Market Overview

The stock market initially showed signs of recovery after major indices experienced significant declines due to the Federal Open Market Committee's decision, which indicated that interest rates are expected to remain elevated for an extended period. The market breadth was positive, with gains in mega-cap stocks providing an additional boost. However, as the session progressed, conditions worsened, resulting in the S&P 500 and Nasdaq Composite closing 0.1% lower than the previous day. This decline was attributed to rising interest rates and a downturn in mega-cap stocks.

Mega Cap Stocks Performance

- Microsoft (MSFT): Closed at 437.03, down 0.36 (-0.1%) - Alphabet (GOOG): Closed at 189.70, down 0.45 (-0.2%) - Meta Platforms (META): Closed at 595.57, down 1.62 (-0.3%)These stocks initially saw gains, with MSFT up as much as 1.3%, GOOG up 2.3%, and META up 2.4% during the session, before declining as the market weakened.

Impact of Earnings Reports

Disappointing earnings and guidance from certain companies contributed to the negative sentiment:- Micron (MU): Closed at 87.09, down 16.81 (-16.2%) - Lennar Corp. (LEN): Closed at 138.40, down 7.53 (-5.2%)This negatively affected stocks in their respective sectors, with the SPDR S&P Homebuilder ETF (XHB) down 2.2% and the PHLX Semiconductor Index (SOX) down 1.6%.

Notable Stock Performances

Some stocks managed to rise despite the market downturn, particularly ahead of their earnings reports:- FedEx (FDX, Financial): Closed at 275.88, up 2.72 (+1.0%) - NIKE (NKE, Financial): Closed at 77.10, up 0.20 (+0.3%) - Carnival Corp. (CCL): Closed at 25.18, up 0.36 (+1.5%)

Central Bank Decisions

- The Bank of England decided by a 6-to-3 vote to maintain its benchmark rate at 4.75%. - The Bank of Japan voted 8-to-1 to keep its benchmark rate unchanged at 0.25%.

Year-to-Date Index Performance

- Nasdaq Composite: +29.1% - S&P 500: +23.0% - Dow Jones Industrial Average: +12.3% - S&P Midcap 400: +11.7% - Russell 2000: +9.6%

Economic Data Review

- Weekly Initial Claims: 220K (consensus 237K); previous 242K - The low level indicates employers' reluctance to lay off staff. - Q3 GDP - Third Estimate: 3.1% (consensus 2.8%); previous 2.8% - Despite being dated, it highlights the surprising strength of the U.S. economy amid rate hikes.- December Philadelphia Fed Index: -16.4 (consensus 3.0); previous -5.5- November Existing Home Sales: 4.15 million (consensus 4.10 million); previous 3.96 million - Lower mortgage rates have driven sales, but rising rates may temper future strength due to affordability issues.- November Leading Indicators: 0.3% (consensus -0.1%); previous -0.4%

Upcoming Economic Releases

- Friday at 8:30 ET: - November Personal Income (consensus 0.4%; previous 0.6%) - Personal Spending (consensus 0.5%; previous 0.4%) - PCE Prices (consensus 0.2%; previous 0.2%) - Core PCE Prices (consensus 0.2%; previous 0.3%)- Friday at 10:00 ET: - Final December University of Michigan Consumer Sentiment (consensus 74.2; previous 74.0)

Global Markets and Commodities

- Europe: - DAX: -1.2% - FTSE: -1.1% - CAC: -1.2%- Asia: - Nikkei: -0.8% - Hang Seng: -0.6% - Shanghai: -0.4%- Commodities: - Crude Oil: -0.57 @ 69.38 - Natural Gas: +0.21 @ 3.59 - Gold: -45.50 @ 2608.10 - Silver: -1.35 @ 29.41 - Copper: -0.08 @ 4.08

MSFT,GOOG,META,MU,LEN,FDX,NKE,CCL

Guru Stock Picks

Third Avenue Value Fund has made the following transactions:

• Reduce in LAZ by 35.7%
• Sold out in TSE:3382
• Add in LSE:HBR by 4.27%

Today's News

FedEx (FDX, Financial) announced its intention to pursue a tax-free separation of its FedEx Freight division, creating two publicly-traded entities. This move, expected to be completed within 18 months, led to a more than 10% increase in FedEx shares during after-hours trading. The separation aims to unlock value for FedEx's Freight business, which reported $9.4 billion in revenue this year. UPS (UPS, Financial) shares also rose by 1% following the announcement.

Nike (NKE, Financial) reported its Q2 financial results, with a GAAP EPS of $0.78, surpassing expectations by $0.15. The company's revenue reached $12.35 billion, beating estimates by $240 million, although it was down 7.8% year-over-year. Nike Direct revenues fell by 13% on a reported basis, and wholesale revenues decreased by 3%. The company's gross margin decreased by 100 basis points to 43.6%, with inventories remaining flat at $8 billion.

Vertex Pharmaceuticals (VRTX, Financial) was downgraded by Oppenheimer to "perform" from "outperform" due to mixed Phase 2 data for its drug suzetrigine, used in treating lumbosacral radiculopathy. The downgrade reflects concerns about the drug's benefit/risk profile and commercial potential. Despite this, Vertex remains an industry leader in cystic fibrosis and rare diseases, with several upcoming catalysts.

Lumen Technologies (LUMN, Financial) saw a 5% increase in its stock price after reports emerged about the company's plans to sell its consumer fiber operations, valued between $6 billion to $9 billion. Lumen is working with investment banks to explore options, including selling a stake or forming a joint venture for its fiber assets.

Hims & Hers Health (HIMS, Financial) experienced a 7% drop in early trading after the FDA announced no shortage of Eli Lilly's (LLY) GLP-1 medication tirzepatide. This decision impacts companies like Hims, which sell compounded versions of GLP-1 therapies. The FDA's stance will remain until early 2025 to prevent treatment disruptions.

Intel (INTC, Financial) is exploring the sale of its Altera unit, with potential buyers including Lattice Semiconductor (LSCC, Financial) and several investment firms. The sale process, expected to conclude with offers by the end of next month, could see Altera valued between $9 billion and $12 billion. Intel acquired Altera in 2015 for approximately $17 billion.

Fox News (FOXA, Financial) announced the departure of longtime anchor Neil Cavuto as his contract expires. Cavuto, known for his critical views on political figures, is leaving after reportedly being offered a lower salary. His departure marks the end of a 28-year career with the network, with no replacement named yet.

Aptose Biosciences (APTO, Financial) received an extension from Nasdaq to meet listing requirements, needing to achieve a minimum of $2.5 million in shareholders’ equity by March 31, 2025. The company must also comply with the minimum bid price requirement of $1.00 per share for continued listing.

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