Stock Market Update

Equity futures point to a modestly higher opening this morning after Friday's action saw the major averages close with slight gains, capping a week of modest gains. 

Stocks drifted higher for the bulk of last week after a relatively sharp slide last Monday that came as a result of a cryptocurrency sell-off. Action in recent sessions has been somewhat muted, with some back-and-forth posturing ahead of this week's FOMC decision. 

The market is largely expecting the Fed to deliver a "hawkish cut" on Wednesday, meaning expectations for further easing in January have remained low. The CME FedWatch tool currently assigns an 89.6% probability to a 25-basis-point rate cut on Wednesday, but just a 21.8% probability to an additional cut in January. 

On the trade front, the Supreme Court could rule as soon as this month on President Trump's tariff authority as companies file lawsuits to get refunds, according to The Washington Post. 

There are no economic data releases scheduled for today. 

In corporate news:

• Microsoft (MSFT 483.81, +0.65, +0.1%) is in talks to switch its custom chip business from Marvell Technology (MRVL 92.90, -6.01, -6.1%) chips to Broadcom (AVGO 399.92, +9.68, +2.5%) chips, according to The Information.
• NextEra Energy (NEE 85.35, +2.22, +2.7%) and Alphabet's (GOOG 321.57, -0.52, -0.2%) Google Cloud announce a landmark strategic energy and technology partnership to accelerate AI growth and transform the energy industry.
• President Trump tells reporters that the Netflix (NFLX 101.12, +0.88, +0.9%) deal for Warner Brothers (WBD 25.95, -0.13, -0.5%) could be an antitrust "problem. " President Trump said he will be personally involved in the approval process, according to Bloomberg.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region started the week on a mixed note with a relative lack of news catalysts. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: +0.5%, India's Sensex: -0.7%, South Korea's Kospi: +1.3%, Australia's All Ordinaries: -0.1%.

In news:

• Attention turned mostly to the economic calendar, which featured better-than-expected export data for November out of China and a downward revision to Japan's Q3 GDP to -0.6% qtr/qtr from the preliminary estimate of -0.4%.
• Market participants are also waiting on this week's central bank meetings, starting with the RBA meeting tomorrow (expected to leave cash rate unchanged) and highlighted by the FOMC decision (25-basis-point cut expected) on Wednesday.

In economic data:

• China's November FX Reserves 3.346 trln yuan (expected 3.360 trln; prior 3.343 trln); November exports 5.9% yr/yr (expected 3.8%; prior -1.1%) and imports 1.9% yr/yr (expected 2.8%; prior 1.0%); November Economy Watchers Index 48.7 (expected 49.5; prior 49.1)
• Japan's Q3 GDP -0.6% qtr/qtr (expected -0.4%; last 0.5%) and -2.3% annualized (expected -1.8%; prior 2.1%); Q3 GDP Price Index 3.4% yr/yr (expected 2.8%; prior 3.3%); November Bank Lending 4.2% yr/yr (expected 4.0%; prior 4.1%)

Major European indices have started the week with little conviction on the part of buyers and sellers. STOXX Europe 600: flat, Germany's DAX: +0.1%, U.K.'s FTSE 100: flat, France's CAC 40: -0.2%, Italy's FTSE MIB: flat, Spain's IBEX 35: flat.

In news:

• Global markets are waiting on key central bank decisions this week (RBA, FOMC, SNB) and next week (BOE, ECB, and BOJ).
• News flow has been relatively light, although Elon Musk has made some waves, saying the EU should be abolished after the European Commission hit X with a $140 million fine.
• ECB member Schnabel suggested the ECB's next move is likely to be a rate hike but conceded that rates were unlikely to change soon.
• French President Macron, unhappy about a trade imbalance, raised the possibility of tariffs against China.

In economic data:

• Eurozone's December Sentix Investor Confidence -6.2 (expected -6.2; prior -7.4)
• Germany's October Industrial Production 1.8% m/m (expected 0.2%; prior 1.1%)
• Switzerland's November SECO Consumer Climate -34 (expected -34, prior -37)