PickAlpha Morning Report | 2025-12-30 — 6 material moves and analysis

• PLA launches record drills encircling Taiwan — $TSM, $EWT • US pending home sales rise 3 3 m m — $XHB, $ITB • Dallas Fed Texas manufacturing slips to 10 9 — $XLI, $IWM • Etc..

Scope: filtered material news only (passed significance tests).
Method: in-house deep network reasoning + causal graphs → asset mapping → actions.
Authorship: compiled from model outputs; edited & written by senior buy-side researchers.

PickAlpha - Macro Events:

2025-12-30 Events Analysis -

U.S. November Pending Home Sales jump 3.3% MoM and 2.6% YoY, signaling stronger housing demand | $XHB, $ITB, $SPY

Immediacy: Last Day · Impact: bullish · Category: Macro/Rates/FX · Materiality: A (★★★, 90)

The National Association of REALTORS reported that its Pending Home Sales Index rose about 3.3% month over month in November, marking a fourth straight gain and the strongest seasonally adjusted reading in several years. Activity improved across all major regions, with the West showing the sharpest rebound. NAR linked the upswing to better affordability as mortgage rates eased, wage growth outpaced home prices, and listings ticked higher. Survey responses also pointed to firmer buyer and seller traffic expectations over the coming quarter, reinforcing the improving demand trend.

Action — CAUTIOUSLY OBSERVE: Improving demand supports XHB and ITB, but low index level caps conviction.

For housing‑linked equities and credit, the pickup in contract signings suggests a healthier pipeline of existing‑home closings into early next year, improving volume visibility for homebuilders, brokers, mortgage originators, and housing‑sensitive lenders. Better throughput can support pricing power and operating leverage, which should favor XHB and ITB relative to broader benchmarks such as SPY. However, the index remains well below its prior peak, so the move mainly reduces downside risk rather than signaling a new cycle. The next NAR pending home sales release is the key trigger for validating this trend.

Source: National Association of REALTORS® • Time: 2025-12-29T10:00:00-05:00

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Dallas Fed’s Texas Manufacturing Outlook Survey shows December contraction; general business activity index falls to -10.9 | $XLI, $IWM, $SPY

Immediacy: Last Day · Impact: mixed · Category: Macro/Rates/FX · Materiality: B (★★, 82)

The latest Dallas Fed Texas Manufacturing Outlook Survey reported that state factory activity slipped back into contraction in December, reversing November’s strength. The production index moved below zero, indicating a slight decline in output, while new orders and shipments weakened further, signaling softer demand. The headline general business activity index fell to -10.9, remaining in negative territory and marking its lowest level in several months. Company outlook measures deteriorated as well, and labor indicators such as employment and hours worked softened, even as wage and input cost pressures stayed elevated.

Action — CAUTIOUSLY OBSERVE: Mixed near-term contraction and positive expectations argue against immediate cyclical repositioning.

For broad U.S. cyclicals and small caps tracked by XLI, IWM and SPY, the survey points to softer near‑term earnings momentum as weaker production, orders and shipments filter through revenue and margin expectations. Cooling employment and hours suggest downside risk to labor demand, yet resilient wage and input costs keep pressure on profitability, a mix that can cap multiple expansion even if growth slows only modestly. However, positive forward‑looking indices indicate manufacturers still anticipate improvement, which could anchor sentiment if confirmed by subsequent data. The key trigger is the next Texas manufacturing survey, which will help clarify whether December marked a brief air pocket or the start of a broader slowdown.

Source: Federal Reserve Bank of Dallas • Time: 2025-12-29T11:30:00-05:00

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China launches largest‑ever live‑fire drills encircling Taiwan, disrupting air and sea traffic | $TSM, $EWT, $SOXX, $LMT, $SPY

Immediacy: Overnight · Impact: bearish · Category: EventRisk · Materiality: B (★★, 88)

China’s PLA Eastern Theatre Command has launched “Justice Mission 2025,” its largest live‑fire drills encircling Taiwan, deploying warships, fighter jets, artillery and ground forces to rehearse strikes and blockade scenarios around key ports including Keelung and Kaohsiung. The exercises run from Monday into Tuesday Beijing time and span seven declared maritime zones plus an additional unannounced area, bringing activity closer to Taiwan than previous rounds. Taiwan’s defence ministry reports extensive air and naval activity and has conducted rapid‑response drills, while its transport ministry expects more than 100,000 international passengers to face route changes and cancellations due to disrupted air and sea corridors, including links to Japan.

Action — CAUTIOUSLY OBSERVE: Largest PLA drills raise event risk; monitor semis, SPY and defence rotation.

Extended, closer‑in PLA drills elevate perceived geopolitical and supply‑chain risk, pressuring valuation multiples for Taiwan‑linked semiconductor exposure such as TSM, EWT and SOXX, and encouraging de‑risking in broad risk proxies like SPY as investors reassess continuity of production and logistics. At the same time, higher event‑risk premia can support defence names like LMT on expectations of structurally firmer demand, even if near‑term cash flows are unchanged. Our bias is that downside risk dominates if Beijing prolongs or repeats these exercises, but we would use confirmation that drills conclude within the stated window as the key trigger before reconsidering incremental risk exposure.

