Israel and Hezbollah – Peace on the way?
Israel and Hezbollah reached the first step towards ending their conflict after agreeing to a cease-fire following weeks of US mediated talks.
- The 60-day truce began at 4 a.m. local time Wednesday morning and no reports of early violations have been made so far
- As part of the cease-fire Hezbollah is meant to remove fighters and weapons from the border region in South Lebanon and move north of the Litani River (30km from the border)
- One key obstacle to the deal was Israel’s insistence on being able to continue striking if it sees breaches in the agreement
- Oil and gold have fallen this week on optimism for such a deal – investors betting that tensions will ease between Israel and Iran
Trump’s New Tariffs threats
- President-elect Donald Trump vowed additional tariffs on China as well as US neighbors Canada and Mexico
- Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada
- These threats came just days after he tapped Scott Bessent to be the next US Treasury secretary, a move that was seen as a promising sign for those seeking a more measured tariff stance
- Bessent made his program’s targets explicit by pragmatically summarizing them as follows, “3-3-3”: 3% deficit – 3% growth – 3 mln b/d increase in oil production
- Regarding tariffs, he wrote that they can play a central role in achieving the president’s foreign policy goals
Seasonal pattern for US Stocks?
Discounting any more Trump surprises, this week kicks off a run of strong seasonal patterns for US stocks. Since 1950, from the Tuesday before Thanksgiving to the second trading day of the New Year, the S&P 500 has risen 80% of the time, with an average gain of 2.6%.
Small caps do even better, with the Russell 2000 averaging a 3.3% jump since its inception in 1979.
Nvidia Blackwell Gains Intact
- Nvidia again beat 3Q sales consensus (+5.51%), but the 4Q outlook showed only modest outperformance, albeit against a widely dispersed set of overly optimistic estimates
- The 4Q guidance is likely hampered by ongoing Blackwell shipment constraints. Despite this, demand from cloud providers (50% of data-center sales) remains robust, with rising capex projected for 2025
- Blackwell delay concerns should ease as the CEO affirmed several billion dollars in 4Q sales as shipments surpass prior expectations
- Gross margin is expected to compress toward the low-70s in 4Q and 1H as Blackwell generates lower margins, though may recover to the mid-70s by 2H once the GPU is fully ramped up
Hungry Hungry UniCredit
UniCredit has made an unexpected and unsolicited €10 billion bid for domestic rival Banco BPM. The initial bid has been rejected.
- Under the offering UniCredit values Banco BPM at 6.657€ a share. Shares of Banco BPM rose to above 7€ indicating investors see potential for the bid to be raised
- Italy is actively pursuing to foster domestic consolidation but might not favor the move as it seeks to create a third big lender along side UniCredit and Intesa – earlier this month Banco BPM had purchased a 5% stake in Banca Monte dei Paschi di Siena
- A few months ago UniCredit had set its eyes on the German lender Commerzbank but the deal faced serious political opposition and delays
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