Good morning investors,
Novo Nordisk surges 7% on FDA approval of the world's first GLP-1 pill at $149 monthly, giving the Danish giant a crucial head start over Eli Lilly in the oral weight loss race. Google's $4.75 billion acquisition of Intersect energy infrastructure reveals the AI race is entering a new battle, where firms look to secure electricity before competitors lock up limited power capacity. Copper hits record $12,000 per ton as tariff driven trade dislocations create the biggest rally since 2009 despite Chinese demand weakness. The S&P 500 sits just 0.3% from all time highs as Santa Claus rally momentum builds into Wednesday's half-day session.
Opening Bell: Records in Sight
Futures essentially flat with Dow ($DIA ( ▼ 0.53% )) futures down 8 points while S&P ($SPY ( ▼ 0.26% )) and Nasdaq ($QQQ ( ▼ 0.38% )) futures hover unchanged. Novo Nordisk ($NVO ( ▼ 1.58% )) jumps in premarket on GLP-1 pill approval breakthrough. Materials and financials led Monday's gains with Newmont and Freeport-McMoRan up 3% as gold hits $4,443 and silver doubles for 2025.
Markets close at 1 PM ET Wednesday for Christmas Eve and remain closed Thursday. Light volume creates opportunity for exaggerated moves as positioning adjusts into year end.
Novo's Game-Changing Pill
FDA approval of Novo's oral GLP-1 represents massive competitive advantage over Eli Lilly's injectable only offerings. The 1.5mg starting dose at $149 monthly through pharmacies, select telehealth, and Trump's direct to consumer TrumpRx platform democratizes access beyond injection averse patients.
The approval caps Novo's turbulent year including board drama, supply shortages, and execution criticism. Yet securing first-mover advantage in oral GLP-1s potentially worth hundreds of billions validates the Danish giant's R&D superiority. Lilly's expected pill approval can't come soon enough as Novo captures market share.
Google's Power Play
My analysis yesterday highlighted why Google's ($GOOGL ( ▼ 0.16% )) Intersect acquisition matters more than headline suggests. The $4.75 billion purchase secures 10.8 gigawatts of power capacity by 2028, over 20x Hoover Dam's output. This isn't about data centers, it's about electricity to run them.
OpenAI's $1.4 trillion infrastructure commitments forced Google's hand. You can build superior AI models, but without power they're useless. The company that controls reliable, scalable electricity wins the AI race. Google just made its most important strategic move yet while competitors scramble for remaining capacity.
Warner Bros Tender Drama
Paramount's Larry Ellison personally guaranteeing $40.4 billion in equity funding addresses WBD board's financing concerns about the $30 cash offer versus Netflix's $27.75 partial equity bid. Shareholders face game theory dilemma: tender to Paramount hoping for bidding war, or stick with Netflix believing Discovery Global spinoff holds hidden value.
The January 21 tender deadline (extendable to June annual meeting) creates months of uncertainty. Paramount CEO David Ellison values Discovery Global at just $1/share while mystery "Company C" bid $25 billion for it. This valuation gap determines whether shareholders see more value in Paramount's clean cash or Netflix plus spinoff equity.
Copper's Tariff Rally
Copper hitting $12,000/ton despite Chinese demand deterioration perfectly captures tariff trade distortions. US imports surge as manufacturers front run potential duties, creating artificial scarcity elsewhere. The 33% yearly gain, best since 2009, reflects trade disruption rather than fundamental demand.
This disconnect between price and underlying usage warns about market inefficiencies when politics override economics. Investors viewing copper as global growth barometer miss that current rally stems from hoarding, not consumption.
Q3 GDP and Confidence
Today's belated Q3 GDP provides shutdown delayed economic snapshot before federal stoppage distorted data collection. More importantly, December consumer confidence from Conference Board tests whether K-shaped recovery persists with affluent households carrying spending while lower-income struggle.
These final data points before holidays matter less for immediate market impact than confirming narratives heading into 2026. Strong confidence supports Santa rally continuation; weakness questions sustainability.
Final Thought - Holiday Edition
Markets demonstrate remarkable resilience approaching year end with the S&P within striking distance of records despite legitimate concerns about valuations, AI sustainability, and economic divergence. The rotation beneath calm surfaces, tech to value, growth to cyclicals, suggests healthy consolidation rather than topping.
The Santa Claus rally setup remains compelling with historical patterns strongly favorable. Since 1950, the final five trading days plus first two of new year averaged 1.3% gains with 75% win rate. Light holiday volume favors upside surprises as minimal selling pressure enables markup.
Financials leading while JPMorgan outperforms tech names shows fundamental strength beyond speculation. We're seeing commercial viability, not just dreams.
I do believe we see tech leadership in 2026 as the AI trade advances and I do see numerous opportunities in the space. I expect small cap momentum to continue also.
The optimism phase continues but prepare for increased volatility ahead. My 6,800 year end target has been exceeded but 7,000 remains achievable as December dynamics overwhelm concerns.
Market Pulse will return with full analysis after the holidays. Wishing all readers a Merry Christmas!
As always, feel free to reach out with questions about year-end positioning.
Best regards,
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.