S&P futures are down 0.4% in Thursday premarket trading, easing from earlier lows after Tuesday’s strong holiday-shortened session gains. Asian markets were mostly higher, while European markets are broadly closed today. Treasuries are weaker with a steepening curve, and the 30-year yield at 4.80%, near its highest since April. The dollar index is down 0.1%, with the greenback stronger against the yen and sterling. Gold is up 0.3%, Bitcoin futures are down 3.3%, and WTI crude is up 0.6%.
A quiet session is expected as markets return from the Christmas holiday, with some focus on prospects for a “Santa Rally.” Investors remain optimistic about positive seasonality, consumer resilience, AI-driven tech gains, and deregulation prospects under the incoming administration.
The only major economic release today is weekly initial jobless claims. The Treasury will auction $44B in 7-year notes this afternoon, following successful 2- and 5-year sales earlier this week. No Fedspeak is scheduled this week. Key economic releases next week include Chicago PMI, pending home sales, home prices, final PMIs, and ISM manufacturing.
Corporate News
- KKR-US and Bain Capital: Each offered more than $5B in first-round bids for non-core assets of Japan’s Seven & i Holdings.
- Nippon Steel: Extended the closing period for its $15B purchase of X-US.
- BABA-US (Alibaba): Entering a 50-50 joint venture with South Korea’s E-Mart.
US equities were higher in Tuesday’s holiday-shortened session, with the Dow up 0.91%, S&P 500 gaining 1.10%, Nasdaq rising 1.35%, and Russell 2000 up 1.00%. Stocks closed near session highs, marking their third consecutive day of gains as the market continued to rebound from last week’s sharp selloff. Big tech was the standout, led by TSLA-US, while other outperformers included semiconductors, aluminum, money center banks, asset managers, payment processors, tech hardware, casual diners, and auto parts. Underperformers included media, biotech, pharma, managed care, copper, tobacco, and apparel retail. Treasuries were little changed after Monday’s yield increases, the dollar index rose 0.2%, gold finished up 0.3%, Bitcoin futures surged 5.9% to near $100K, and WTI crude gained 1.2%.
The market remained quiet ahead of the Christmas holiday on Wednesday, with continued hope for a broader Santa Claus rally. Bulls focused on favorable seasonality, a soft-/no-landing macro narrative, LDD% earnings growth, consumer resilience, AI advancements, deregulation, and renewed animal spirits. Thoughts that last week’s hawkish Fed reaction was overdone also supported sentiment. China stimulus was in the headlines, with reports that Beijing is targeting a record CNY3T special treasury bond issuance for 2025.
The Richmond Fed manufacturing index aligned with expectations at -10, improving from -14 in November. Metrics for business conditions, future shipments, and new orders were higher month-over-month. The prices paid index rose while prices received decreased, with firms expecting increases in both over the next year. The Treasury auctioned $70B in five-year notes. Markets will be closed on Wednesday for Christmas, with initial jobless claims and trade balance data set for Thursday and Friday, respectively. Next week will feature key releases including Chicago PMI, pending home sales, home prices, final PMIs, and ISM manufacturing.
Company-Specific News by GICS Sector
Materials
- X-US (United States Steel): Remains in focus as a government review board deadlocked on the proposed acquisition by Nippon Steel. The decision now moves to President Biden, who has expressed opposition to the transaction.
- ALTM-US (Arcadium Lithium): Gained 5.8% after shareholders approved the proposed Rio Tinto transaction. Clearance has been granted in multiple countries, with the deal expected to close in mid-2025.
Industrials
- INSW-US (International Seaways): Rose 9.3% following the announcement it will be added to the S&P Small Cap 600 on 30-Dec-24.
- BLDR-US (Builders FirstSource): Announced plans to acquire Alpine Lumber, with the deal expected to close in early Q1 2025 and be accretive to EPS that year.
- BKD-US (Brookdale Senior Living): Announced a refinancing deal to address a significant portion of its 2027 debt maturities.
Consumer Discretionary
- EAT-US (Brinker International): Up 3.1% after being upgraded to buy from hold at Argus. Analysts cited improving sales, traffic growth, streamlined menu offerings, price increases, and staffing investments.
Eco Data Releases | Thursday December 26th, 2024
S&P 500 Constituent Earnings Announcements | Thursday December 26th, 2024
Data sourced from FactSet Research Systems Inc.
