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😳Honda & Nissan Might Merge...

+ Dow’s Nine-Day Slide — Is It Really That Bad?

December 17, 2024

Good afternoon! Amazon’s holiday cheer might take a hit. Over 5,500 unionized warehouse workers and delivery drivers in NYC voted to authorize a strike just days before Christmas. The timing isn’t accidental—workers are pushing for better wages, safer conditions, and job security during Amazon’s peak shipping season. While the strike isn’t guaranteed, it’s a powerful bargaining chip against a company that hasn’t even formally recognized the union.

Adding to the chaos: A Senate report dropped over the weekend accusing Amazon of manipulating injury data and discouraging workers from seeking proper medical care. Pair that with corporate employee backlash over a strict return-to-office mandate, and Amazon’s workforce troubles are piling up faster than Prime deliveries.

MARKETS

*Stock data as of market close*

  • The Dow stumbled into the history books Tuesday, logging its ninth straight losing session—its longest streak since disco was still king in 1978. The blue-chip index dropped 268 points, or 0.6%, to close at 43,449.90, dragging the S&P 500 and Nasdaq down 0.4% and 0.3%, respectively.

  • The slide comes just weeks after the Dow hit a fresh milestone above 45,000, making its recent slump all the more dramatic. With stocks sinking across the board, investors are eyeing upcoming economic data for signs of relief—or at least a reason to stop the bleeding.

STOCKS
Winners & Losers

What’s up 📈

  • Quantum Computing skyrocketed 51.53% after NASA awarded the company a prime contract to support advanced imaging and data processing needs using its entropy quantum optimization machine, Dirac-3. ($QUBT)

  • Teva Pharmaceuticals soared 26.47%, and Sanofi gained 6.65% after announcing positive Phase 2b results for duvakitug, their joint treatment for moderate to severe inflammatory bowel disease. ($TEVA, $SNY)

  • SolarEdge Technologies popped 16.64% on a rare double upgrade from Goldman Sachs, moving the stock from “sell” to “buy” on expectations of a turnaround in 2025. ($SEDG)

  • Pfizer climbed 4.67% after issuing its 2025 revenue guidance in line with Wall Street’s expectations, projecting revenue between $61 billion and $64 billion. ($PFE)

  • Tesla rose 3.64% after Mizuho upgraded the stock to “outperform,” citing potential benefits from anticipated Trump administration regulatory changes. ($TSLA)

  • Manchester United gained 3.05% after UBS initiated coverage with a “buy” rating, highlighting the football club’s superior revenue base and future profitability potential. ($MANU)

What’s down 📉

  • Amentum Holdings slid 9.55% after reporting a pro forma loss of 21 cents per share for its fiscal Q4, down from a profit of 17 cents a year ago. ($AMTM)

  • Red Cat tumbled 7.46% after the drone company posted a fiscal Q2 loss of 18 cents per share, larger than last year’s 11-cent loss. ($RCAT)

  • Broadcom fell 3.91% as investors took profits following its recent rally, even after the company’s strong Q4 results. ($AVGO)

  • Affirm Holdings dipped 2.70% after announcing a $750 million convertible senior note offering, along with plans to repurchase $300 million of its Class A common stock. ($AFRM)

  • Nvidia slipped 1.22%, continuing its decline amid ongoing investor caution despite its leadership in AI chips. ($NVDA)

AUTO
Honda and Nissan Might Merge to Take on the Big Dogs

Honda and Nissan—two of Japan’s auto heavyweights—are reportedly kicking the tires on a potential merger that could reshape the global car game. The alliance would create a combined force capable of challenging Toyota at home and Tesla, plus those nimble Chinese EV makers abroad.

From Rivals to Ride-Sharers

Talks are still in the “what if we…” phase, but reports suggest the companies could form a shared holding company. Nissan’s 24% stake in Mitsubishi means the smaller automaker might join the party too, turning this into Japan’s most significant automotive shakeup since your dad gave up his stick shift. Together, the trio could clock 8 million vehicles a year, still a few laps behind Toyota’s 11 million, but enough to put some pressure on the global leaders.

For Nissan, it’s a much-needed tow. The automaker’s operating income nosedived 90% this year amid struggles in the U.S. and China. Honda, meanwhile, has been hustling to keep its EV ambitions alive while wrestling with rising development costs. A merger could streamline production and tech investment—two essentials for staying relevant in the EV race.

