Stock Market Update

Equity futures point to a lower opening this morning after stocks finished mostly lower in the midweek session. Cyclical names, which outperformed earlier in the week, took a step back. However, several strong mega-cap performances helped the Nasdaq Composite log a modest gain and the S&P 500 notch a record intraday high before retreating. 

Geopolitical headlines remain busy with developments in Venezuela, potential talks of a takeover of Greenland, and escalating tensions between China and Japan producing a fair share of headlines. The market has largely looked past these items, though headlines surrounding Venezuela have caused some swings in the energy sector. The Wall Street Journal reports that President Trump is developing a plan to control the Venezuelan oil industry for years.

Corporate headlines are relatively quiet this morning. Earnings will begin to ramp up next week with the major banking names. 

The market is also anticipating tomorrow’s expected Supreme Court ruling on the legality of President Trump’s tariffs imposed under the International Emergency Economic Powers Act (IEEPA).

Investors will have a sizable batch of economic data to assess this morning, including weekly jobless claims, Q3 Productivity and Unit Labor Costs (preliminary), and the October Trade Balance. 

In corporate news:

• President Trump's request for $1.5 trillion in defense spending (66% increase) will likely run into resistance from Republican budget hawks in Congress, according to CBS News. 
• China is expected to approve Nvidia (NVDA 189.69, +0.51, +0.3%) H200 purchases this quarter, according to Bloomberg. 
• Samsung expects record Q4 profits driven by AI demand, according to Reuters. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei: -1.6%, Hong Kong's Hang Seng: -1.2%, China's Shanghai Composite: -0.1%, India's Sensex: -0.9%, South Korea's Kospi: UNCH, Australia's ASX All Ordinaries: +0.3%.

In news:

• Japan's wage growth undershot expectations for November due to a drop in one-off bonus payments.
• Samsung Electronics released its preliminary Q4 report, which beat expectations.
• Australia's debt outperformed even though Reserve Bank of Australia Deputy Governor Hauser said that the last interest rate cut of the cycle has likely been made.
• Shanghai Securities News reported that Chinese investors are rushing into equity funds amid weakness in bond prices.

In economic data:

• Japan's November Overall Wage Income 0.5% yr/yr (expected 2.3%; last 2.5%) and November Overtime Pay 1.2% yr/yr (last 2.1%). December Household Confidence 37.2 (expected 37.8; last 37.5)
• Australia's November trade surplus AUD2.936 bln (expected surplus of AUD5.140 bln; last surplus of AUD4.353 bln. November Imports 0.2% m/m (last 2.4%) and Exports -2.9% m/m (last 2.8%)

Major European indices trade just below their flat lines. STOXX Europe 600: -0.4%, Germany's DAX: -0.1%, U.K.'s FTSE 100: -0.3%, France's CAC 40: -0.3%, Italy's FTSE MIB: -0.2%, Spain's IBEX 35: +0.1%.

In news:

• European Central Bank policymaker Pereira said that price stability is in place and there is no reason to make any changes to policy at this time, echoing a common sentiment shared among ECB policymakers.
• Bank of England's Decision Maker Panel lowered its year-ahead CPI forecast to 3.2% from 3.4% while three-year outlook was reduced to 2.9% from 3.0%.
• Military contractors are among the outperformers after President Trump called for increasing the U.S. military budget to $1.5 trillion in 2027

In economic data:

• Eurozone's December Business and Consumer Survey 96.7 (expected 97.0; last 97.1). November PPI 0.5% m/m (expected 0.4%; last 0.1%); -1.7% yr/yr (expected -1.9%; last -0.5%). November Unemployment Rate 6.3% (expected 6.4%; last 6.4%)
• Germany's November Factory Orders 5.6% m/m (expected -0.9%; last 1.6%)
• U.K.'s December Halifax House Price Index -0.6% m/m (expected 0.1%; last -0.1%); 0.3% yr/yr (expected 1.1%; last 0.6%)
• France's November trade deficit EUR4.2 bln (expected deficit of EUR4.3 bln; last deficit of EUR3.5 bln). November Current Account deficit EUR800 mln (last surplus of EUR1.40 bln) o
• Italy's November Unemployment Rate 5.7% (expected 6.0%: last 5.8%)
• Swiss December CPI 0.0% m/m, as expected (last -0.2%); 0.1% yr/yr, as expected (last 0.0%)