Stock Market Update

The S&P 500 futures are up 12 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 19 points and are trading 0.1% above fair value, and the Dow Jones Industrial Average futures are up 77 points and are trading 0.2% above fair value.

Stock futures indicate a higher open following seven straight winning weeks for the major indices. 

Treasury yields are moving lower, acting as support for equities. The 2-yr note yield is down four basis points to 4.42% and the 10-yr note yield is down two basis points to 3.91%.

Chicago President Goolsbee (not a 2024 voter) said it's too early to declare victory against inflation, according to Bloomberg. Several ECB officials do not see a pivot in policy before March, making a rate cut before June difficult, according to Reuters.

Economic data today is limited to the December NAHB Housing Market Index (prior 34) at 10:00 a.m. ET.

In corporate news:

• U.S. Steel (X 50.57, +11.24, +28.6%): Nippon Steel Corporation (NPSCY) to acquire U. S. Steel for $55.00/share
• Illumina (ILMN 134.50, +7.40, +5.8%): announced that the company will divest GRAIL
• IBM (IBM 162.18, -0.05, -0.03%): to acquire StreamSets and webMethods platforms from Software AG
• V.F. Corp (VFC 18.63, -1.59, -8.0%): detected unauthorized occurrences on a portion of its information technology
• Citigroup (C 50.04, +0.21, +0.4%): reports November card metrics
• PGT Inc. (PGTI 39.25, +3.16, +8.8%): Masonite (DOOR) announced a definitive agreement under which Masonite will acquire PGTI for a combination of cash and Masonite shares with a total transaction value of $3.0 bln; PGT Innovations shareholders will receive $41.00 per each PGT Innovations share they own, comprised of $33.50 in cash and $7.50 in common shares of Masonite

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mostly lower, trading cautiously in front of the Bank of Japan (BOJ) policy decision on Tuesday. Japan's Nikkei: -0.6%, Hong Kong's Hang Seng: -0.9%, China's Shanghai, Composite: -0.4%, India's Sensex: -0.2%, South Korea's Kospi: +0.1%, Australia's All Ordinaries: -0.2%.
  • In economic data: 
    • New Zealand's Q4 Westpac Consumer Sentiment 88.9 (last 80.2)
  • In news:
    • The BOJ is expected to leave its key policy rate unchanged, but participants are keenly interested to hear if the BOJ signals intention to shift away from negative interest rate policy in near future.
    • People in Japan, meanwhile, have not lost sight of the government's fundraising scandal.
    • A Kyodo News survey indicates support rating for Prime Minister Kishida's Cabinet has slumped to new low of just 22.3%.
    • China is reportedly increasing the number of state firms and government agencies restricting staff from bringing iPhones to work China, according to Bloomberg.
    • In other news, China is extending the end of FX trading from 11:30 p.m. to 3:00 a.m. next day, starting today, and the PBOC set the yuan reference rate at its strongest fix (7.0933) since June 5.
• Major European indices are mostly in a modest downward drift to begin the week on a relatively slow news day, although the UK's FTSE 100 is outperforming with the help of its energy components. STOXX Europe 600: -0.1%, Germany's DAX: -0.3%, UK's FTSE 100: +0.7%, France's CAC 40: -0.2%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: flat.
  • In economic data:
    • Germany's December Ifo Business Climate Index 86.4 (expected 87.8; last 87.2)
  • In news:
    • A Reuters report that several sources indicate ECB officials don't see a pivot in policy before March, making a rate cut before June difficult.
    • Separately, Germany's business climate survey for December printed a weaker-than-expected result and dip from November.
    • There is some chatter that revised Q3 GDP data for the UK will be revised into contraction territory when it is reported on Friday.