Trading Observations

• Not exactly the end of the year we were hoping for, but we expected!

• Govt shutdown if it happens, a real issue for the market

• Rates need to stabilize for us to find footing

• US Nov. Core PCE Rose 0.1% M/m, Below Est helping futures and the 10 year.

• FDX higher on spinoff, NKE lower on weak guidance

• Pulled all the way back to 5865 support (which will break on the open) opening the door to 5765 if we can't reclaim 5865 quickly.  5924 (50-day) first resistance on the way up.... 

• For perspective, RSP down 7% (with RSI now most oversold since Mar 2020), IWM down 10% in DEC while Nazz +0.8%, and S&P -3%

• Either we crash, or so oversold we bounce (I think the latter more likely unless rates move higher QUICKLY)

Billionaire DOGE Insider Teases Musk's 'Really Bold' Plans To Drain Swamp: 'A Lot of Stuff Ready For Day One' https://www.zerohedge.com/political/billionaire-doge-insider-teases-musks-really-bold-plans-drain-swamp-lot-stuff-ready-day [zerohedge.com]

Upgrades – AFRM, ARES, BB, EAT, BRKL, CAC, DASH, EVR, FRT, FDX, FREY, INVZ, KRC, MC, NKE, SR, STT, TW, WTW

Downgrades – BIIB, CABA, EXEL, HR, HOOK, KIM, LW, LAZ, LEN, LINE, MRK, NKE, PBF, RXST, SPRO

Futures

DOW -156

S&P -36

Nasdaq -183

10-Year Yield

Oil

BITCOIN

Consumer/Financial/Healthcare

Crypto Names – MARA, SOFI, COIN, HOOD all lower 1-3% on negative crypto pricing and risk off.

JPM on Banks – Expect large banks to be “choppy” in 1H and depends on policy changes 2H. P/TBV at 1.6x is above 1.3x average. They like PNC, WFC, BAC and Trust banks in general.

BUYBACK BID EVAPORATING: 40% of companies will be in the black out window as of December 20 ... and it will fade further

KR – announces agreement for $5B accelerated buyback

IONS wins FDA ok for drug to treat rare metabolic disease – Bloomey

Novo Nordisk’s next gen obesity drug CagriSema data disappoints (LLY & VKTX higher pre mkt)

NKE - slipped in premarket trading as the sportswear brand said revenue for the current period will decline at a faster rate than the past quarter

Technology

NVDA - Reiterated Top Pick at MS

GTLB: top pick @ Macquarie - based on perception of a significant valuation discount and catalysts that could include FY26 revenue outperformance, margin expansion, improving Rule of 40 scores, and strong FCF generation ...

INTC white knight? Broadcom plays down the potential for it to make a bid for Intel (FT)

RDDT: new buy @ Gugg, PT $210 .... Citi PT hikd to $200 - increased ests to reflect advertiser checks, Reddit's contd engagement strength, and newer product launches such as Reddit Answers.

Semicap Demand: Tokyo Electron says AI-related demand will help offset weakness in China (Nikkei)

SMCI: called upon by Nvidia to make sure its GPUs aren’t illegally being sold to customers in China

VRT: announced the acquisition by its Chinese subsidiary of certain assets and technologies of BiXin Energy Technology Co., a manufacturer of chillers, heat pumps, heat-recovery solutions and air-handling units

Industrials 

Blackberry (BB) upgraded to buy at TD Cowen

Boeing (BA) targeting production of 38 737 Max's per month in May 2025 - Air Current, citing people familiar with the company's plans

Boeing big win (hit yest)…. secures firm order from Turkish low-cost carrier Pegasus Airlines worth ~$6B – Reuters

Clearwater Paper (CLW) - Suzano considering offer for Clearwater Paper - Bloomberg

FedEx (FDX) upgraded to buy at Loop Capital Markets.  Shares jumped after the company said it will spin off its freight division.

Lennar (LEN) downgraded to neutral from buy at BTIG

X - warned its 4Q earnings will be lower than anticipated as steel prices remain depressed in the US and as the demand environment in Europe is weak. Stock -5.5% pre mkt

CCI - higher on reports it’s close to $8B sale of fiber unit to TPG

Tesla's latest Cybertruck launch is stumbling, with steep prices and its unique design failing to captivate traditional truck enthusiasts, cooling demand despite previous delivery successes. Tesla's 2024 deliveries growth might hinge on Musk's unorthodox Cybertruck [msn.com]

Softer seasonality … think ppl were talking about the Santa rally back in Sept (which was sensible)