Stock Market Update

The S&P 500 futures are up one point and are trading fractionally above fair value, the Nasdaq 100 futures are up 34 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down 107 points and are trading 0.2% below fair value.

Contracts linked to the S&P 500 and Nasdaq 100 are higher, driven by momentum from yesterday's CPI-induced rally. Futures tied to the Dow industrials are lower, clipped by an earnings-related decline in UnitedHealth (UNH) ahead of the open. 

Other earnings news this morning has garnered mixed responses from market participants. Bank of America (BAC) and US Bancorp (USB) are lower following their results while Taiwan Semiconductor Manufacturing (TSM) and Target (TGT) show pre-open gains after reporting solid results. 

Treasury yields are slightly higher, limiting enthusiasm in the stock market. The 10-yr yield is up three basis points to 4.68% and the 2-yr yield is up four basis points to 4.30%.

Participants receive more market-moving data today in the form of December Retail Sales and weekly jobless claims at 8:30 ET.

In corporate news:

• UnitedHealth (UNH 525.86, -17.56, -3.2%): beats by $0.08, reports revs in-line; reaffirms FY25 EPS guidance, revs guidance
• Bank of America (BAC 47.00, -0.10, -0.2%): beats by $0.05, reports revs in-line; provides FY25 outlook
• Morgan Stanley (MS 131.60, +1.05, +0.8%): beats by $0.52, beats on revs
• Taiwan Semiconductor Manufacturing (TSM 215.53, +8.73, +4.2%): beats on EPS and revs
• Target (TGT 135.58, +1.05, +0.8%): raises Q4 comp guidance; reaffirms Q4 EPS guidance; announces holiday sales; makes leadership changes
• U.S. Bancorp (USB 49.48, -1.42, -2.8%): beats by $0.02, reports revs in-line; guides FY25 revs in-line
• PNC (PNC 194.20, -6.24, -3.1%): beats by $0.44, beats on revs; guides Q1 revs in-line
• Meta Platforms (META 609.32, -7.80, -1.3%): reacting to news that President-elect Trump mulls executive order to suspend enforcement of the TikTok ban, according to The Washington Post

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Thursday on a higher note. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: +1.2%, China's Shanghai Composite: +0.3%, India's Sensex: +0.4%, South Korea's Kospi: +1.2%, Australia's ASX All Ordinaries: +1.3%.
  • In economic data:
    • Japan's December PPI 0.3% m/m (expected 0.4%; last 0.4%); 3.8% yr/yr, as expected (last 3.8%)
    • Australia's January MI Inflation Expectations 4.0% (last 4.2%). December Employment Change 56,300 (expected 14,500; last 28,200) and full Employment Change -23,700 (last 49,500). December Unemployment Rate 4.0%, as expected (last 3.9%) and Participation Rate 67.1% (expected 67.0%; last 67.0%)
    • New Zealand's December FPI 0.1% m/m (last -0.1%)
  • In news:
    • The Japanese yen reached its best level against the dollar in nearly a month after Japan Center for Economic Research said that it expects large companies to increase pay by 4.7%.
    • There was more speculation that the Bank of Japan will make another rate hike at the conclusion of its two-day meeting next Friday.
    • Shanghai Securities News speculated that the People's Bank of China will lower the reserve requirement ratio before the end of the month.
    • Bank of Korea left its policy rate at 3.00% against expectations for a 25-basis point cut, though Governor Rhee acknowledged that policymakers believe that rate cuts will be necessary in the coming months.
• Major European indices trade on a mostly higher note. STOXX Europe 600: +0.7%, Germany's DAX: UNCH, U.K.'s FTSE 100: +0.6%, France's CAC 40: +2.0%, Italy's FTSE MIB: +0.8%, Spain's IBEX 35: -0.5%.
  • In economic data:
    • Eurozone's November trade surplus EUR16.4 bln (expected surplus of EUR11.8 bln; last surplus of EUR8.6 bln)
    • Germany's December CPI 0.5% m/m (expected 0.4%; last -0.2%); 2.6% yr/yr, as expected (last 2.2%)
    • U.K.'s November GDP 0.1% m/m (expected 0.2%; last -0.1%); 1.0% yr/yr (expected 1.3%; last 1.1%). November Construction Output 0.4% m/m, as expected (last -0.3%); 0.2% yr/yr (expected 0.1%; last -0.5%). November Industrial Production -0.4% m/m (expected 0.1%; last -0.6%); -1.8% yr/yr (expected -1.0%; last -1.1%). November Manufacturing Production -0.3% m/m (expected -0.2%; last -0.6%); -1.2% yr/yr (expected -0.4%; last -0.4%). November trade deficit GBP19.31 bln (expected deficit of GBP18.00 bln; last deficit of GBP19.33 bln)
    • Italy's December CPI 0.1% m/m, as expected (last -0.1%); 1.3% yr/yr, as expected (last 1.3%). November trade surplus EUR4.218 bln (expected surplus of EUR4.500 bln; last surplus of EUR5.067 bln)
  • In news:
    • France's CAC (+2.0%) led thanks to leadership from luxury goods makers after strong results from Richemont while Spain's IBEX (-0.5%) underperforms amid weakness in select energy and industrial names.
    • A survey conducted by the Bank of England found that lenders reported higher funding volumes between September and November, but a decrease was expected in the following three-month period.