The biotech sector witnessed a significant surge in mergers and acquisitions (M&A) activity as 2023 came to a close, with several high-profile deals capturing the market's attention. AbbVie (ABBV, Financial) was at the forefront, acquiring ImmunoGen (IMGN, Financial) for a substantial $10 billion and Cerevel Therapeutics (CERE, Financial) for $8.7 billion. Bristol Myers (BMY, Financial) continued the trend by securing deals to purchase Karuna Therapeutics (KRTX, Financial) for $14 billion and RayzeBio (RYZB, Financial) for $4.1 billion. These transactions contributed to a record-breaking year in the biotech M&A space, surpassing the previous high set in 2020. The total value of deals soared by 71% from the previous year, bolstered by Pfizer's (PFE, Financial) massive $43 billion acquisition of Seagen. Analysts from Piper Sandler and Barclays noted that despite regulatory challenges, the sector's M&A activity flourished, setting a robust precedent for the year ahead.
The electric vehicle (EV) industry faced a pivotal shift as the new year began, with changes to the U.S. consumer tax credit system reducing the number of eligible EV models from 25 to just 13. The updated regulations, which aim to diminish reliance on Chinese suppliers for battery components, are expected to influence automakers' supply chains significantly. The Treasury Department, through spokeswoman Ashley Schapitl, emphasized ongoing collaboration with the auto industry to adapt to these changes and promote domestic job growth and investment. By 2025, the restrictions will further tighten to include suppliers of essential battery raw materials.
The Macau gaming industry celebrated a triumphant end to 2023, with gross gaming revenue (GGR) soaring by 334% year-over-year, reaching $183.1 billion patacas ($22.7 billion). December alone saw a 433% increase in GGR, exceeding expectations and signaling a robust recovery for the sector. High hotel occupancy rates and the implementation of new investment commitments by casino operators suggest a positive outlook for Macau's gaming and tourism industries.
The real estate sector, represented by the Real Estate Select Sector SPDR Fund ETF (XLRE), experienced an 8% rise in 2023, although it lagged behind the S&P 500's 27% increase. With anticipated rate cuts in 2024, the sector may see a rebound. Notable gainers in the sector included Diversified Healthcare Trust (DHC) and Opendoor Technologies (OPEN), while FLJ Group (FLJ) and Green Giant (GGE) were among the biggest losers.
NIO (NIO, Financial) reported a 13.9% year-over-year increase in vehicle deliveries for December 2023, with a total of 18,012 vehicles delivered. The fourth quarter saw 50,045 deliveries, marking a 25% increase from the previous year. NIO's annual deliveries reached 160,038, up 30.7% year-over-year, with cumulative deliveries totaling 449,594 as of the end of 2023. The company's new ET9 model is expected to begin deliveries in the first quarter of 2025.
Consumer discretionary stocks, tracked by the Consumer Discretionary Select Sector SPDR Fund ETF (XLY), outperformed the broader market with a 38% gain in 2023. The Automobiles & Components industry led the charge with a 76% increase, while Royal Caribbean Cruises (RCL, Financial) and Carnival Corporation (CCL, Financial) were among the top performers. Conversely, Etsy (ETSY, Financial) and V.F. Corporation (VFC, Financial) faced declines.
A.P. Moller-Maersk (AMKBY, Financial) temporarily suspended shipping in the Red Sea to assess security risks in the strategic trade corridor. This decision came in response to recent attacks on commercial vessels, highlighting the ongoing geopolitical tensions affecting global trade routes.
The financial sector, as measured by the Financial Select Sector SPDR Fund ETF (XLF, Financial), saw a 9.7% increase in 2023, recovering from a 12% decline the previous year. Despite lagging behind the S&P 500's overall performance, the sector showed resilience, particularly in the latter part of the year.
Consumer staples, represented by the Consumer Staples Select Sector SPDR Fund ETF (XLP, Financial), had a challenging year with a 3.06% decline in 2023. The sector's performance contrasted sharply with the S&P 500's 25.08% gain, with distribution & retail being the only subsector to show positive growth.
