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Red Sea Conflict Spurs Oil Price Rally Amid Supply Disruption Concerns

In Asian trade on Tuesday, oil prices made a slight climb after bouncing back strongly from nearly six-month lows. The market sentiment was influenced by concerns over the ongoing conflict in the Red Sea and its potential impact on supplies.

Recent missile and drone strikes on multiple vessels in the area, attributed to the Yemeni Houthi group, prompted various shipping companies to announce their decision to steer clear of the region. Many are opting for a significantly longer route around the Cape of Good Hope, avoiding the Suez Canal. Notably, major players like BP PLC and Frontline Ltd declared their intentions to bypass the waterway, with several other oil firms expressing similar worries.

This shift is expected to disrupt the flow of crude oil to Europe and Asia, given the Suez Canal’s crucial role as a key shipping route between these continents. As a result, oil shipments originating from the Middle East are anticipated to take extended routes to Europe and across the Atlantic.

Monday witnessed a significant surge in oil prices following the attacks in the Red Sea, continuing the recent upward trend from lows experienced in late June. On Tuesday, prices exhibited modest gains with Brent oil futures expiring in February rising by 0.2% to reach $78.11 a barrel, while West Texas Intermediate crude futures climbed 0.1% to hit $72.93 a barrel by 20:21 ET (01:21 GMT).

Market Surge Continues: S&P 500 Inches Closer to Record Highs, Tech Stocks Eye Major Milestones

​Last week, the S&P 500 surged by 2.5%, marking an impressive streak of seven consecutive weeks of gains. It’s on the cusp of hitting fresh record highs, trading above 4700 for the first time since January 2022, showcasing a significant resurgence. The index has climbed approximately 15% from its October lows, underlining a robust upward trajectory.

Meanwhile, the tech-centric Nasdaq Composite Index rose by 2.9%, setting its sights on breaching the 15,000 mark after nearly a two-year stretch. Similarly, the Dow Jones Industrial Average also experienced a 2.9% uptick, propelling it to a new record high.

The market dynamics continue to grapple with the Federal Reserve’s dovish shift and the ongoing rally in both stocks and bonds. The recent surge in demand for bonds triggered a substantial decline in yields, fueling the rally in risk assets.

However, analysts caution against premature optimism, emphasizing that the aggressive market pricing might be overlooking potential signs of a slowing economy. There are indicators suggesting a potential deceleration in growth, prompting vigilance among investors.

In the upcoming week, the Core PCE Price Index slated for release on Friday holds significant importance as it serves as a barometer for inflation, a pivotal consideration influencing the Federal Reserve’s recent policy stance. Should inflation exhibit a larger-than-anticipated decline, it could reinforce expectations of rate cuts, potentially favoring stock markets.

Additionally, attention will be on updates regarding the Philly Fed and Durable Goods, as robust readings could reinforce the narrative of a gentle economic slowdown, thereby supporting current market valuations. Weekly jobless claims on Thursday and Continuing Claims will be closely monitored for insights into the labor market dynamics.

In the realm of corporate earnings, FedEx (NYSE: FDX) will report its financials after Tuesday’s market close, followed by Micron (NASDAQ: MU) on Wednesday. Notably, Nike (NYSE: NKE) is scheduled to report a day later, marking another significant event for investors.

​Apple Ceases Sales of Flagship Apple Watch Models in the US Following ITC Patent Dispute

Following a ruling by the International Trade Commission (ITC) in a patent dispute with medical tech firm Masimo, Apple (NASDAQ:AAPL) is halting sales of its top-tier Apple Watch models in the United States. As reported by 9to5Mac, the Apple Watch Series 9 and Apple Watch Ultra 2 will no longer be purchasable from Apple’s US website after 3 pm ET on Thursday, December 21. In-store inventory will cease availability from Apple retail locations after December 24.

However, the lower-end Apple Watch SE, lacking a blood oxygen sensor, remains unaffected and will continue to be available for purchase.

The ITC supported a judge’s prior decision in October, forwarding the case for review by the Biden administration. The current process allows President Biden the option to veto the ruling, although this has not yet transpired, and the ruling expires on December 25.

Apple’s announcement appears to be a proactive move to comply with the ITC’s decision. It’s essential to note that the ITC’s order solely restricts Apple from selling the impacted models, meaning these devices will, for now, still be accessible for purchase through other retailers. Nonetheless, the order prohibits all imports of Apple Watch Series 9 and Ultra 2 models to the US post-December 25. The existing Apple Watch models equipped with blood oxygen monitoring capabilities will continue to function without any alterations.

Jury Orders Monsanto to Pay $857 Million in PCB Exposure Case at Washington School

A Washington state jury ruled on Monday that Bayer’s Monsanto must pay $857 million to seven former students and parent volunteers from a school near Seattle. They claimed that exposure to polychlorinated biphenyls (PCBs) from the company’s chemicals, which leaked from light fixtures, caused them harm.

The jury in Seattle found Monsanto accountable for selling unsafe PCBs to the Sky Valley Education Center in Monroe, Washington, lacking adequate warnings. The awarded amount comprises $73 million in compensatory damages and $784 million in punitive damages.

The plaintiffs, including former students and parents from 7 to 18 years ago, attributed neurological and endocrine health issues to PCB exposure at the school.

Monsanto plans to challenge the verdict, denoting it as “constitutionally excessive,” aiming for an overturn or reduction of the decision. The company faces previous verdicts totaling $870 million related to alleged PCB exposure at the Sky Valley center in other cases, all under appeal.

Investing is like assembling a financial jigsaw puzzle, except the pieces keep changing shape and color just when you think you’ve got the corner figured out. It’s a bit like trying to predict the weather in a suit made of question marks – one moment sunny, the next raining cats and dividends. But hey, in this high-stakes game of Monopoly-meets-Risk, you’ve got a front-row seat to the circus of capitalism. So, grab your popcorn and spreadsheet, because in the land of investments, even the rollercoaster has a return on investment!