Stock Market Update

The S&P 500 futures are up 11 points and are trading 0.2% above fair value, the Nasdaq 100 futures are up 35 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 64 points and are trading 0.2% above fair value.

Stock futures are higher in front of the final session of the year. Pre-open gains in the mega cap space have contributed to the upside bias, along with some buy-the-dip interest after recent declines.  

Treasury yields are lower. The 10-yr yield is down three basis points to 4.52% and the 2-yr yield is down two basis points to 4.23%.

Today's economic lineup features the October FHFA Housing Price index and October S&P Case-Shiller Home Price index at 9:00 ET.

In corporate news:

• Tesla (TSLA 421.43, +4.02, +1.0%): will fix software in 77,650 China produced Model 3 and Model Y vehicles, according to Reuters
• Boeing (BA 177.03, +0.48, +0.3%): receives FAA airworthiness directive for certain 737-8, 737-9, and 737-8200 airplanes; South Korea investigators are looking at why the landing gear wasn't down on the Jeju Air flight that crashed this weekend, according to WSJ
• VeriSign (VRSN 210.80, +5.70, +2.8%): 10% owner Warren Buffett's Berkshire Hathaway (BRK.A / BRK.B) bought another 76,487 shares at $201.12 - $206.11 worth approx. $15.6 mln

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region finished the year amid thin trading conditions tied to market closures in several locales for the New Year's holiday, most notably Japan and South Korea. Japan's Nikkei: closed for holiday (+19.2% for the year), Hong Kong's Hang Seng: +0.1% (+17.7% for the year), China's Shanghai Composite: -1.6% (+12.6% for the year), India's Sensex: -0.1% (+8.2% for the year), South Korea's Kospi: closed for holiday (-9.6% for the year), Australia's All Ordinaries: -0.9% (+7.5% for the year).
  • In economic data:
    • China's December Manufacturing PMI 50.1 (expected 50.3; last 50.3) and Non-Manufacturing PMI 52.2 (expected 50.2; last 50.0)
    • South Korea's December CPI 0.4% m/m (expected 0.2%; last -0.3%) and 1.9% yr/yr (expected 1.7%; last 1.5%)
  • In news:
    • The markets that were open were mostly lower, reacting to Monday's losses in the U.S. and China's weaker-than-expected manufacturing PMI report for December. The latter checked in at 50.1, just barely above the expansion threshold of 50.0 but down from 50.3 in November.
    • President Xi for his part announced the Chinese economy was on course to expand around 5% for 2024 and described it as "overall stable and progressing amid stability," according to Bloomberg citing the Xinhua News Agency.
    • South Korea's December CPI report was also problematic, accelerating on a month-over-month and year-over-year basis from November.
    • Hong Kong's Hang Seng closed early, eking out a small gain that padded the first annual gain for the index since 2019.
• Major European indices open for trading on Tuesday are higher. STOXX Europe 600: +0.3% (+5.8% for the year), Germany's DAX: closed for holiday (+18.8% for the year), U.K.'s FTSE 100: +0.7% (+5.7% for the year), France's CAC 40: +0.6% (-2.4% for the year), Italy's FTSE MIB: closed for holiday (+12.6% for the year), Spain's IBEX 35: +0.5% (+14.8% for the year).
  • In economic data:
    • There was no economic data of note
  • In news:
    • Germany, Italy, and Switzerland were closed for the New Year's holiday.
    • France, the UK, and Spain have early closes.
    • Otherwise uneventful with a lack of any meaningful corporate or economic news to drive things.
    • EUR/USD flat at 1.0407.