ECB and the Fed, impacting financial firms like Santander, Allianz, BNP Paribas, and AXA, while Flutter Entertainment underperformed for a second session amid growth concerns.

Summary for 11.01.2024

Most Asian shares rose, rebounding from a tough start to 2024, with a focus on US inflation data for interest rate cues. Japan's Nikkei 225 hit a 34-year high, driven by expectations of the Bank of Japan's dovish policy. Asian tech shares, especially in Hong Kong and South Korea, contributed to gains.

European shares are on track for gains at the open while US equity futures held steady as the market awaits US inflation data that will help clarify the path for Federal Reserve poli

Oil prices showed minimal movement in Asian trade this morning after unexpected weekly US inventory builds, contrasting market expectations. Concerns over weakening US fuel demand, exacerbated by a severe winter storm, impacted oil bulls. US crude inventories grew by 1.3 million barrels, and large builds in gasoline and distillate stockpiles raised concerns.

The US SEC approved the first Bitcoin ETFs from BlackRock, Ark Investments, Fidelity, Invesco, and VanEck, marking a significant development for Bitcoin's institutionalization. The ETFs are expected to draw substantial inflows, potentially $50-100 billion in 2024. SEC Chair Gary Gensler, previously sceptical, joined in the approval. The decision comes after a court ruling favouring Grayscale's Bitcoin Trust conversion into an ETF. The move is considered a game-changer for Bitcoin and the crypto industry.

Smith Douglas Homes Corp. has set its IPO price at $21 per share, offering 7,692,308 shares with an option for underwriters to purchase an additional 1,153,846 shares. The IPO, managed by institutions including J.P. Morgan, is scheduled to start trading on the NYSE under "SDHC" on Thursday, with the offering expected to conclude by 16th January 16. The Atlanta-based homebuilder targets fast growth in home closings for entry-level and empty-nest buyers in various metropolitan areas.

Global sales of fully electric and plug-in hybrid vehicles rose 31% in 2023, down from 60% growth in 2022, according to Rho Motion. The slowdown is considered typical for growing markets. In 2024, the firm forecasts global EV sales growth of 25% to 30%. December set a monthly record with 1.5 million units sold. Battery electric vehicles accounted for 9.5 million of the 13.6 million EVs sold in 2023, with concerns of potential slowing demand in Europe due to the removal of EV subsidies in Germany.

Netflix's ad-supported tier has surpassed 23 million monthly users globally, according to the streaming giant's advertising chief, Amy Reinhard. Launched in November 2022 to attract more customers and create an additional revenue stream, the ad-supported plan had initially reached 15 million active users per month a year after its launch. Netflix has been increasing prices on its ad-free options to encourage more subscribers to the ad-supported tier, where commercials contribute to additional revenue.

Tesla has introduced a restyled version of its Model 3 compact sedan in North America with unchanged prices. The revamped model includes new features such as a rear display for backseat passengers and updated wheel designs. The long-range variant now has a range of 341 miles on a single charge. The Model 3 rear-wheel drive variant is priced at $38,990, while the long-range variant costs $45,990 after the federal tax credit eligibility ended.

Spanish pharmaceutical company Grifols plans to take legal action against short-seller fund Gotham City Research after it published a critical report that led to a $2.5 billion market value loss for Grifols. The company denies the allegations in the report, describing it as based on "false information." Grifols intends to seek compensation in court for the financial and reputational damage caused. Following the news, Grifols shares, which had initially dropped 26% on Tuesday, rebounded to trade 7.4% higher after the legal action announcement.

Susquehanna analysts upgraded United Airlines to positive, raising its price target to $60 from $40 per share, citing progress in its domestic initiatives. Alaska Air Group had its price target raised to $40 from $39 but was downgraded to neutral due to slowing demand and oversupply in the domestic market. Sun Country Airlines Holdings had its price target cut to $15 from $17 and was also downgraded to neutral, with a challenging setup for low-cost and ultra-low-cost airlines expected in 2024.

Aehr Test Systems shares declined yesterday after the chip equipment tester lowered its annual revenue outlook due to a slowdown in the growth rate of the electric vehicle market. The company anticipates a delay in customer orders, impacting revenue for its fiscal year 2024. Projections for twelve-month revenue were reduced by up to 25%, ranging from $75 million to $85 million. The fiscal second-quarter net revenue increased by 45% to $21.4 million compared to the same period last year, with adjusted net income rising nearly 50% to $6.7 million.

Evercore ISI analysts raised their price target for ServiceNow shares from $725 to $800, maintaining an Outperform rating. The analysts believe that the company's partner survey, including insights from 15 large ServiceNow partners, indicates positive momentum in the market. They expect modest upside in F4Q results and anticipate upward bias in 2024 estimates, highlighting the potential upside from the Pro+ SKU.

Renault is gearing up for an electric vehicle (EV) market offensive in France to compete with Tesla. The French automaker plans to introduce new EV models, including the electric Scenic and R5, to replace aging models like the Zoe and Twingo. Additionally, Renault has reduced the starting price of its Megane by 10%, aiming to gain a competitive edge in pricing against Tesla and Chinese rival MG4.

Wedbush upgraded Home Depot from Neutral to Outperform, anticipating a rebound in the home improvement industry. Despite weakened demand in 2023, factors such as healthy employment, wage growth, and continued home price appreciation are expected to drive Home Depot's Pro business segment, making it a prime beneficiary. The stock price target was raised to $380 per share.

Redburn-Atlantic downgraded Apple from Buy to Neutral, citing limited upside prospects despite expectations for iPhone growth in 2024. Concerns about a potentially lackluster March quarter and increasing regulatory risks impacting Apple's ability to monetise its ecosystem were highlighted. The price target was set at $200.00, and the forecast for Services' contribution to EPS was deemed to have limited potential for further multiple expansion.

Mizuho analysts raised Meta Platforms' price target to $470 from $400, maintaining a Buy rating. They highlighted potential upside in FY24, citing conservative revenue growth estimates, anticipated opex guidance reductions, and the attractiveness of Messaging as an optionality, especially with the potential for WhatsApp to boost Meta's revenue base through AI-driven customer service automation.

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, reported fourth-quarter revenue of T$625.5 billion ($20.10 billion), surpassing both market expectations and its own forecast. The result was largely attributed to strong demand for Apple products, growth in AI solutions, and improved dynamics in the Chinese handset market. Analysts express optimism for TSMC's outlook in 2024, particularly in servers, PCs, and handsets.

Bernstein analysts reiterated an Outperform rating and a $272 price target on Boeing amid renewed concerns over manufacturing quality. Recent inspections revealed loose bolts on multiple airplanes at Alaska and United Airlines, indicating a pattern of poor workmanship possibly originating at Spirit, one of its suppliers. The analysts stress the need for enhanced quality control and anticipate a few customers might consider switching away from the MAX. Boeing shares managed to reverse trend yesterday, rebounding by almost 1%.

STMicroelectronics is undergoing a significant restructuring effective 5th February. The reorganisation involves transitioning from three to two product groups: Analog, Power & Discrete, MEMS, and Sensors (APMS); and Microcontrollers, Digital ICs, and RF products (MDRF). The company aims to streamline operations, enhance efficiency, and intensify market-focused application marketing. Additionally, a new application marketing organisation will focus on providing comprehensive system solutions tailored to specific end markets.

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