Stock Market Update

The S&P 500 futures are down three points and are trading fractionally below fair value, the Nasdaq 100 futures are down 36 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are up 16 points and are trading in-line with fair value.

The early tone is mixed as market participants wait on key events this week that include earnings reports from Oracle (ORCL) and Costco (COST), the November Consumer Price Index, the November Producer Price Index, and the ECB policy decision.

In the interim, this morning's news flow focuses on the overthrow of the Assad regime in Syria, South Korea's President Yeol surviving an impeachment vote, Chinese leaders changing their stance on monetary policy to moderately loose from prudent, China opening an anti-monopoly investigation of NVIDIA (NVDA), and President-elect Trump stating in a "Meet the Press" interview that he won't replace Fed Chair Powell and will pursue his aim to extend the tax cuts, levy tariffs, deport illegal immigrants, and try to end birthright citizenship.

The lone piece of economic today will be the October Wholesale Inventories report (Briefing.com consensus 0.2%; prior -0.2%) at 10:00 a.m. ET.

The 2-yr note yield is up one basis points to 4.11% and the 10-yr note yield is is up three basis points to 4.18%. The U.S. Dollar Index is flat at 106.02.

In corporate news:

• Alphabet (GOOG 176.03, -0.26, -0.2%): CFPB orders federal supervision of Google following contested designation
• Apollo Global Management (APO 188.72, +10.87, +6.1%) to be added to S&P 500 prior to open on December 23
• Apple (AAPL 242.32, -0.52, -0.2%) mulling bringing cell phone service to Macs for the first time, according to Bloomberg
• Arthur J. Gallagher (AJG 292.60, -4.11, -1.4%) agrees to acquire AssuredPartners for gross consideration of $13.45 billion cash; announces $8.5 billion common stock offering
• Interpublic Group (IPG 33.50, +4.24, +14.5%): Omnicom (OMC 99.80, -3.62, -3.5%) buying IPG in stock swap deal
• Macy's (M 16.92, +0.49, +3.0%): Barington Capital builds stake in Macy's and wants changes at the company, according to The Wall Street Journal
• NVIDIA (NVDA 139.71, -2.73, -1.9%): China investigating NVDA over anti-monopoly laws, according to Bloomberg
• Workday (WDAY 290.71, +24.29, +9.1%) to be added to S&P 500 prior to open on December 23

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region began the week on a mixed note. Japan's Nikkei: +0.2%, Hong Kong's Hang Seng: +2.8%, China's Shanghai Composite: -0.1%, India's Sensex: -0.3%, South Korea's Kospi: -2.8%, Australia's ASX All Ordinaries: unchanged.
  • In economic data:
    • China's November CPI -0.6% m/m (expected -0.4%; last -0.3%); 0.2% yr/yr (expected 0.5%; last 0.3%). November PPI -2.5% yr/yr (expected -2.8%; last -2.9%)
    • Japan's Q3 GDP 0.3% qtr/qtr (expected 0.2%; last 0.5%); Q3 GDP Price Index 2.4% yr/yr (expected 2.5%; last 3.2%), Q3 GDP Private Consumption 0.7% qtr/qtr (expected 0.9%; last 0.6%), and Q3 GDP Capital Expenditure -0.1% qtr/qtr (expected -0.2%; last 1.1%). October Current Account JPY2.41 trln (expected JPY2.28 trln; last JPY1.27 trln). November Bank Lending 3.0% yr/yr (expected 2.6%; last 2.6%) and November Economy Watchers Current Index 49.4 (expected 47.3; last 47.5)
    • Australia's October Building Approvals 4.2% m/m, as expected (last 5.8%) and Private House Approvals -5.2% m/m, as expected (last 4.1%)
    • Singapore's Q3 Unemployment Rate 1.9% (last 2.0%)
  • In news:
    • China's deflation accelerated in November to a pace not seen since March, reducing the yr/yr CPI growth rate to just 0.2%.
    • China's Politburo made an official change to its monetary stance from "prudent" to "moderately loose."
    • Fitch lowered its 2025 growth forecast for China to 4.3% from 4.5% and reduced the outlook for 2026 to 4.0% from 4.3%.
    • South Korea's won weakened to its lowest level against the dollar in more than two years after a failed impeachment vote against President Yoon.
    • Nikkei speculated that the Bank of Japan may forego a rate hike next week in favor of an increase in January.
• Major European indices are mixed. STOXX Europe 600: +0.1%, Germany's DAX: +0.1%, U.K.'s FTSE 100: +0.5%, France's CAC 40: +0.6%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: -0.2%.
  • In economic data:
    • Eurozone's December Sentix Investor Confidence -17.5 (expected -12.4; last -12.8)
    • Swiss November SECO Consumer Climate -37 (expected -38; last -27)
  • In news:
    • Luxury goods makers have contributed to the strength after China loosened its monetary policy stance.
    • President Macron is meeting with political leaders today in hopes of naming a caretaker prime minister in the coming days.
    • The market remains confident that the European Central Bank will announce a 25-basis point rate cut on Thursday.