Stock Market Update

The S&P 500 futures currently trade 33 points above fair value.

Equity indices in the Asia-Pacific region began the Christmas week on a higher note. The Japanese yen bounced off its lowest level of the year against the dollar while JGBs retreated, sending yields on the 30-yr bond and shorter tenors to fresh highs for the year. Chip names saw renewed strength in Japan and South Korea. Softbank reportedly aims to provide its $22.5 bln commitment to OpenAI by the end of the year. South Korea's exports through the first 20 days of December were up 6.8% yr/yr with chip exports jumping 41.8%. The People's Bank of China made no changes to its one-year (3.00%) and five-year (3.50%) loan prime rates.

• In economic data:
  • Hong Kong's November CPI 0.0% m/m (last 0.3%); 1.2% yr/yr (last 1.2%)
  • India's November Infrastructure Output 1.8% yr/yr (last 0.0%)

---Equity Markets---

• Japan's Nikkei: +1.8%
• Hong Kong's Hang Seng: +0.4%
• China's Shanghai Composite: +0.7%
• India's Sensex: +0.8%
• South Korea's Kospi: +2.1%
• Australia's ASX All Ordinaries: +0.9%

Major European indices trade in the red with France's CAC (-0.5%) and U.K.'s FTSE (-0.6%) showing relative weakness. European Central Bank policymaker Simkus said that growth has improved, but is still sluggish, and that inflation should stay near the 2.0% target in the medium term. A survey from Germany's ifo Institute showed that just over a quarter of German companies expect further deterioration of business in 2026. U.S. officials met with representatives from Ukraine and Russia in Florida, but a breakthrough has remained elusive.

• In economic data:
  • U.K.'s Q3 GDP 0.1% qtr/qtr, as expected (last 0.3%); 1.3% yr/yr, as expected (last 1.4%). Q3 Business Investment 1.5% qtr/qtr (expected -0.3%; last -1.7%); 2.7% yr/yr (expected 0.7%; last 3.2%). Q3 Current Account deficit GBP12.1 bln (expected deficit of GBP19.1 bln; last deficit of GBP21.2 bln)
  • Italy's November PPI 1.0% m/m (last -0.2%); -0.2% yr/yr (last 0.1%)

---Equity Markets---

• STOXX Europe 600: -0.3%
• Germany's DAX: -0.1%
• U.K.'s FTSE 100: -0.6%
• France's CAC 40: -0.5%
• Italy's FTSE MIB: -0.2%
• Spain's IBEX 35: -0.2%