Key Takeaways

1. Icosavax's Stock Surges 45.9% Pre-market on AstraZeneca's Acquisition;
2. Cathie Wood Increases Holdings in Microsoft and Meta
3. Epic Games Wins Antitrust Fight Against Google Over App Store Monopoly
4. Anticipated CPI Decline Could Influence Fed's Rate Decision
5. Strategist Warns: U.S. Economy May Face Severe Recession Early Next Year

I. Market Report

Stock futures rose slightly Tuesday as Wall Street looks to see if the market rally can power through another round of inflation data.

As of 08:00 am, EST (or 21:00 in Malaysia), futures tied to the Dow Jones Industrial Average ticked up 63 points, or 0.17%. S&P 500 futures oscillated near the flat line, and Nasdaq 100 futures inched higher by 0.25%.

II. Pre-Market Movers

As of 07:50 am, EST (or 20:50 in Malaysia), top premarket movements are as follows:

Ticker	Chg%	Company
SVMHW	142.23%	$SRIVARU Holding Ltd. Warrants (08/12/2028) SVMHW$
CCCC	70.33%	$C4 Therapeutics, Inc. CCCC$
ICVX	46.99%	$ICOSAVAX, INC. ICVX$
HCDI	-34.86%	$HARBOR CUSTOM DEVELOPMENT INC HCDI$
CCLDP	-34.1%	$CareCloud, Inc. - 11% Series A Cumulative Redeemable Perpetual Preferred Stock CCLDP$
ACHV	-27.53%	$Achieve Life Sciences ACHV$

Dearest M+Global Mobile App Users: We are pleased to inform you that our app now supports pre/after-market trading for US stocks. The trading hours for these sessions are as follows:

• Pre-market: 17:00 to 22:30 in Malaysia
• After-hours market: 05:00 to 09:00 the next day in Malaysia

Please note that regular trading hours are from 22:30 to 05:00 UTC.

III. Flash Headlines

At 21:30 GMT+8 on Tuesday, the US Department of Labor will release the November CPI inflation data. The market widely believes that the downward trend in inflation has not changed.

Anticipated CPI Decline Could Influence Fed's Rate Decision

In November, US CPI is predicted to drop to 3.1%, the lowest since June, with core inflation potentially cooling to below 3% in early 2024. The Federal Reserve, expected to maintain rates, may pivot to an easing stance if these trends continue. This comes before the Fed's last decision of 2023, with Wall Street awaiting CPI data to gauge the disinflation trend. HSBC's Georgios Leontaris emphasizes central banks' reliance on data, noting challenges in convincing markets.

Bond Experts Predict Treasury Yield Rise to 4.5% by 2024 End

Top bond forecasters from Goldman Sachs and RSM predict a rise in the 10-year Treasury yield to around 4.5% by end of 2024, countering the strong year-end rally of 2023. They caution against underestimating economic strength and inflation persistence, noting market overconfidence in early Fed policy easing. Their outlook follows 2023's accurate predictions and suggests a market correction, with the Fed potentially maintaining higher rates to control inflation.

Strategist Warns: U.S. Economy May Face Severe Recession Early Next Year

Paul Dietrich of Briley Wealth forecasts a severe U.S. recession in early 2024, noting recession signals. The S&P 500's record gain in November and its 20% yearly rise signal a pre-recession trend. Labor market weakness, including a high of 1.93 million continued unemployment claims, reinforces this outlook. Contrasting with this bleak outlook, Wall Street strategists expect a positive 2024 for the stock market, with predictions of the S&P 500 reaching new highs.

2024 Facing Dire Economic Outlook Amid Geopolitical Tensions

2023's economic losses from geopolitical conflicts could be the highest post-WWII, with ongoing risks into 2024. A Natixis SA survey highlights geopolitical tensions as the major threat to 2024's economy and markets, citing the Russia-Ukraine conflict and U.S. elections. UNCTAD predicts a 5% global trade decrease, while investors worry about AI's impact and advocate for defensive strategies.

JPMorgan to Divest Local Custody Business in Hong Kong, Taiwan

JPMorgan Chase ($JPMorgan Chase & Co. JPM$ ) is set to divest its local custody operations in Hong Kong and Taiwan, with Citigroup ($Citigroup Inc. C$ ), HSBC (HSBA.L), and Standard Chartered (STAN.L) as potential successors. The bank, holding $520 billion in client assets under custody (AUC) in these markets, aims to focus on global custody services. This move follows a trend of exiting lower-margin local custodian businesses in Asia Pacific, influenced by macroeconomic uncertainties and a shift in asset flows. Financial details of the deal and the timeline for completion are not disclosed.

