Santa Claus Rally, Aviva's Big Deal, and MicroStrategy's Bitcoin Surge 🎅📈

Money Masters' Market Kickoff Week 52

December 23, 2024

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Dear Money Master,

As the holidays get closer, we would like to wish you all happy holidays and thank you for your continued support🎄. At Money Masters, we’re dedicated to making financial education accessible, and it’s because of you that this mission is possible. In today’s newsletter, we bring you a roundup of this week’s top financial stories: from Aviva’s $3.7 billion acquisition of Direct Line to MicroStrategy’s staggering 477% stock surge and the enduring success of Lego during the holiday season. Plus, we take a deep dive into the fascinating phenomenon of the Santa Claus Rally, exploring its history, causes, and what it means for investors. Let’s dive in! 📈

📰 Your Daily Financial Digest - December 23rd, 2024

🌍 Economics & Finance:

  1. EU-Mercosur Trade Deal Sparks Controversy 🛠️
    The EU signed a trade deal with South America's Mercosur bloc, spanning 700 million people and 20% of global GDP. Farmers oppose the tariff cuts, fearing unfair competition, while ratification faces hurdles from key member states like France. Read More

  2. Russia Holds Interest Rate at 21% Amid Inflation Concerns 📈
    Russia’s central bank maintained its key rate at 21% despite inflation hitting 9.5% in December. Rising food costs, like a 9% increase in dairy prices, are key contributors. The bank projects inflation to fall to 4% by 2026. Read More

  3. Aviva Acquires Direct Line in $3.7 Billion Deal, Plans Job Cuts 💼
    Aviva's acquisition of Direct Line for £3.7 billion includes £125 million in annual savings but will cut up to 2,300 jobs. Direct Line shares surged 3.6% to £2.52 on the news, while Aviva shares rose 0.7%. Read More

  4. Nordstrom Goes Private in $6.25 Billion Buyout 🛍️
    Nordstrom’s founding family and El Puerto de Liverpool are buying out the retailer for $24.25 per share, valuing it at $6.25 billion. The company forecasts subdued holiday sales despite a 4% revenue rise in Q3. Read More

💻 Technology:

  1. Amazon Launches 'Haul' to Rival Temu for Bargain Shoppers 🛍️
    Amazon’s "Haul" feature caps product prices at $20 and targets price-conscious shoppers. The platform gained millions of visits since its November launch, offering $2.99 phone cases and $9.98 sneakers. Read More

  2. MicroStrategy Leads Tech Stocks with 477% Gain in 2024 🚀
    Fueled by a $42 billion bitcoin investment plan, MicroStrategy’s shares soared 477% this year, making it the second-best performer among U.S. tech stocks. Its bitcoin holdings now exceed 439,000, valued at $42 billion. Read More

  3. Foxtel Sold to DAZN for $2.1 Billion in Sports-Streaming Deal ⚽
    News Corp and Telstra sold Foxtel for A$3.4 billion, including A$578 million in debt repayments. The sale gives News Corp a 6% stake in DAZN, which aims to dominate global sports streaming. Read More

  4. Lego Defies Toy Industry Slump with Innovative Growth Strategies 🧱
    Lego’s revenue jumped 13% in the first half of 2024, outperforming competitors in a declining toy market. It launched 50% new products this year, including F1 sets and digital expansions like Fortnite integrations. Read More

💹Earnings:

  1. Party City to Close All Stores Following Financial Struggles 🎈
    Party City is closing 800 U.S. stores after failing to overcome $1.7 billion in debt. It emerged from bankruptcy last year but continued to face rising costs and declining foot traffic. Read More

  2. FedEx to Spin Off Freight Division in Restructuring Move 🚚
    FedEx plans to spin off its $2.17 billion freight business to unlock $20 billion in shareholder value. The move follows a decline in U.S. industrial freight demand, offset by improved international exports. Read More

  3. Micron Shares Plunge on Weak Q2 Guidance 📉
    Micron’s shares dropped 13% after Q2 revenue guidance of $7.9 billion missed expectations of $8.98 billion. Despite this, the company highlighted AI ventures as a growth driver. Read More

🔍 🌟 Deep Dive: The Santa Claus Rally – Myth or Market Reality? 🎅📈

The "Santa Claus Rally" is a historic phenomenon where markets tend to rise during the last week of December and the first two trading days of January. Since 1950, the S&P 500 has posted gains in this period about 75% of the time, averaging a 1.3% return.

Why It Happens:

  • Holiday Optimism: Festive cheer boosts market sentiment.

  • Tax Strategies: Investors sell underperforming stocks and reinvest before year-end.

  • Lower Volumes: Thin trading allows price increases.

  • Bonus Investing: Year-end bonuses fuel stock purchases.

While the rally often brings good tidings, it’s no guarantee of market strength. In fact, a weak rally could indicate a bearish year ahead. As always, investors should stay informed and balanced during this period.

📊 Fun Fact: The Dow gained 1.7% in the 2023 Santa Claus Rally—its best year-end performance since 2019!

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🎄 Wishing you Happy Holidays, The Money Masters Team

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Disclaimer: This information is for educational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making investment decisions.