Stock Market Update

The S&P 500 futures currently trade 11 points above fair value. 

Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note after overcoming some early softness. Japan's November exports grew at their fastest pace in nine months with a rebound in growth of exports to the U.S. The Japanese government is reportedly considering a 20% tax deduction for startup investments. Meanwhile, Prime Minister Takaichi said that capacity needs to be strengthened with proactive fiscal policy. Similarly, China's government also called for proactive fiscal policy in 2026.

• In economic data:
  • Japan's October Core Machinery Orders 7.0% m/m (expected -1.8%; last 4.2%); 12.5% yr/yr (expected 3.6%; last 11.6%). November trade surplus JPY322.2 bln (expected surplus of JPY71.2 bln; last deficit of JPY226.1 bln). November Exports 6.1% yr/yr (expected 4.8%; last 3.6%) and Imports 1.3% yr/yr (expected 2.5%; last 0.7%)
  • Singapore's November trade surplus SGD7.669 bln (last surplus of SGD7.168 bln). November Non-Oil Exports 6.6% m/m (last 8.8%); 11.6% yr/yr (last 21.7%) o Australia's November MI Leading Index 0.0% m/m (last 0.1%)
  • New Zealand's Q3 Current Account deficit NZD8.37 bln (expected deficit of NZD7.62 bln; last deficit of NZD1.30 bln)

---Equity Markets---

• Japan's Nikkei: +0.3%
• Hong Kong's Hang Seng: +0.9%
• China's Shanghai Composite: +1.2%
• India's Sensex: -0.1%
• South Korea's Kospi: +1.4%
• Australia's ASX All Ordinaries: -0.1%

Major European indices are mixed with the U.K.'s FTSE (+1.6%) approaching its November high after the release of a cooler than expected CPI report for November, which showed an unexpected deceleration in the year-over-year CPI growth rate to 3.2% from 3.6%. The report solidified expectations for a rate cut tomorrow with the market now pricing in nearly three rate cuts for 2026. The Trump administration is reportedly looking for ways to retaliate against the EU's digital tax.

• In economic data:
  • Eurozone's November CPI -0.3% m/m, as expected (last 0.2%); 2.1% yr/yr (expected 2.2%; last 2.2%). November Core CPI -0.5% m/m, as expected (last -0.5%); 2.4% yr/yr, as expected (last 2.4%). Q3 Labor Cost Index 3.3% yr/yr (expected 3.5%; last 3.9%)
  • Germany's December ifo Business Climate 87.6 (expected 88.2; last 88.0). December Current Assessment 85.6 (expected 85.7; last 85.6) and Business Expectations 89.7 (expected 90.5; last 90.5)
  • U.K.'s December CBI Industrial Trends Orders -32 (expected -35; last -37). November CPI -0.2% m/m (expected 0.0%; last 0.4%); 3.2% yr/yr (expected 3.5%; last 3.6%). November Core CPI 3.2% yr/yr (expected 3.4%; last 3.4%). November Input PPI 0.3% m/m (expected 0.2%; last 0.0%) and Output PPI 0.1% m/m, as expected (last 0.1%). November Inflation Expectations 3.2% (expected 3.5%; last 3.6%)

---Equity Markets---

• STOXX Europe 600: +0.3%
• Germany's DAX: -0.2%
• U.K.'s FTSE 100: +1.6%
• France's CAC 40: -0.4%
• Italy's FTSE MIB: +0.5%
• Spain's IBEX 35: +0.1%