Stock Market Update

The S&P 500 futures are up 21 points and are trading 0.4% above fair value, the Nasdaq 100 futures are up 178 points and are trading 0.8% above fair value, and the Dow Jones Industrial Average futures are up 50 points and are trading 0.1% above fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are higher. A positive response to earnings from Broadcom (AVGO), which is nearly 20% higher in premarket action, has boosted other semiconductor-related names and the broader equity market.

Treasury yields are higher. The 10-yr yield is up three basis points to 4.35% and the 2-yr yield is up two basis points to 4.21%. 

Today's economic lineup features November Import Prices (prior 0.3%), Import Prices ex-oil (prior 0.2%), Export Prices (prior 0.8%), and Export Prices ex-agriculture (prior 0.6%) at 8:30 ET.

In corporate news:

• Broadcom (AVGO 212.69, +32.03, +17.7%): beats by $0.03, reports revs in-line; guides Q1 revs above consensus; increases dividend
• Costco (COST 989.67, +1.28, +0.1%): beats by $0.03, adjusted comparable sales of +7.1%
• RH (RH 443.79, +62.41, +16.4%): misses by $0.17, reports revs in-line; guides Q4 revs above consensus
• Boeing (BA 168.84, +1.09, +0.7%): Air Force One project is still behind schedule, according to WSJ; Qatar Airways wants to remove Boeing (BA) 737-10 model from its order book, according to Bloomberg
• Salesforce (CRM 364.38, +6.35, +1.8%): upgraded to Overweight from Sector Weight at KeyBanc Capital Markets

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a mostly lower note. Japan's Nikkei: -1.0% (+1.0% for the week), Hong Kong's Hang Seng: -2.1% (+0.5% for the week), China's Shanghai Composite: -2.0% (-0.4% for the week), India's Sensex: +1.0% (+0.5% for the week), South Korea's Kospi: +0.5% (+2.7% for the week), Australia's ASX All Ordinaries: -0.4% (-1.6% for the week).
  • In economic data:
    • China's November New Loans CNY580.0 bln (expected CNY950.0 bln; last CNY500.0 bln). November Outstanding Loan Growth 7.7% yr/yr (expected 7.9%; last 8.0%) and total social financing CNY2.34 trln (expected CNY2.80 trln; last CNY1.40 trln)
    • Japan's Q4 Tankan All Big Industry Capex 11.3% (expected 9.6%; last 10.6%). Q4 Tankan Large Manufacturers Index 14 (expected 13; last 13) and Small Manufacturers Index 0 (expected -2; last 0). Q4 Tankan Large Non-Manufacturers Index 33, as expected (last 34) and Small Non-Manufacturers Index 16 (expected 11; last 14). October Industrial Production 2.8% m/m (expected 3.0%; last 1.6%) and Capacity Utilization 2.6% m/m (last 4.4%)
    • South Korea's November Import Price Index 3.0% yr/yr (last -2.5%) and Export Price Index 7.0% yr/yr (last 2.0%
    • New Zealand's November Business PMI 45.5 (last 45.8). October External Migration & Visitors 6.3% yr/yr (last 0.9%)
  • In news:
    • Markets in China and Hong Kong showed relative weakness amid disappointment stemming from the lack of a specific stimulus announcement at the conclusion of the Central Economic Work Conference. Instead, officials reiterated the plan to raise deficits and continue lowering the reserve requirement ratio.
    • As a result, China's 10-yr yield hit a fresh record low at 1.738%. Japan's Tankan Survey showed an improvement in sentiment among large manufacturers and small non-manufacturers.
    • South Korea's opposition party is attempting to impeach President Yoon for the second time.
• Major European indices are looking for a higher finish to the week. STOXX Europe 600: UNCH (-0.4% week-to-date), Germany's DAX: +0.3% (+0.6% week-to-date), U.K.'s FTSE 100: +0.1% (+0.2% week-to-date), France's CAC 40: +0.3% (+0.2% week-to-date), Italy's FTSE MIB: +0.3% (+0.6% week-to-date), Spain's IBEX 35: +0.3% (-2.2% week-to-date).
  • In economic data:
    • Eurozone's October Industrial Production 0.0% m/m, as expected (last -1.5%); -1.2% yr/yr (expected -1.9%; last -2.2%)
    • Germany's October trade surplus EUR13.4 bln (expected surplus of EUR15.7 bln; last surplus of EUR17.0 bln). October Imports -0.1% m/m (expected -0.6%; last 2.1%) and Exports -2.8% m/m (expected -2.0%; last -1.7%). November WPI 0.0% m/m (expected 0.2%; last 0.4%); -0.6% yr/yr (last -0.8%)
    • U.K.'s October GDP -0.1% m/m (expected 0.1%; last -0.1%); 1.3% yr/yr (expected 1.6%; last 1.0%). October Construction Output -0.4% m/m (expected 0.2%; last 0.1%); -0.7% yr/yr (expected 0.0%; last -0.4%). October Industrial Production -0.6% m/m (expected 0.3%; last -0.5%); -0.7% yr/yr (expected 0.2%; last -1.8%). October Manufacturing Production -0.6% m/m (expected 0.2%; last -1.0%); 0.0% yr/yr (expected 0.9%; last -0.7%). October trade deficit GBP19.0 bln (expected deficit of GBP16.1 bln; last deficit of GBP16.3 bln)
    • France's November CPI -0.1% m/m (expected 0.1%; last 0.3%); 1.3% yr/yr, as expected (last 1.2%)
    • Spain's November CPI 0.2% m/m, as expected (last 0.6%); 2.4% yr/yr, as expected (last 1.8%). November Core CPI 2.4% yr/yr, as expected (last 2.5%)
  • In news:
    • French President Macron named Francois Bayrou as the next prime minister.
    • The U.K. reported weak growth figures for October but the Bank of England is not expected to lower its bank rate next week.
    • European Central Bank policymakers spoke in favor of additional rate cuts.
    • Bundesbank lowered Germany's growth forecast for 2025 to 0.2% from 1.1% while the outlook for 2026 was trimmed to 0.8% from 1.4%. The CPI forecast for 2025 was lowered to 2.4% from 2.7% while the outlook for 2026 was reduced to 2.1% from 2.2%.
    • German Chancellor Scholz will face a confidence vote on Monday.