S&P futures are down 0.3% in Friday morning trading following a mixed Thursday session where small caps outperformed while big tech lagged. Stocks remain on track for strong weekly gains after last week’s selloff. Asian markets mostly rose overnight, with Japan up nearly 2%, while South Korea declined. European markets are higher, up over 0.5%. Treasuries are weaker with curve steepening. The dollar index is flat, gold is down 0.4%, Bitcoin futures are up 1%, and WTI crude has risen 0.8%.
The pullback follows earlier weekly gains fueled by views that hawkish Fed concerns were overdone. Rising rates continue to weigh on sentiment. Overseas, China reported a sharp drop in industrial profits, Tokyo inflation accelerated for a second month, and South Korea faced another presidential impeachment. Business uncertainty around Trump tariffs and potential inflation impacts remain in focus.
Wholesale inventories are due today. Next week’s key releases include Chicago PMI, pending home sales, home prices, final manufacturing PMI, initial claims, and the ISM manufacturing index. The week of 6-Jan will be busier, featuring ISM services, JOLTS job openings, ADP payrolls, FOMC minutes, nonfarm payrolls, and Michigan sentiment, along with major bond auctions
US equities closed mixed in quiet Thursday trading, with the Dow up 0.07%, S&P 500 down 0.04%, Nasdaq down 0.05%, and Russell 2000 up 0.90%. Small caps outperformed, while big tech mostly declined. Managed care, retail, A&D, casual diners, regional banks, REITs, and life insurers led the gains. Energy, ag chemicals, hospitals, housing-related retail, utilities, and cruise lines lagged. Treasuries were mixed with a touch of curve steepening, and the 30-year yield briefly surpassed 4.80% before retreating. The dollar index fell 0.1%, while gold rose 0.7%, Bitcoin futures dropped 3.8%, and WTI crude fell 0.7%, reversing earlier gains.
The session was largely uneventful as the market approached year-end. Bulls focused on positive seasonality, the no-/soft-landing narrative, AI-driven optimism, and consumer resilience. Weekly initial jobless claims came in at 219K, below expectations, but continuing claims rose to 1.91M, the highest since November 2021. A $44B Treasury auction of 7-year notes was well-received, following earlier auctions for 2- and 5-year notes.
Corporate News by GICS Sector
Consumer Discretionary
- NSANY-US (Nissan Motor) +15.9%: Announced official merger talks with HMC-US (Honda Motor).
Financials
- KKR-US and Bain Capital: Submitted first-round bids exceeding $5B each for non-core assets of Japan’s Seven & i Holdings.
Materials
- Nippon Steel: Extended the closing period for its $15B acquisition of X-US (United States Steel).
Consumer Staples
- BABA-US (Alibaba): Partnering with South Korea’s E-Mart to form a 50-50 joint venture.
Overnight Market Synopsis
Asian markets are poised for a positive start on Friday. Nikkei futures are up 0.53%, while Hang Seng and ASX trade flat after public holidays. S&P 500 futures were little changed after Thursday’s quiet session. Tokyo’s core inflation rose to its highest level since August, driven by the phase-out of power subsidies. BOJ Governor Ueda reiterated rate hikes are possible but timing remains uncertain, with a focus on wage talks and US policy. South Korea saw its business confidence drop to its lowest level since 2020 amid martial law and economic concerns. Crude remained steady, gold traded near a one-week high, and Bitcoin pulled back from $100K.
Eco Data Releases | Friday December 27th, 2024
S&P 500 Constituent Earnings Announcements | Friday December 27th, 2024
Data sourced from FactSet Research Systems Inc.
