Stock Market Update

The S&P 500 futures are down 50 points and are trading 0.9% below fair value, the Nasdaq 100 futures are down 200 points and are trading 1.0% below fair value, and the Dow Jones Industrial Average futures are down 349 points and are trading 0.8% below fair value.

Contracts linked to the S&P 500, Nasdaq 100, and Dow industrials are lower after Friday's tech-led declines. Ongoing selling pressure in the mega cap space has contributed to the negative bias ahead of the last sessions of the year. 

Treasury yields are lower. The 2-yr yield is down four basis points to 4.29% and the 10-yr yield is down four basis points to 4.58%.

Today's economic lineup features the December Chicago PMI at 9:45 a.m. ET and the November Pending Home Sales at 10:00 a.m. ET.

In corporate news:

• Nvidia (NVDA 135.73, -1.28, -0.9%): wants to enter robotics industry to drive growth, according to FT
• Alphabet (GOOG 192.96, -1.08, -0.6%): CEO Sundar Pichai says new artificial intelligence features are coming next year, according to CNBC
• Boeing (BA 175.80, -4.92, -2.7%): Jeju Air Flight 7C2216 veered off the runway and crashed; 179 people reported dead; plane was a Boeing 737-800; South Korea will inspect all Boeing (BA) B737-800 aircraft following crash, according to FT
• AT&T (T 22.83, -0.03, -0.1%) & Verizon (VZ 39.89, -0.03, -0.1%): networks were impacted by China supported Salt Typhoon hacking operation. Networks are now clear, according to Bloomberg

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mostly lower on what was the last trading day of the year for Japan's Nikkei and South Korea's Kospi. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: -0.2%, China's Shanghai Composite: +0.2%, India's Sensex: -0.6%, South Korea's Kospi: -0.2%, Australia's All Ordinaries: -0.3%.
  • In economic data:
    • Japan's December au Jibun Bank Manufacturing PMI 49.6 (expected 49.5; last 49.0)
    • South Korea's November Industrial Production -0.7% m/m (expected -0.4%; last 0.0%) and 0.1% yr/yr (expected 0.4%; last 6.3%); November Retail Sales 0.4% m/m (last -0.8%); November Service Sector Output -0.2% m/m (last 0.6%)
    • Hong Kong's November Exports 2.1% (last 3.5%) and Imports 5.7% (last 4.5%)
  • In news:
    • Australia and Hong Kong will have early closes on Tuesday.
    • Japan's Nikkei logged its highest year-end finish since 1989 despite a 1.0% decline.
    • Japan's Manufacturing PMI (49.6) remained in contraction territory for the sixth consecutive month.
    • South Korean trading was overshadowed by the Jeju Air plane crash on Sunday. A national mourning period has been declared until Jan. 4 and the acting president has ordered an investigation into the airline's operational systems.
    • PBOC Gov Pan reiterated that he sees more scope for RRR cuts, according to People's Daily, while President Xi reportedly said reform and development tasks for 2025 will be "arduous."
    • Advantest's CEO warned that there will be big reverberations for the supply chain if if there is any slowdown in the buildout of data centers.
• Major European indices are trading tentatively amid thin conditions ahead of the New Year's holiday. STOXX Europe 600: -0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +0.2%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.6%.
  • In economic data:
    • Spain's December CPI 0.4% m/m (expected 0.3%; last 0.2%) and 2.8% yr/yr (expected 2.6%; last 2.4%)
    • Switzerland's December Leading Indicators 99.5 (expected 101.1; last 102.9)
  • In news:
    • Germany's DAX and Italy's FTSE MIB will be closed Tuesday while markets in the UK, Spain, and France will see early closes.
    • ECB Holzmann suggests a possibility of waiting longer before the next rate cut, according to Reuters, while ECB member Knot talked about the possibility of China exporting deflation to Europe as it battles the U.S. in trade war, according to Bloomberg.
    • A higher-than-expected preliminary CPI reading for December out of Spain has contributed to the thinking that the ECB may wait longer on a rate cut and has helped prop up the euro today against the dollar. EUR/USD +0.3% to 1.0454.