Stock Market Update

Equity futures point to a lower open this morning after stocks drifted modestly lower from recent record highs yesterday. While yesterday's release of the November CPI (0.3%; Briefing.com consensus: 0.3%) came in line with expectations and Core CPI (0.2; Briefing.com consensus: 0.3%) offered a slight surprise, the data did not alter the market's expected timeline for Fed easing this year. 

Investors now await the 8:30 a.m. release of the November PPI (Briefing.com consensus 0.2%) and Core PPI (0.2%) for further insight into inflation trends at the producer level.

Additionally, a slate of earnings reports from the major banks are trickling through this morning. So far, Bank of America (BAC 55.16, +0.62, +1.1%) trades higher after topping estimates, while Wells Fargo (WFC 92.00, -1.56, -1.7%) moves lower after beating EPS estimates but missing revenue expectations. The financials sector was a laggard in yesterday's trade following a post-earnings slide from JPMorgan Chase (JPM), while credit card names faced another day of losses following President Trump's call for a one-year 10% interest rate cap on credit cards. 

The Supreme Court could issue a ruling on the legality of President Trump's IEEPA tariffs today, which could act as another catalyst, particularly for tariff-sensitive sectors. 

Elsewhere, geopolitical tensions remain high, with President Trump threatening "strong action" if Iranian officials begin hanging protestors, according to CBS News. 

In corporate news:

• Bank of America (BAC 55.16, +0.62, +1.1%) beat EPS expectations by $0.02 and beat revenue expectations. 
• President Trump said JPMorgan Chase (JPM 310.83, -0.07, -0.0%) CEO Jamie Dimon was wrong to suggest he was undermining the independence of the Fed, according to Bloomberg. 
• Chinese customs agents were told Nvidia (NVDA 184.59, -1.22, -0.7%) chips are not permitted, according to Reuters. 
• Wells Fargo (WFC 92.00, -1.56, -1.7%) beat EPS expectations by $0.10 and missed revenue expectations.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note with Japan's Nikkei (+1.5%) and South Korea's Kospi (+0.7%) hitting fresh records. Japan's Nikkei: +1.5%, Hong Kong's Hang Seng: +0.6%, China's Shanghai Composite: -0.3%, India's Sensex: -0.3%, South Korea's Kospi: +0.7%, Australia's ASX All Ordinaries: +0.2%.

In news:

• Stock exchanges in Beijing and Shenzhen announced that margin ratios will be increased to 100% from 80%.
• China's trade surplus for December was a bit smaller than expected, but that was owed to imports growing much faster than expected.
• Export growth also exceeded estimates, though exports to the U.S. were down about 30% yr/yr.

In economic data:

• China's December trade surplus $114.10 bln (expected surplus of $114.30 bln; last surplus of $111.68 bln). December Imports 5.7% yr/yr (expected 0.9%; last 1.9%) and Exports 6.6% yr/yr (expected 3.0%; last 5.9%)
• Japan's January Reuters Tankan Index 7 (last 10) and December Machine Tool Orders 10.6% yr/yr (expected 14.2%; last 16.8%)
• South Korea's December Import Price Index 0.3% yr/yr (last 1.9%) and Export Price Index 5.5% yr/yr (last 6.8%). December Unemployment Rate 4.0% (last 2.7%)
• India's December WPI Inflation 0.83% yr/yr (expected 0.30%; last -0.32%)
• Australia's November Building Approvals 15.2% m/m, as expected (last -6.1%); 20.2% yr/yr, as expected (last -1.8%). November Private House Approvals 1.3% m/m, as expected (last -1.3%)
• New Zealand's November Building Consents 2.8% m/m (last -0.7%)

Major European indices trade near their flat lines. STOXX Europe 600: +0.1%, Germany's DAX: -0.3%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.3%.

In news:

• European Central Bank policymakers De Guindos and Kazaks said that policy is in a good place with respect to inflation.
• The Bank of France expects domestic Q4 growth of just 0.2%.
• Bank of France Governor Villeroy de Galhau warned that France should not exceed a 5% deficit to GDP ratio in 2026.
• BP acknowledged that it will record a writedown of $4-5 bln in Q4 due to weak performance of its renewable energy unit.

There is no economic data of note.