The medical technology sector is poised to outperform the broader market in 2024, according to investment bank Baird. After a period of underperformance, the sector received a boost from an investment conference in San Francisco, with the iShares US Medical Devices ETF (IHI) climbing 2.8% over the past week. This outpaced the S&P 500's 1.6% gain. Baird's top medtech picks include Alcon (ALC, Financial), Stryker (SYK, Financial), The Cooper Companies (COO, Financial), Boston Scientific (BSX, Financial), and now Dexcom (DXCM, Financial), with Intuitive Surgical (ISRG, Financial) and Inspire Medical Systems (INSP, Financial) also gaining attention. The firm noted strong Q4 patient volumes, especially in hip/knee replacements, diabetes devices, contact lenses, ophthalmology products, cardiovascular and neuromodulator devices, and surgical robotics. Companies that preannounced earnings also surpassed Q4 revenue estimates, indicating a robust sector performance.
In geopolitical news, a U.S.-owned cargo ship was hit by a missile off the coast of Yemen, causing a fire but no injuries. This incident, reported southeast of Aden, follows retaliatory actions by U.S. and U.K. forces against Houthi rebels in Yemen, who have threatened further attacks on shipping. This escalation of tensions in the Middle East could have broader implications for regional stability and international trade.
The stock market will observe a break for Martin Luther King, Jr. Day, with the New York Stock Exchange and Nasdaq closed. However, stock futures, including those linked to the Dow (INDU), S&P 500 (SPX), and Nasdaq 100 (NDX), showed marginal overnight gains. Metals, energy futures, and cryptocurrencies like Bitcoin (BTC-USD) will continue to trade, with Bitcoin last seen at $42,634. The market is also digesting the SEC's recent approval of spot Bitcoin ETFs.
Retail giants Costco Wholesale Corporation (COST, Financial) and Sam's Club (WMT, Financial) are witnessing growing consumer traffic in China, with Costco's new store in Shenzhen drawing large crowds and strong sales. The success of the membership model in China is resetting growth expectations for these U.S. companies in the region. Popular items at the new Costco store included Disney's (DIS, Financial) Lotso bear, among other products.
A busy earnings week lies ahead despite the holiday-shortened schedule. Financial sector leaders Morgan Stanley (MS, Financial) and Goldman Sachs (GS, Financial) are set to release their results, along with regional banks. Industrial and energy firms like Alcoa (AA, Financial), PPG Industries (PPG, Financial), Kinder Morgan (KMI, Financial), and Schlumberger (SLB, Financial), as well as semiconductor giant Taiwan Semiconductor (TSM, Financial), will also announce their quarterly figures.
The International Monetary Fund (IMF) has highlighted the potential impact of AI on global employment, with 40% of jobs at risk. Advanced economies could see 60% of jobs affected, while emerging markets and low-income countries face exposure of 40% and 26%, respectively. The IMF has developed an AI Preparedness Index to assist countries in adapting to AI advancements.
Despite U.S. export bans, Chinese military entities and universities have acquired Nvidia (NVDA, Financial) semiconductors, including the A100, H100, A800, and H800 chips. These purchases raise concerns about the use of these chips for AI and potential military applications.
Apple (AAPL, Financial) is offering discounts on iPhones in China, a rare move for the tech giant, in anticipation of the Lunar New Year. The promotion includes savings on various Apple products, with up to 500 yuan off on iPhones, including the new iPhone 15 series.
Novo Nordisk (NVO, Financial) has resumed U.S. shipments of its 1.7 mg dose of the weight loss drug Wegovy after a brief stock-out in December 2023. The larger 2.4 mg dose remains available, and the company continues to navigate supply and demand dynamics for its popular weight loss medication.
Real estate investment trusts (REITs) saw a modest performance, with the FTSE Nareit All Equity REITs index and the Dow Jones Equity All REIT Total Return Index both showing gains. This comes as the broader market benefits from a decrease in producer price inflation and a positive start to the Q4 earnings season.
Lockheed Martin's (LMT, Financial) Rotary and Mission Systems unit received a significant contract modification, boosting the total contract value to $946.33 million. This contract is part of the Aegis System Equipped Vessel program and extends the performance period through November 2024.
In global market movements, Japan, China, and India saw gains, while European markets experienced slight declines. Investors are keeping a close eye on inflation and government funding developments in the U.S., as well as data releases and policy decisions in Europe and Asia-Pacific regions.
Alliant Energy (LNT, Financial) announced a 6.1% increase in its quarterly dividend, signaling confidence in its financial stability and commitment to shareholder returns.
