Stock Market Update

Equity futures point to a mixed opening this morning as futures tied to the DJIA trade higher after the index notched record highs yesterday, while lingering pressure in tech and AI names sends futures tied to the S&P 500 and the Nasdaq lower. 

Yesterday's action reflected a similar disposition, with small-cap, cyclical, and defensive stocks outperforming as tech names lagged in response to a disappointing earnings report from Oracle (ORCL 197.12, -1.73, -0.9%). There was a modest intraday buy-the-dip bid, which helped the S&P 500 finish slightly higher and notch a record closing high, but mega-cap and tech names were still a drag on the market. 

This morning, Broadcom (AVGO 382.89, -23.48, -5.8%) weighs on the market despite delivering an earnings report that was largely better than expectations. 

The market will not receive any economic data of note this morning but will hear from several FOMC officials throughout the day, including Chicago Fed President Austan Goolsbee (voting FOMC member), who notably dissented against Wednesday's rate cut, preferring to keep the federal funds target rate unchanged. 

In other Fed news, Barron's reports that people close to Kevin Hassett are concerned he will not be independent as Fed Chair. 

In corporate news: 

• Moderate House Republicans and Republican leadership are discussing adding an amendment vote to the healthcare bill that will extend Affordable Care Act subsidies. Vote on legislation is expected next week, according to Politico.
• Broadcom (AVGO 382.89, -23.48, -5.8%) beats EPS expectations by $0.08, beats revenue expectations, guides Q1 revs above consensus, and also increases its quarterly dividend.
• Costco (COST 883.00, -1.48, -0.2%) beat EPS expectations by $0.07 and reported revenues in-line. 
• lululemon athletica (LULU 205.30, +18.29, +9.8%) beat EPS expectations by $0.38, beat revenue expectations, and guided Q4 EPS below consensus with revenues in-line. The company approves a $1 billion increase to its share repurchase program, and CEO Calvin McDonald will step down
• Paramount (PSKY 14.11, -0.01, -0.1%) might increase its bid for Warner Brothers (WBD 29.94, +0.45, +1.5%) by 10%, according to The New York Post. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region had a higher finish to the week. Japan's Nikkei: +1.4%, Hong Kong's Hang Seng: +1.8%, China's Shanghai Composite: +0.4%, India's Sensex: +0.5%, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: +1.2%.

In news:

• China held its Central Economic Work Conference with officials pledging a continuation of fiscal expansion and more interest rate and reserve requirement ratio cuts.
• Japan is planning to make Hokkaido its base for advanced chip development.
• Large Japanese food producer Ajinomoto is raising the prices of some of its products by double digits.
• Banko Sentral ng Pilipinas lowered its policy rate by 25 basis points to 4.50%, as expected.

In economic data:

• China's November New Loans CNY390.0 bln (last CNY220.0 bln). November Outstanding Loan Growth 6.4% yr/yr (last 6.5%) and total social financing CNY2.49 trln (last CNY810.0 bln)
• Japan's October Industrial Production 1.5% m/m (expected 1.4%; last 2.6%) and Capacity Utilization 3.3% m/m (last 2.5%)
• South Korea's November Import Price Index 2.2% yr/yr (last 0.5%); 7.0% yr/yr (last 4.8%)
• India's November CPI 0.71% yr/yr (expected 0.70%; last 0.25%)
• New Zealand's November Business PMI 51.4 (last 51.2). November Electronic Card Retail Sales 1.2% m/m (last 0.2%); 1.6% yr/yr (last 0.8%)

Major European indices trade in the green with banks contributing to the advance. STOXX Europe 600: +0.2%, Germany's DAX: +0.2%, U.K.'s FTSE 100: +0.1%, France's CAC 40: +0.4%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.5%.

In news:

• The U.K.'s GDP contracted slightly in October, putting the Q4 reading at risk of a contraction ahead of next week's policy meeting at the Bank of England that could result in a rate cut.
• The EU will freeze Russian central bank assets held in Europe indefinitely and could use a large portion to fund a loan for Ukraine.

In economic data:

• Germany's November CPI -0.2% m/m, as expected (last 0.3%); 2.3% yr/yr, as expected (last 2.3%)
• U.K.'s October GDP -0.1% m/m (expected 0.1%; last -0.1%); 1.1% yr/yr (expected 1.4%; last 1.1%). Construction Output -0.6% m/m (expected -0.1%; last 0.2%); 0.9% yr/yr (expected 1.6%; last 1.3%). October Industrial Production 1.1% m/m (expected 0.9%; last -2.0%); -0.8% yr/yr (expected -1.2%; last -2.5%). October Manufacturing Production 0.5% m/m (expected 1.1%: last -1.7%); -0.8% yr/yr (expected -0.1%; last -2.2%). October trade deficit GBP22.54 bln (expected deficit of GBP19.10 bln; last deficit of GBP18.88 bln)
• France's November CPI -0.2% m/m (expected -0.1%; last 0.1%); 0.9% yr/yr, as expected (last 0.9%)
• Spain's November CPI 0.2% m/m, as expected (last 0.7%); 3.0% yr/yr, as expected (last 3.1%). November Core CPI 2.6% yr/yr, as expected (last 2.5%)