Stock Market Update

The S&P 500 futures are up six points and are trading 0.1% above fair value, the Nasdaq 100 futures are up one point and are trading in-line with fair value, and the Dow Jones Industrial Average futures are up 78 points and are trading 0.2% above fair value.

Early trading features a positive bias, but moves are muted so far. There's not a lot of conviction after yesterday's opening rally faded as the day progressed. 

A move higher in yields has contributed to the muted feeling in equities. The 10-yr yield is up two basis points to 4.63% and the 2-yr yield is up one basis point to 4.28%. 

Today's calendar features:

• 08:30 ET: November Trade Balance (Briefing.com consensus -$77.9B; prior -$73.8B)
• 10:00 ET: December ISM Services PMI (Briefing.com consensus 53.0%; prior 52.1%)
• 10:00 ET November JOLTS - Job Openings (prior 7.744M)
• 13:00 ET: $39 billion 10-yr note reopening

In corporate news:

• Apple (AAPL 242.10, -2.90, -1.2%): mulling expansion of news platform, according to FT; downgraded to Sell from Neutral at MoffettNathanson
• Nvidia (NVDA 153.19, +3.75, +2.5%): CEO Jensen Huang spoke about AI agents, self-driving cars and robotics during CES keynote, according to WSJ
• Meta Platforms (META 627.50, -2.70, -0.4%): is ending its third party fact-checking program and moving to a community notes model; appoints Dana White, John Elkann, and Charlie Songhurst to its board of directors
• Apogee Enterprises (APOG 68.70, -2.43, -3.4%): beats by $0.09, beats on revs; guides FY25 EPS below consensus, revs below consensus
• ONEOK (OKE 102.01, +0.39, +0.4%): announces that CEO Randy Lentz is assuming the newly created postion COO; in this role, Lentz is responsible for all of ONEOK's asset operations
• Stryker (SYK 354.97, -6.39, -1.8%) and Inari (NARI 78.95, +13.95, +21.5%): disclose additional merger details including termination fee of $163 million

Reviewing overnight developments:

• Equity indices in the Asia-Pacific region ended Tuesday on a mostly higher note. Japan's Nikkei: +2.0%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: +0.7%, India's Sensex: +0.3%, South Korea's Kospi: +0.1%, Australia's ASX All Ordinaries: +0.3%.
  • In economic data:
    • China's December FX Reserves $3.202 trln (expected $3.25 trln; last $3.266 trln)
    • Japan's December Monetary Base -0.9% yr/yr (expected -0.2%; last -0.3%)
    • India's flash Annual GDP 6.4% (last 8.2%)
    • Australia's November Building Approvals -3.6% m/m (expected -0.9%; last 5.2%); 6.0% yr/yr (last 13.8%). November Private House Approvals -1.7% m/m (last -4.0%)
  • In news:
    • Japan's Nikkei (+2.0%) returned to its high from the end of December amid strength in Tokyo Electron and Toyota.
    • Hong Kong's Hang Seng (-1.2%) struggled with Tencent falling nearly 7.5% after the U.S. added the company to a list of entities cooperating with the Chinese military. Battery manufacturer CATL was also added to that list.
    • Chinese officials are expected to announce a trade-in program for consumer goods on Wednesday to boost demand.
    • Japan's Finance Minister Kato spoke again about the foreign exchange market, saying that one-sided and sudden moves are being seen.
• Major European indices trade on a mostly higher note. STOXX Europe 600: +0.2%, Germany's DAX: +0.4%, U.K.'s FTSE 100: -0.3%, France's CAC 40: +0.7%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: +0.3%
  • In economic data:
    • Eurozone's Flash December CPI 0.4% m/m (last -0.3%); 2.4% yr/yr, as expected (last 2.2%). Flash December Core CPI 0.5% m/m (last -0.6%); 2.7% yr/yr, as expected (last 2.7%). November Unemployment Rate 6.3%, as expected (last 6.3%)
    • U.K.'s December Halifax House Price Index -0.2% m/m (expected 0.8%; last 1.2%); 3.3% yr/yr (last 4.7%)
    • France's December CPI 0.2% m/m (expected 0.3%; last -0.1%); 1.3% yr/yr (expected 1.5%; last 1.3%)
    • Italy's flash December CPI 0.1% m/m (expected 0.3%; last -0.1%); 1.3% yr/yr (expected 1.5%; last 1.3%). November Unemployment Rate 5.7% (expected 5.8%; last 5.8%)
    • Swiss December CPI -0.1% m/m (expected -0.1%; last -0.1%); 0.6% yr/yr, as expected (last 0.7%)
  • In news:
    • U.K.'s FTSE (-0.3%) underperformed with homebuilders and financials contributing to the relative weakness after the Halifax House Price Index for December recorded its first sequential decline since June 2024.
    • Yields on the U.K.'s 30- and 50- year gilts crept to levels not seen in nearly 30 years as grocery inflation accelerated.
    • The EU Council expects that the National Recovery and Resilience Plan will increase Italy's GDP by 1.4 percentage points by the end of 2026.