The Toyota Problem

Toyota has been eating everyone’s lunch, pulling smaller players like Subaru, Suzuki, and Mazda under its wing to dominate the EV-hybrid market. A Honda-Nissan team-up could help level the playing field. Think shared EV batteries, consolidated R&D, and enough scale to punch back against Tesla and China’s BYD, which are sprinting ahead in electric cars.

Still, merging two fierce rivals is easier said than done. There’s overlap in their lineups, deep cultural differences, and, you know, decades of competition. As one analyst quipped, “They might share the road, but they’re not always driving in the same direction.”

Markets Hit the Gas

Investors love a comeback story, and Nissan’s stock surged 22% on the news, while Honda’s dipped 1.2%, as traders weighed the risk of pairing two struggling players.

If this sounds like déjà vu, that’s because Nissan’s been here before. Its long and messy relationship with France’s Renault ended in a complicated corporate divorce. Now, Nissan’s searching for a new partner to help it avoid stalling out.

The Big Picture: In an EV era where bigger equals better, this potential merger underscores a simple truth: carmakers need scale to survive. If Honda and Nissan can pull this off, they’d become the David to Toyota’s Goliath—a true heavyweight challenger in a market where the only real sin is being too small to matter.

NEWS
Market Movements

MARKETS
Dow’s Nine-Day Slide — Is It Really That Bad?

The Dow Jones Industrial Average just wrapped up its ninth straight losing day, marking its longest skid since 1978. While headlines scream “historic slump,” the story under the hood isn’t quite as dire—though it might feel like a blast from the Carter administration.

What’s Dragging the Dow Down?

Let’s talk about the index’s biggest weight: UnitedHealth Group. Shares of the healthcare giant have tumbled 21% since December 4th, when tragedy struck with the fatal shooting of its insurance CEO, Brian Thompson. Combine that with President-elect Trump’s recent vow to “knock out” healthcare middlemen like UnitedHealth, and you’ve got a recipe for investor panic.

But UnitedHealth isn’t alone. Cyclical stocks like Sherwin-Williams and Caterpillar—which surged post-election on hopes for deregulation and infrastructure spending—have since lost steam. Even Nvidia, a star player in 2024, is down 10% during the slump.

Not All Markets Are Moping

Here’s the kicker: the Dow’s funk isn’t dragging everyone down. The S&P 500 is holding strong near record highs, and the Nasdaq Composite hit an all-time high just yesterday, thanks to megacap tech’s ongoing dominance. Stocks like Amazon, Microsoft, and Apple are all thriving, but their wins barely register in the Dow’s quirky price-weighted formula, where share price matters more than market value.

In other words, the Dow’s losses aren’t a reflection of the broader market—it’s more of an index anomaly.

So, Should You Worry?

Here’s a little perspective: the Dow is only down 3.5% from its December 4th highs. That’s not even close to a correction, which kicks in at a 10% drop. More importantly, history is on investors’ side. December’s second half typically sees markets recover as traders ride seasonal trends into the new year.

Plus, Wall Street pros remain optimistic about 2025. If anything, this dip could be a “pause that refreshes,” as some strategists like to say—especially with the Federal Reserve decision on deck this week.

The Takeaway:The Dow’s nine-day losing streak may look grim, but let’s not confuse noise with signals. Tech stocks are booming, the broader market is in good shape, and this pullback might just be a breather before the bulls take over to close out 2024.

So breathe easy, Dow-watchers.

Calendar
On The Horizon

Tomorrow

Sure, tomorrow we'll get some housing stats—like new builds and building permits—to gauge where the real estate supply is heading. But let's face it, the main event is the Fed.

The Federal Open Market Committee is wrapping up its last meeting of the year, and the market's betting big (over 95% odds) on another interest rate cut. But here's the kicker: this might be the final slice for a while, especially with 2025's uncertainties casting a shadow. Jerome Powell's words have been market movers all year, so tomorrow's decision feels like the grand finale in this monetary saga.

After Market Close:

  • Micron Technology has been lagging behind its semiconductor peers, but investors are banking on brighter days ahead. Unlike Nvidia, Micron doesn’t make GPUs; it’s all about the memory market, where demand is expected to boom as AI continues to evolve. Wall Street hasn’t lost faith despite a sluggish year—23 out of 24 analysts still have a “buy” rating on the stock, with just one cautious “hold” in the mix. Now it’s up to Micron to prove them right. Consensus: $1.76 EPS, $8.55 billion in revenue. ($MU)

NEWS
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