وَلَا تَلْبِسُوا۟ ٱلْحَقَّ بِٱلْبَـٰطِلِ وَتَكْتُمُوا۟ ٱلْحَقَّ وَأَنتُمْ تَعْلَمُونَ
And do not mix the truth with falsehood or conceal the truth while you know [it]. (Qur’an, 2:42)
Market Snapshot
▼ S&P 500 -2.16%
▼ SPUS -1.56%
▼ MSCI World Islamic -2.13%
*Market data for last week ending Friday
Last Week’s Review
Micron Earnings:
Micron reported Q1 revenue of $8.71B, up 84% YoY, and EPS of $1.79, both slightly above estimates. Despite strong AI memory chip demand, shares fell 13% due to weaker Q2 guidance of $7.9B, below the expected $8.94B.
Nike Earnings:
Nike’s Q2 results exceeded expectations with EPS of $0.78 and revenue of $12.35B, despite a 7.7% YoY drop. CEO Elliott Hill outlined recovery efforts but warned of continued revenue declines in the near term.
Federal Reserve Decision:
The Fed reduced rates by 0.25% to 4.25%-4.5%, marking its fourth cut this year. Markets reacted sharply, with the Dow dropping over 1,100 points, as the Fed signaled a slower pace of rate cuts in 2025.
This Week’s Outlook
Consumer Confidence Index (December 23):
The Conference Board will release its December Consumer Confidence Index, with expectations set at 113, an increase from November’s 111.7. This index measures consumer optimism regarding the economy and is closely watched as a leading indicator of holiday spending trends and potential market sentiment heading into the new year.
Holiday Market Hours:
Markets will operate on a shortened schedule this week. U.S. stock markets will close early on Tuesday, December 24, at 1 p.m. ET, and will remain closed on Wednesday, December 25, in observance of the Christmas holiday. These reduced hours may lead to lower trading volumes and increased volatility.
Curated Reads
U.S. Probes Chinese Legacy Semiconductors
The Biden administration has launched a probe into China’s legacy semiconductor industry, citing non-market practices that harm competition and create supply chain vulnerabilities in key sectors. The investigation, which may lead to tariffs, reflects ongoing U.S. efforts to curb reliance on Chinese technology and will carry over to the Trump administration. [Read]
Honda and Nissan Merger Talks Aim to Reshape Auto Industry
Honda and Nissan have entered official merger discussions to create the world’s third-largest automaker by sales. The deal, expected to finalize by June 2025, seeks to enhance competitiveness in EVs and intelligent driving through resource sharing and economies of scale. If successful, the combined entity could deliver $191.4 billion in annual revenue. [Read]
The ‘Weight-Loss Trade’ Faces a Crossroads
The initial investor excitement around GLP-1 weight-loss drugs, such as Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, has cooled as supply challenges, regulatory uncertainties, and lofty expectations weighed on the market. Despite setbacks, including earnings disappointments and underwhelming trial results for Novo’s CagriSema, analysts remain optimistic about the long-term potential. The sector’s future hinges on scaling production, regulatory clarity, and the successful launch of next-generation treatments, such as oral alternatives, which could dramatically expand accessibility and market size. [Read]
Chart of the Week
This week, there is no “Chart of the Week” as we don’t see any new opportunities that align with our investment philosophy. Our focus is on delivering the best research, and when there’s nothing worth highlighting, we’re comfortable stepping back.
All our previous picks remain on track, with no significant changes to report. We’ll provide updates if and when conditions shift, maintaining our commitment to high-quality analysis.
Your Questions
Are ETFs that are engaged in swap agreements permissible?
Derivatives are not permissible. Therefore, such ETFs will not be compliant. (Answered by Faraz Omar, AAOIFI Certified Shariah Advisor and Auditor)
You may ask your questions in our Community or email them to support@muslimxchange.com
Responses