IV. Stocks to Watch

AstraZeneca to Acquire Vaccine Maker Icosavax in ~$1.1B Deal

In a bid to strengthen its respiratory syncytial virus (RSV) vaccine portfolio, AstraZeneca ($Astrazeneca PLC Sponsored ADR AZN$ ) has agreed to acquire U.S. vaccine developer Icosavax ($ICOSAVAX, INC. ICVX$ ) in a deal valued at up to $1.1B.

The deal values Icosavax at $15/share in cash at closing, plus a non-tradable contingent value right for up to $5/share in cash if certain milestones are met. The upfront cash portion represents a premium of 43% to Icosavax's closing price on December 11. As of 19:50 GMT+8, Icosavax's stock surges 45.9% pre-market.

Epic Games Wins Antitrust Fight Against Google Over App Store Monopoly

Epic Games, which makes the popular video game Fortnite, has won its high-profile antitrust case against Alphabet's ($Alphabet Inc. Class C GOOG$ ) ($Alphabet Inc. Class A GOOGL$ ) Google after a jury found that the search giant's Play app store is operating as an illegal monopoly.

The jury on Monday found that Google had monopolized the Android app distribution and payments market by charging app developers high fees of up to 30% and striking side deals with rivals to fend off competition. The court will now decide if Google should allow payment and app distribution outside the Play store.

Cathie Wood Increases Holdings in Microsoft and Meta

Cathie Wood has once again increased her holdings in Microsoft $Microsoft Corporation MSFT$ , increasing her bet on major US tech companies involved in artificial intelligence. Data shows that Ark Next Generation Internet ETF ($ARK Web x.0 ETF ARKW$ ) purchased 8,810 shares of the company on Monday, marking the first increase in holdings since March 20. In addition, the fund also purchased 10,212 shares of Meta Platforms $Meta Platforms META$ , the parent company of Facebook, marking its first purchase in five months.

Warren Buffett's Berkshire Hathaway Halves Stake in HP

Warren Buffett's Berkshire Hathaway ($Berkshire Hathaway Inc. Class A BRK.A$ ) ($Berkshire Hathaway Inc. Class B BRK.B$ ) has reduced its stake in HP ($HP Inc. HPQ$ ) by half to 5.2%, or 51.5M shares worth ~$1.56B as of Nov. 30, according to a regulatory filing. This is the second consecutive quarter that Berkshire has sold its holdings in HP.

Bristol Myers, SystImmune to dDevelop Cancer Drug in up to $8.4B License Deal

Bristol Myers Squibb ($Bristol-Myers Squibb Company BMY$ ) said on Monday it will pay SystImmune $800M in an upfront payment and up to $500M in contingent near-term payments to develop and commercialize one of the latter's cancer therapy. SystImmune, a U.S.-based enterprise company of Chinese drugmaker Sichuan Biokin Pharmaceutical, entered into an exclusive license and collaboration deal with Bristol Myers (BMY) to co-develop and co-commercialize its EGFRxHER3 bispecific antibody-drug conjugate, BL-B01D1, in the U.S. SystImmune is also eligible to receive additional payments of up to $7.1B if certain milestones are met for a total potential consideration of up to $8.4B.

Pinduoduo's Temu Becomes Americans' Favorite Shopping App, Usage Time Nearly Double that of Amazon

Data from research firm Apptopia shows that American consumers spend almost double the amount of time on Temu (Pinduoduo's $PINDUODUO INC. PDD$ overseas version) compared to major competitors like Amazon $Amazon.com, Inc. AMZN$ . According to Apptopia's device-level analysis, users spent an average of 18 minutes per day on the Temu app in the second quarter, while Amazon had 10 minutes and Alibaba's global AliExpress had 11 minutes. Among young users, daily usage time on Temu reached 19 minutes.

V. Calendar

Earnings:

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Expected IPO:

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Please note that the timing of IPOs is subject to change at any time (including being advanced or delayed). Investors should therefore keep up-to-date with relevant news.

Events:

21:30 GMT+8 USD Core CPI (YoY) (Nov)
21:30 GMT+8 USD Core CPI (MoM) (Nov)
21:30 GMT+8 USD CPI (MoM) (Nov)
21:30 GMT+8 USD CPI (YoY) (Nov)

01:00+1 GMT+8 USD EIA Short-Term Energy Outlook
02:00+1 GMT+8 USD 30-Year Bond Auction
03:00+1 GMT+8 USD Federal Budget Balance (Nov)
05:30+1 GMT+8 USD API Weekly Crude Oil Stock

For the whole week's Calendar, please check out our Weekly Watch column:
Weekly Watch | Fed's Final Rate Decision in 2023 Looms This Week; Oracle, Adobe, Costco Gear up to Print; Yan Palace HK IPO

Finally, just a little reminder:

The regular trading hours for US stocks in the Winter Time are from 22:30 to 05:00+1 GMT+8, with pre-market trading available from 17:00 to 22:30.

Have a nice trading day!

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