Arsenal quickly bounced back from their heavy 4-0 defeat at Liverpool with a victory over Newcastle United on Saturday.

The comfortable 2-0 win means the Gunners are level on points with fourth-placed West Ham United after a remarkable recovery from three defeats at the start of the season.

Bar the occasional setback, Mikel Arteta's project is showing signs of progress with each passing week, and he will hope to carry this momentum through the busy festive period and into the January window.

With £150million spent on signings over the summer, January could be a quiet month at the Emirates in terms of arrivals, but it could be a useful time to trim the squad and make plans for the future.

The latest updates from the rumour mill certainly suggest this is the direction Arteta and sporting director Edu could take and, without further ado, here are the latest Arsenal transfer headlines.

Gunners urged to "cash in" on Pepe

Nicolas Pepe has hardly played for Arsenal in recent weeks

The "writing's on the wall" for Nicolas Pepe and Arsenal would be wise to sell him while his market value remains high.

That is the verdict of former Gunners ace Kevin Campbell, who admits Hale End graduates Bukayo Saka and Emile Smith Rowe are putting in a "better shift" than the club's record £72million signing.

Pepe, 26, has been an unused substitute in Arsenal's last three Premier League games and he has only started five top-flight fixtures this season.

"When you’ve got two youngsters from the academy who are starting games and being more productive than you, putting in a better shift – then the writing’s on the wall for Pepe," Campbell told Football Insider .

"The price tag was obviously inflated, and he will only have two seasons left on his contract after this one. If he doesn’t secure a first-team place, then I can see Arsenal cashing in.

"You don’t know what you’re going to get from Pepe in terms of goals, assists, and productivity. That’s why they will probably choose to move him on."

Lacazette tipped for free transfer exit

Alexandre Lacazette is out of contract at the end of the season (

Image:

Getty Images)

Another pundit has also had his say on the situation at Arsenal.

Former England defender Danny Mills insists the Gunners should let Alexandre Lacazette leave at the end of the season rather than open negotiations over a new contract.

The striker, 30, has only scored one Premier League goal this season and he appears to be edging closer to an Emirates exit.

Mills believes the club should not try to prevent this, telling Football Insider : "They’re going to need some kind of replacement if they are to let him go.

"But is he doing enough at the moment to earn a new deal on big money? I don’t see it if I’m honest. It would be big to let him go, but they should."

First bid made for wonderkid

Arsenal have submitted a first offer for Ianis Stoica, according to reports in Romania

Arsenal have submitted an offer for Romanian wonderkid Ianis Stoica worth €7.5million (£6.4m), according to FCSB owner Gigi Becali.

Stoica, 18, has six goals and two assists for FCSB - who play in Romania's top flight - this season to grab the attention of Europe's heavyweights.

Becali told Romanian outlet AS he has received an offer, but he would like €10million (£8.5m) for the highly-rated teenager.

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