My top 10 things to watch Wednesday, Dec. 18
1. A broad consensus is developing that the Federal Reserve should wait to cut interest rates again after its expected 25-basis-point move Wednesday afternoon. But there are two economies, the industrial (home, autos) and the materials (commodities), that make it so we can’t afford to wait.
2. Wall Street was mixed Wednesday after the Dow closed lower for the ninth straight session for the first time since 1978. After we hear from the Fed on rates, and especially any hints on the path forward, Club members can join us for the livestream of our Monthly Meeting on Thursday at noon ET.
3. According to analyst estimates, Microsoft bought 485,000 Nvidia chips, nearly twice as many as others. Nvidia shares, which dropped into correction territory this week, bounced early Wednesday. As of Tuesday’s close, Nvidia declined in eight out of the past nine sessions. Both Nvidia and Microsoft are Club names.
4. Is there enough money to speculate on everything? On Tuesday, an insane amount of money went into the quantum stocks following Club name Alphabet’s recent quantum computing advance. A few smaller market cap stocks have soared into the $2 billion neighborhood.
5. Union workers at Club name Starbucks authorized a strike. Is the honeymoon over for new CEO Brian Niccol after 100 days on the job? More than 500 company-owned Starbucks locations are unionized. The coffee giant has nearly 17,000 total stories in the U.S.
6. Morgan Stanley named Club holding Disney a top pick. The analysts identified distribution as a mega-trend in media and think Disney has the “greatest potential” the likes of Netflix as a content distribution leader.
7. Salesforce is increasing hiring because of Agentforce, the Club holding’s artificial intelligence customer service agents. The broad commercial carpet bomb has started, too. The demand for these agents is extremely high. Salesforce said that 2,000 people are being hired, double the count from a month ago.
8. The New York Times reports a rift over obesity treatments between two key figures in President-elect Donald Trump’s orbit: Elon Musk, picked to co-lead a department of efficiency, and RFK Jr., chosen to lead HHS. The latter told me last week when Trump rang the opening bell at the NYSE that a healthy lifestyle should be the first response over weight-loss drugs.
9. Merck has agreed to a $2 billion deal with Hansoh Pharma to develop and sell the Chinese biotech’s experimental oral obesity drug. The treatment is said to work in a similar way as the popular weight-loss treatments Wegovy from Ozempic-company Novo Nordisk and Zepbound from Club name Eli Lilly.
10. Citi analysts lowered their Dupont price target to $92 per share from $98. I want to take the other side of the trade for this Club stock. We like it for the break-up that’s coming to unlock shareholder value.
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