There is a positive tone in the equity futures market coming off last week’s losses for most major indices. The positivity has a little speculative flair to it, borrowing from the trading excitement that briefly took Bitcoin over $106,000, and the recognition that the latter half of December tends to be a good period for the stock market, and particularly the small-cap stocks.
Currently, the S&P 500 futures are up 22 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 121 points and are trading 0.5% above fair value, and the Dow Jones Industrial Average futures are up 91 points and are trading 0.2% above fair value.
There isn’t much corporate news of note this morning, but one headline drawing some added attention is the report that Axon Enterprises (AXON), Palantir Technologies (PLTR), and MicroStrategy (MSTR) will be added to the Nasdaq 100 prior to the open on December 23, replacing Illumina (ILMN), Super Micro Computer (SMCI), and Moderna (MRNA) with the annual reconstitution of the index.
There will be some important corporate news as the week progresses, highlighted by earnings reports from General Mills (GIS), Lennar (LEN), Micron (MU), Accenture (ACN), CarMax (KMX), Darden Restaurants (DRI), FedEx (FDX), Nike (NKE), and Carnival (CCL).
There will be important economic news, too, as the week progresses, including the November Retail Sales, Industrial Production, Housing Starts, Existing Home Sales, and Personal Income and Spending reports, the latter of which features the Fed’s preferred inflation gauge in the PCE Price Index.
The December New York Fed Empire State Manufacturing Survey reported this morning was much weaker than expected, checking in at 0.2 (Briefing.com consensus 10.0) on the heels of a 31.2 reading for November. The downturn was paced by a sharp drop-off in the new orders, shipments, and average workweek indices. The dividing line between expansion and contraction for this index is 0.0
The preliminary December S&P Global US Manufacturing PMI (prior 49.7) and Services PMI (prior 56.1) reports will be released at 9:45 a.m. ET. They will come on the heels of weak preliminary manufacturing PMI readings out of the eurozone, a disappointing retail sales report for November out of China, and a Moody’s downgrade of France from Aa3 to Aa2 that helped put a bid in the Treasury market following last week’s losses.
The 2-yr note yield is down two basis points to 4.22% and the 10-yr note yield is down three basis points to 4.37%.
Treasuries will be a focal point this week amid all the economic reporting and a rash of central bank policy meetings. The FOMC meeting and policy decision on December 18 will be the center of attention.
The Fed is widely expected to cut the target range for the fed funds rate by another 25 basis points to 4.25-4.50%, so market participants will be keen on seeing the updated Summary of Economic Projections, which will also include estimates for the path of the policy rate, and hearing Fed Chair Powell’s tone in talking about it.
Joining the Fed this week with policy decisions will be the Bank of England, Norges Bank, Riksbank, Bank of Japan, and People’s Bank of China.
—
Originally Posted December 16, 2024 – Stage is set for a big week
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Briefing.com and is being posted with its permission. The views expressed in this material are solely those of the author and/or Briefing.com and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
