Stock Market Update

The S&P 500 futures are down 20 points and are trading 0.4% below fair value, the Nasdaq 100 futures are down 55 points and are trading 0.3% below fair value, and the Dow Jones Industrial Average futures are down 180 points and are trading 0.4% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are lower. Pre-open losses in the mega cap space have contributed to the negative bias. Rising market rates have also limited early buying. The 10-yr yield is at 4.44% and the 2-yr yield is at 4.29%.

The vibe in the market may shift following the release of the November Retail Sales report at 8:30 ET. Other data today includes the November Industrial Production and Capacity Utilization report at 9:15 ET.

In corporate news:

• Netflix (NFLX 918.06, -3.02, -0.3%): Co-CEO Ted Sarandos will visit President-elect Trump, according to Variety
• Pfizer (PFE 25.99, +0.74, +2.9%): reaffirms FY24 EPS and revenue guidance; sees FY25 EPS/revs in line
• Super Micro Computer (SMCI 33.85, +0.41, +1.2%): higher ahead of the open after sharp decline yesterday following news it will be replaced in the Nasdaq-100, effective prior to the open on December 23
• Nucor (NUE 122.53, -1.63, -1.3%): guides Q4 EPS below consensus
• eBay (EBAY 64.46, +0.82, +1.3%): authorizes an incremental $3.0 billion under its current stock repurchase program in addition to the remaining amounts previously authorized

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mostly lower. Japan's Nikkei: -0.1%, Hong Kong's Hang Seng: -0.5%, China's Shanghai Composite: -0.7%, India's Sensex: -1.3%, South Korea's Kospi: -1.3%, Australia's ASX All Ordinaries: +0.8%.
  • In economic data:
    • Australia's December Westpac Consumer Sentiment 92.8 (last 94.6)
    • Hong Kong's November Unemployment Rate 3.1% (last 3.1%)
    • India's November Trade deficit -$37.8 bln (last -$27.1 bln)
  • In news:
    • Australia's ASX All Ordinaries outperformed following a weakening consumer sentiment reading that presumably contributed to expectations of policy easing.
    • China is going to target a 2025 budget deficit that is a record 4.0% of GDP to help preserve its growth target of 'around 5.0%,' according to Reuters.
    • Soaring demand for gold drove a record trade deficit for India, according to Bloomberg.
    • South Korea's Kospi (-1.3%) felt the weight of ongoing political uncertainty related to President Yoon's impeachment.
    • President-elect Trump selected George Edward Glass to be Ambassador to Japan.
• Major European indices are mostly lower. STOXX Europe 600: -0.3%, Germany's DAX: flat, U.K.'s FTSE 100: -0.8%, France's CAC 40: +0.1%, Italy's FTSE MIB: -0.9%, Spain's IBEX 35: -1.3%.
  • In economic data:
    • Eurozone's October Trade Balance EUR6.8 bln (EUR11.7 bln expected; last EUR11.6 bln); December ZEW Economic Sentiment 17.0 (12.2 expected; last 12.5)
    • Germany's December Ifo Business Climate Index 84.7 (85.5 expected; last 85.6); December ZEW Economic Sentiment 15.7 (6.8 expected; last 7.4)
    • UK's November Claimant Count Change 0.3K (28.2K expected; last -10.9K); Unemployment Rate 4.3% (4.3% expected; last 4.3%); Avg. Earnings Index + Bonus 5.2% (4.6% expected; last 4.4%)
  • In news:
    • The FTSE 100 is one of the more notable laggards with BOE rate cut expectations getting dialed back after a report showing stronger than expected employment and earnings data for November.
    • German Chancellor Scholz lost the confidence vote, as expected, setting stage for a snap election in February.
    • Germany's Ifo Business Climate Index hit its lowest level (84.7) since October 2022.
    • The Bank of France cut its 2025 GDP growth forecast from 1.2% to 0.9% while the Swiss cut their 2025 growth forecast from 1.6% to 1.5%. EUR/USD -0.2% to 1.0490.