📈 Visa in Legal Crosshairs

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Good Morning & happy Wednesday??

China’s massive new stimulus package shook up global markets yesterday, meanwhile Novo Nordisk faced U.S. criticism over high drug prices, and Visa's stock dropped amid looming antitrust lawsuits.

Grab your chai latte and let's get into it! ☕️👇️

Markets

The S&P 500 and Dow hit record highs on Tuesday, despite weak consumer confidence data. This surge was driven by China's sweeping stimulus package, which boosted mining stocks. China’s policy moves, including direct support for its equity market and future interest rate cuts, triggered sharp gains in international stocks.

This momentum spilled over into U.S. markets, with China-sensitive sectors like metals and mining leading the charge.

⛏️ Middle East tensions power gold to record high
Gold surged 1% to a record high on Tuesday, driven by escalating Middle East tensions and hopes for further U.S. interest rate cuts. Up 28% in 2024, its safe-haven appeal has soared amid rising fears of a broader conflict.

💳️ Visa Plunges 5% as DOJ files lawsuit
Visa shares plunged 5.49% after reports surfaced that the DOJ is preparing an antitrust lawsuit against the company. The lawsuit claims Visa blocked competitors by punishing customers for using alternative payment processors.

📈 Liberty Broadband Stock Soars 25%
Liberty Broadband shares soared 25% on Tuesday after the company submitted a counterproposal for a merger with Charter Communications.

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BUSINESS

Novo Nordisk Under Fire

Novo Nordisk is catching heat from U.S. politicians over the sky-high prices of its popular weight-loss and diabetes drugs, Wegovy and Ozempic.

At a congressional hearing on Tuesday, CEO Lars Fruergaard Jørgensen defended the company, saying the prices are tied to "structural issues" in the U.S. healthcare system. However, he’s open to negotiating those prices, as long as lawmakers ensure that insurance will cover the drugs.

The push for lower prices is spearheaded by Senator Bernie Sanders, who pointed out that while Americans are paying close to $1,350 a month for Wegovy, it's available in the UK for just $92. With Novo Nordisk earning a huge chunk of its profits in the U.S.

Senator Sanders didn’t mince words, stating, "Novo has created game-changing drugs that could save the lives of tens of thousands of Americans every year if made affordable. But if not, Americans will needlessly die and suffer."

Despite the criticism, Novo Nordisk remains one of the world’s biggest companies, valued at $555 billion thanks to the massive success of its appetite-suppressing GLP-1 drugs.

CHINA

China’s Stimulus Package

China just launched its biggest stimulus package since the pandemic, aiming to lift its sluggish economy out of a deflationary slump. The plan includes big funding boosts and interest rate cuts, sparking a ripple effect across global markets.

European mining stocks soared 4.6%, and Australian mining stocks jumped 2.8% on the news. Even luxury brands like Swatch, Burberry, and Richemont, which rely on China's middle class, saw their shares rise by 2% to 5%.

But not everyone’s convinced. Despite the massive effort, weak credit demand from businesses and consumers raises doubts about its impact.

Julian Evans-Pritchard of Capital Economics said, “This is the most significant move by the People’s Bank of China since the pandemic, but it may not be enough.” He hinted that more fiscal stimulus could be needed to hit China’s 5% growth target for the year.

For now, it’s a wait-and-see game on whether this package can really turn things around for the worlds second largest economy.

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