Stock Market Update

The S&P 500 futures are up 21 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 96 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 165 points and are trading 0.3% above fair value.

The positive bias is rooted in rebound action among the mega-cap stocks, better-than-expected economic data out of China, and the continued easing in Treasury yields that have the 10-yr note at 4.58% versus a peak of 4.80% on Tuesday.

Also, there is some speculative energy helping to boost things with rate cut enthusiasm driving European bourses and market participants cognizant that a new administration will officially be in office when markets reopen Tuesday (they are closed Monday for Martin Luther King, Jr. Day). Bloomberg reports that incoming President Trump is planning an executive order to declare cryptocurrency a national priority. Separate reports indicate Mr. Trump might unleash a cascade of executive orders on day one.

In corporate news:

• Fastenal (FAST 71.00, -3.77, -5.0%): misses by $0.02, reports revs in-line
• J.B. Hunt Transport (JBHT 169.45, -16.75, -9.00): misses by $0.09, reports revs in-line
• Regions Fincl (RF 24.85, +0.33, +1.4%): beats by $0.01, misses on revs
• Rivian Automotive (RIVN 14.74, +0.30, +2.1%): closes its loan agreement with the U.S. Department of Energy’s Loan Programs Office for up to $6.6 billion in financial support for the construction of its next manufacturing facility in Stanton Springs North
• SLB (SLB 42.01, +0.92, +2.2%): beats by $0.02, beats on revs; Board approved a 3.6% increase in quarterly cash dividend to $0.285 per share
• State Street (STT 97.50, -2.99, -3.0%): beats by $0.16, beats on revs; sees FY25 NII up 3-5%; sees FY25 expenses up 2-3%
• Tesla (TSLA 423.26, -4.96, -1.2%): Fire occurred at Moss Landing battery plant in California, according to Santa Cruz Sentinel
• Truist (TFC 46.30, +1.32, +2.9%): beats by $0.03, beats on revs; guides Q1 revs below consensus; guides FY25 revs above consensus
• Western Digital (WDC 64.75, +0.50, +0.8%): releases prelim Q2 (Dec) guidance; revs to be at midpoint of prior guidance, earnings toward lower end

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region had a mixed finish to the week, though overall movement was limited. Japan's Nikkei: -0.3%, Hong Kong's Hang Seng: +0.3%, China's Shanghai Composite: +0.2%, India's Sensex: -0.6%, South Korea's Kospi: -0.2%, Australia's ASX All Ordinaries: -0.1%.
  • In economic data:
    • China's Q4 GDP 1.6% qtr/qtr, as expected (last 1.3%); 5.4% yr/yr (expected 5.0%; last 4.6%). 2024 GDP 5.0% (last 4.8%). December Industrial Production 6.2% yr/yr (expected 5.4%; last 5.4%), December Retail Sales 3.7% yr/yr (expected 3.5%; last 3.0%), and December Unemployment Rate 5.1% (expected 5.0%; last 5.0%). December Fixed Asset Investment 3.2% yr/yr (expected 3.3%; last 3.3%) and December House Prices -5.3% yr/yr (last -5.7%)
    • Singapore's December trade surplus SGD3.85 bln (last surplus of SGD6.49 bln). December non-oil exports 1.7% m/m (last 14.7%); 9.0% yr/yr (last 3.4%)
    • New Zealand's December Business PMI 45.9 (last 45.2)
  • In news:
    • China reported its growth figures for December, achieving its 2024 growth target of 5.0%. However, home prices declined for the 18th month in a row.
    • China Securities Times released a poll of 60 economists, predicting 2025 growth of at least 4.8%.
    • There was continued growth in expectations for a rate hike from the Bank of Japan at the end of next week.
• Major European indices are seeking a firmly higher finish to the week alongside solid gains in sovereign debt. STOXX Europe 600: +0.7%, Germany's DAX: +1.1%, U.K.'s FTSE 100: +1.3%, France's CAC 40: +1.1%, Italy's FTSE MIB: +1.0%, Spain's IBEX 35: +0.5%.
  • In economic data:
    • Eurozone's December CPI 0.4% m/m, as expected (last -0.3%); 2.4% yr/yr, as expected (last 2.2%). December Core CPI 0.5% m/m, as expected (last -0.6%); 2.7% yr/yr, as expected (last 2.7%). November Current Account surplus EUR27.0 bln (expected surplus of EUR28.0 bln; last surplus of EUR25.8 bln)
    • U.K.'s December Retail Sales -0.3% m/m (expected 0.4%; last 0.1%); 3.6% yr/yr (expected 4.2%; last 0.0%). December Core Retail Sales -0.6% m/m (expected 0.1%; last 0.1%); 2.9% yr/yr (expected 3.6%; last -0.5%)
  • In news:
    • The U.K. reported weak Retail Sales for December, prompting an increase in expectations for multiple rate cuts from the Bank of England this year.
    • French Prime Minister Bayrou survived a no-confidence vote.
    • European Central Bank policymaker Stournaras spoke in favor of a series of rate cuts at upcoming ECB meetings.