Source: Reuters • Time: 2025-12-30T03:19:00-05:00

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Artist & Craftsman Supply, a multi‑state art retailer, voluntarily files for Chapter 11 to restructure liabilities | $XRT, $RTH, $SPG

Immediacy: Last Day · Impact: mixed · Category: CorpActions · Materiality: D (☆, 60)

Artist & Craftsman Supply, a Maine-based art materials retailer, has voluntarily initiated a Chapter eleven bankruptcy process effective December 21, 2025, according to social-media disclosures later echoed in a LiveNOW from FOX report. The privately held chain, which operates brick-and-mortar stores across multiple U.S. states, cited higher leasing costs and softer discretionary spending as primary causes of distress. Management stated that the company plans to continue operating under court protection while using the process to restructure liabilities and negotiate real-estate terms, positioning the business for long-term viability rather than liquidation.

Action — CAUTIOUSLY OBSERVE: Private filing, sector read-through unclear; wait for further retail distress signals.

For listed retail and REIT exposures such as XRT, RTH, and SPG, the case underscores how rising occupancy costs and fragile discretionary demand can compress margins at specialty chains and strain secondary shopping centers. If landlords broadly resist rent reductions, weaker tenants could follow similar paths, increasing vacancy risk and pressuring rental growth expectations, which would argue for multiple compression. Conversely, if this filing proves idiosyncratic and space is re-leased quickly to stronger concepts, earnings and traffic assumptions may hold. We would reassess positioning after the next earnings update reveals management commentary on tenant health.

Source: LiveNOW from FOX / Artist & Craftsman Supply • Time: 2025-12-29T14:17:00-05:00

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PickAlpha - Company News:

2025-12-30 News Analysis:

Credicorp’s Banco de Crédito del Perú to acquire 100% of Helm Bank USA for $180 million in cash | $BAP, $KRE, $XLF

Immediacy: Last Day · Impact: mixed · Category: CorpActions · Materiality: C (★, 79)

Credicorp Ltd. said its subsidiary Banco de Crédito del Perú has signed a definitive agreement to acquire all outstanding shares of Helm Bank USA, a Florida state‑chartered community bank, in an all‑cash transaction valued at USD 180 million, subject to customary price adjustments at closing. Helm Bank USA operates branches in Miami and Orlando and maintains a representative presence in Colombia. The parties framed the deal as a way to strengthen Credicorp’s cross‑border banking capabilities while preserving Helm’s community‑focused franchise.

Action — CAUTIOUSLY OBSERVE: Small accretive deal; await regulatory clarity and integration commentary before repositioning.

For BAP, the acquisition modestly reallocates capital into a targeted U.S. platform that can deepen relationships with Latin American clients who bank or invest across borders, add cross‑border lending and fee income, and slightly diversify earnings toward dollar assets, supporting the capital deployment narrative if returns prove attractive. However, prolonged or onerous U.S. and Peruvian regulatory reviews, higher compliance costs, or weaker credit performance at Helm could dilute deal economics and sharpen investor focus on integration risk, tempering multiple expansion for BAP and sentiment toward regional‑bank proxies such as KRE and XLF. The key trigger is final regulatory approval timing and disclosed integration plans.

Source: Credicorp / GlobeNewswire • Time: 2025-12-29T16:54:00-05:00

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ON24 to be acquired by Cvent in ~$400m all-cash deal at $8.10 per share, 62% premium | $ONTF

Immediacy: Overnight · Impact: bullish · Category: CorpActions · Materiality: B (★★, 88)

ON24 agreed to be acquired by privately held event technology provider Cvent in an all cash transaction under a definitive merger agreement. ON24 shareholders are set to receive cash consideration of 8.10 dollars per share, representing a substantial premium to the company’s undisturbed trading levels. The boards of both companies have unanimously approved the deal, which remains subject to ON24 shareholder approval, regulatory clearances, and other customary closing conditions. Following completion, ON24 will become a privately held company and its stock will be delisted, removing public market liquidity but providing an immediate cash exit for current investors.

Action — TAKE PROFITS: Upside capped by cash offer while approval and timing risks persist.

With a definitive all cash offer in place, ONTF now trades as a merger arbitrage situation rather than a fundamental growth story. The offer price effectively caps upside, while the key variable is the probability and timing of closing versus the downside if the transaction fails and the stock gravitates back toward pre deal levels. Limited financing concerns and strategic industrial logic point to a high likelihood of completion, but residual shareholder and regulatory risks remain. The main tactical trigger is the ON24 shareholder meeting to vote on the merger agreement.

Source: MarketScreener / Investing.com / Businesswire • Time: 2025-12-30T00:00:00-05:00

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Informational only; not investment advice. Sources deemed reliable.