Stock Market Update

The S&P 500 futures are down 48 points and are trading 0.8% below fair value, the Nasdaq 100 futures are down 278 points and are trading 1.2% below fair value, and the Dow Jones Industrial Average futures are down 211 points and are trading 0.6% below fair value.

There's a negative bias in equity futures in front of the November Personal Spending and Income report at 8:30 ET, which features the Fed's preferred gauge on inflation in the form of PCE Prices. There's also a political element factoring into the negative bias related to a potential government shutdown in the US.

This is after a House bill to fund the government through March 14 and suspend the debt ceiling for two years failed to pass by a vote of 174-235. House Speaker Mike Johnson said Republicans reached a "Plan C" to avoid a government shutdown and he expects there will be votes this morning, according to The Hill.

It is also a quarterly options expiration day, which usually leads to high trading volume.

Separately, the People's Bank of China left its one-year and five-year loan prime rates at 3.10% and 3.60%, respectively.

In corporate news:

• FedEx (FDX 295.09, +19.21, +7.0%): beats by $0.04, reports revs in-line; lowers FY25 EPS and revenue guidance; to pursue a full separation of FedEx Freight, creating a new publicly traded company
• NIKE (NKE 71.47, -5.63, -7.2%): beats by $0.15, beats on revs, North American revenue down 8%; Co expects Q3 revenues to be down low double digits
• Novo Nordisk A/S (NVO 84.15, -19.29, -18.7%): CagriSema demonstrates superior weight loss in adults with obesity or overweight in the REDEFINE 1 trial
• U.S. Steel (X 29.75, -1.97, -6.2%): guides Q4 EPS below consensus; lowers Q4 adjusted EBITDA guidance
• Occidental Petro (OXY 46.31, +0.95, +2.1%): 10% owner Warren Buffett's Berkshire Hathaway (BRK.A BRK.B) bought 8,896,890 shares at $45.17 - $47.00 worth more than $409 mln

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a lower note. Japan's Nikkei: -0.3% (-2.0% for the week), Hong Kong's Hang Seng: -0.2% (-1.3% for the week), China's Shanghai Composite: -0.1% (-0.7% for the week), India's Sensex: -1.5% (-5.0% for the week), South Korea's Kospi: -1.3% (-3.6% for the week), Australia's ASX All Ordinaries: -1.2% (-2.7% for the week).
  • In economic data:
    • Japan's November National CPI 0.6% m/m (last 0.4%); 2.9% yr/yr (last 2.3%). November National Core CPI 2.7% yr/yr (expected 2.6%; last 2.3%)
    • South Korea's November PPI 0.1% m/m (last -0.1%); 1.4% yr/yr (last 1.0%)
    • Hong Kong's November CPI 0.0% m/m (last 0.2%); 1.4% yr/yr (expected 1.5%; last 1.4%)
    • Australia's November Private Sector Credit 0.5% m/m, as expected (last 0.6%) and November Housing Credit 0.5% m/m (last 0.5%)
    • New Zealand's November trade deficit NZD437 mln (expected deficit of NZD1.95 bln; last deficit of NZD1.66 bln). November Credit Card Spending -3.2% yr/yr (last 0.3%)
  • In news:
    • Bank of Japan Governor Ueda said that he wants to see "one more notch" in the rate hike cycle, adding that there might not be enough supportive data to make that decision at the January meeting.
    • The People's Bank of China left its one-year and five-year loan prime rates at 3.10% and 3.60%, respectively.
• Major European indices trade in the red amid sour sentiment related to the growing likelihood of a government shutdown in the U.S. STOXX Europe 600: -1.7% (-3.6% week-to-date), Germany's DAX: -1.7% (-3.7% week-to-date), U.K.'s FTSE 100: -1.0% (-3.4% week-to-date), France's CAC 40: -1.3% (-2.8% week-to-date), Italy's FTSE MIB: -1.4% (-4.5% week-to-date), Spain's IBEX 35: -0.9% (-3.6% week-to-date).
  • In economic data:
    • Germany's November PPI 0.5% m/m (expected 0.3%; last 0.2%); 0.1% yr/yr (expected -0.3%; last -1.1%)
    • U.K.'s November Retail Sales 0.2% m/m (expected 0.5%; last -0.7%); 0.5% yr/yr (expected 0.8%; last 2.0%). November Core Retail Sales 0.3% m/m (expected 0.0%; last -0.9%); 0.1% yr/yr (expected 0.7%; last 1.6%). November Public Sector Net Borrowing GBP11.25 bln (expected GBP15.50 bln; last GBP18.22 bln). December CBIN Distributive Trades Survey -15 (expected -9; last -18)
    • France's November PPI 3.2% m/m (last 0.9%); -5.2% yr/yr (last -6.0%)
    • Italy's December Business Confidence 85.8 (expected 86.0; last 86.5) and Consumer Confidence 96.3 (expected 97.0; last 96.6). October Industrial Sales 0.5% m/m (last -0.3%); -5.3% yr/yr (last -5.7%). November PPI 1.2% m/m (last 0.7%); -0.5% yr/yr (last -2.8%)
  • In news:
    • President-elect Trump called on the EU to increase its purchases of oil and gas from the U.S. or face additional tariffs.
    • France's Prime Minister Bayrou said that a new cabinet will be announced before Christmas Day and a budget should be ready by the middle of February.
    • European Central Bank policymaker Villeroy de Galhau said that the new French government must reduce the deficit next year.
    • Germany's President Steinmeier is expected to dissolve parliament next Friday after Chancellor Olaf Scholz lost his confidence vote.