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Briefing.com Summary:
*NVIDIA (NVDA) and Amazon.com (AMZN) are setting the pace for a positive-minded equity futures market.
*Fed Governor Waller (FOMC) has made it known that he prefers another rate cut in December.
*Kimberly-Clark (KMB) is acquiring Kenvue (KVUE) in a $48.7 billion cash-and-stock deal.
Let's begin where most days seem to begin: checking in on what NVIDIA (NVDA) is doing, because it has so much pull on trading sentiment and the market cap-weighted indices. Today, NVIDIA is up 2.5% in pre-market action. The added kicker is that Amazon.com (AMZN) is up 5.6% after OpenAI signed a $38 billion infrastructure deal with Amazon Web Services, according to CNBC.
Currently, the S&P 500 futures are up 22 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 226 points and are trading 0.9% below fair value, and the Dow Jones Industrial Average futures are down four points and are trading in line with below fair value.
NVIDIA's outperformance is grounded in an FT report that the U.S. will allow Microsoft (MSFT) to ship NVIDIA's chips to the UAE. This report has seemingly offset a proclamation by President Trump in a 60 Minutes interview that he won't allow NVIDIA to sell its advanced chips to China.
Separately, the U.S. released a communique on the details of the trade agreement it worked out with China. Both sides will either lower or suspend certain tariff measures; meanwhile, China is going to purchase at least 12 million metric tons of U.S. soybeans by year-end and at least 25 million metric tons in 2026, 2027, and 2028.
What remains to be seen is if both sides can actually stick to their purported agreements. Regardless, at this juncture the market likes the notion that the trade tension between the two countries has eased.
If Fed Governor Waller (FOMC voter) had his way, the Fed would ease monetary policy again at its December meeting with another rate cut. He may end up getting his way, yet Briefing.com in The Big Picture column published on Friday made it known that it would be absurd for the Fed to cut rates again at the December meeting.
Our view can be thought of as a minority view. According to the CME FedWatch Tool, the fed funds futures market places a 67.3% probability of another 25-basis-point cut in the target range for the fed funds rate to 3.50-3.75% in December.
That is an uplifting factor for the stock market in general, as is the lingering fear of missing out on further gains into year-end.
Kimberly-Clark (KMB), for one, will be missing out on gains today. It is down 14.8% after announcing a $48.7 billion cash-and-stock deal to acquire Kenvue (KVUE). Shareholders in the latter company will receive the equivalent of $21.01 per share, which is a 46% premium based on KMB's closing price on Friday.
This deal is commanding a lot of attention today, and so will the release of the October ISM Manufacturing Index (Briefing.com consensus: 49.4%; prior 49.1%) at 10:00 a.m. ET. First, because it is an actual economic data point to fill the void of government data during the shutdown, and secondly, because it carries weight as an important read for manufacturing activity at the national level.
