Stock Market Update

The S&P 500 futures are down nine points and are trading 0.1% below fair value, the Nasdaq 100 futures are down 45 points and are trading 0.2% below fair value, and the Dow Jones Industrial Average futures are down 25 points and are trading 0.1% below fair value.

Equity futures indicate a lower open. Losses in chipmakers have weighed down the broader market after news that President Biden is planning an additional round of restrictions on AI chip exports, according to Bloomberg.

The vibe in the market could shift following the release of the December Employment Situation Report at 8:30 ET. Other data today includes the preliminary January University of Michigan Consumer Sentiment survey at 10:00 ET.

The price action in Treasuries is still top of mind for participants, adding more pressure on equities. The 10-yr yield is unchanged at 4.69% and the 2-yr yield is up two basis points to 4.29%.

In corporate news:

• NVIDIA (NVDA 137.72, -2.31, -1.7%): Biden plans additional round of restrictions on AI chip exports, according to Bloomberg
• Tesla (TSLA 395.80, +0.75, +0.2%): updates Model Y in China, according to FT
• Constellation Energy (CEG 272.84 +29.00, +11.9%): confirms plans to acquire Calpine at an equity purchase price of approximately $16.4 billion
• Delta Air Lines (DAL 65.71, +4.29, +7.0%): beats by $0.09, beats on revs; guides Q1 EPS in-line, revs above consensus; guides FY25 EPS below consensus
• Walgreens Boots Alliance (WBA 10.24, +1.02, +11.1%): beats by $0.13, beats on revs; reaffirms FY25 EPS guidance
• Taiwan Semiconductor Manufacturing (TSM 209.51, +2.39, +1.2%): reports Dec revs increased 57.8% yr/yr
• Costco (COST 942.00, +14.63, +1.6%): reports December adjusted comparable sales of +9.9%

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended the week on a lower note with China's Shanghai Composite (-1.3%) falling to a level not seen since the middle of October while Japan's Nikkei (-1.1%) slipped toward its 50-day moving average. Japan's Nikkei: -1.1% (-1.8% for the week), Hong Kong's Hang Seng: -0.9% (-3.5% for the week), China's Shanghai Composite: -1.3% (-1.3% for the week), India's Sensex: -0.3% (-2.3% for the week), South Korea's Kospi: -0.2% (+3.0% for the week), Australia's ASX All Ordinaries: -0.4% (+0.4% for the week).
  • In economic data:
    • Japan's November Household Spending 0.4% m/m (expected -0.9%; last 2.9%); -0.4% yr/yr (expected -0.6%; last -1.3%). November Leading Index 107.0 (expected 107.2; last 109.1) and Coincident Indicator -1.5% m/m (last 2.8%)
    • India's November Industrial Production 5.2% yr/yr (expected 4.0%; last 3.7%) and November Manufacturing Output 5.8% m/m (last 4.4%)
  • In news:
    • The People's Bank of China said that it will suspend bond purchases this month due to a short supply and excess demand.
    • The PBoC and China's foreign exchange regulator will brief the press on financial support for the economy on January 14.
    • ANZ pulled forward its forecast for a rate cut from the Reserve Bank of Australia to February.
• Major European indices are mixed with Spain's IBEX (-0.9%) showing relative weakness as it pulls back from a one-month high with financials and energy names contributing to the weakness. STOXX Europe 600: -0.1% (+1.4% week-to-date), Germany's DAX: +0.3% (+2.4% week-to-date), U.K.'s FTSE 100: -0.4% (+0.8% week-to-date), France's CAC 40: +0.2% (+3.1% week-to-date), Italy's FTSE MIB: +0.1% (+3.6% week-to-date), Spain's IBEX 35: -0.9% (+1.2% week-to-date).
  • In economic data:
    • France's November Consumer Spending 0.3% m/m (expected 0.1%; last -0.3%) and November Industrial Production 0.2% m/m (expected -0.1%; last -0.3%)
    • Italy's November Retail Sales -0.4% m/m (expected 0.2%; last -0.5%); 1.1% yr/yr (last 2.6%)
    • Spain's November Industrial Production -0.4% yr/yr (last 1.5%)
    • Swiss December Unemployment Rate 2.6% (expected 2.7%; last 2.6%)
  • In news:
    • Bank of England Deputy Governor Breeden tried to assuage concerns about recent volatility in the pound and Gilts, saying that the quantitative tightening program could be adjusted.
    • British supermarket operator Sainsbury was the latest retailer to report disappointing results for the holiday period.