Stock Market Update

The S&P 500 futures are up 16 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 75 points and are trading 0.4% above fair value, and the Dow Jones Industrial Average futures are up 113 points and are trading 0.3% above fair value.

There's a positive bias in early trading, supported by action in Treasuries. The 10-yr yield is down four basis points to 4.54% and the 2-yr yield is down two basis points to 4.23%. 

Also, the dollar has weakened slightly against the euro and the British pound, leading the US Dollar Index down 0.4% to 108.96.

Pre-open gains in some mega caps has also contributed to the upside bias. 

Today's economic calendar includes: 10:00 ET: December ISM Manufacturing Index (Briefing.com consensus 48.5%; prior 48.4%) and 10:30 ET: EIA Natural Gas Inventories (prior -93 bcf).

In corporate news:

• US Steel (X 29.75, -2.85, -7.7%): White House confirms that President Biden will block Nippon Steel takeover of US Steel
• Apple (AAPL 242.69, -1.23, -0.5%): will pay $95 million to settle privacy lawsuit, according to Reuters
• Tesla (TSLA 382.09, +2.88, +0.7%): rebounding after sharp decline yesterday related to Q4 deliveries
• Boeing (BA 170.93, -0.94, -0.6%): conducting more surprise factory inspections, according to WSJ

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region were mixed to end the week. Japan's Nikkei: closed for holiday (-1.0% for the week), Hong Kong's Hang Seng: +0.7% (-1.6% for the week), China's Shanghai Composite: -1.6% (-5.6% for the week), India's Sensex: -0.9% (+0.7% for the week), South Korea's Kospi: +1.8% (+1.5% for the week), Australia's All Ordinaries: +0.6% (-0.1% for the week).
  • In economic data:
    • Singapore's November Retail Sales -2.8% m/m (last 0.3%) and -0.7% yr/yr (last 2.4%)
  • In news:
    • South Korea's Kospi (+1.8%) was the big winner, rallying in response to acting President Choi vowing "swift and bold" support measures for the market if volatility increases. It was a timely vow given the country's political uncertainty, which hit a new level Friday as officials tried to arrest President Yoon at the presidential compound, but failed after a multi-hour standoff with security forces there.
    • China's Shanghai Composite (-1.6%) was the big loser Friday, capping off an ugly week that saw a 5.6% decline, government bond yields sliding to record lows, and officials trying to stem the bleeding with talk of stepping in with additional stimulus measures.
    • The PBOC said it will cut the 7-day reverse repo rate (currently 1.50%) "at an appropriate time" in 2025, according to FT, and the NDRC plans to increase its issuance of ultra long bonds to subsidize a consumer trade-in program, which will include smartphones, in a bid to boost consumption.
    • China added 28 U.S. companies, including Boeing Defense Space and Security, to its export control list.
    • Bloomberg reports that President Biden will announce his decision today to block Nippon Steel's acquisition of U.S. Steel.
• Major European indices are mostly lower amid some relatively light news flow. STOXX Europe 600: -0.2% (+0.5% for the week), Germany's DAX Index: -0.2% (-0.1% for the week), UK's FTSE 100: flat (+1.4% for the week), France's CAC 40: -0.8% (-0.3% for the week), Italy's FTSE MIB: -0.4% (+0.2% for the week), Spain's IBEX 35: +0.1% (+1.3% for the week).
  • In economic data:
    • Germany's December Unemployment Rate 6.1% (expected 6.2%; last 6.1%); December Unemployment Change 10K (expected 15K; last 7K)
    • Spain's December Unemployment Change -25.3K (expected -46.5K; last -16.0K)
    • UK's BoE Consumer Credit GBP0.878B (expected GBP1.200B; last GBP0.995B)
    • Switzerland's December procure.ch PMI 48.4 (expected 48.4; last 48.5)
  • In news:
    • Germany's unemployment change was less than expected in December and its unemployment rate held steady at 6.1%.
    • Auto stocks and the stocks of luxury goods companies have stumbled, pressured by ongoing worries related to weak consumption in China, and have contributed to the CAC's underperformance.
    • The euro and British pound are rebounding some after getting hit hard yesterday in a move that was attributed to growth rate and policy rate differentials with the U.S.