Pre-market futures are quiet this morning, but at least they are in positive territory. The Dow is currently +120 points, the Nasdaq +80 and the S&P 500 +15 points. Keep in mind they were double these numbers 24 hours ago, but Thursday slid into the red mid-day, as a result — presumably — of booking yearly profits for many large-cap stocks, including the “Magnificent 7.”
Bond yield spreads remain at their slightly elevated range they’ve basically risen to since the last Fed meeting on December 18th. The 10-year is around +4.54% at this hour, with the 2-year at +4.23%. We’re not quite at spring 2024 highs, but we’re up from the mid-3% on the 10-year we were seeing back in mid-September of last year. The main thing is that these rates remain steady and don’t start climbing prohibitively higher. The 10-year is already north of the Fed funds rate, which was lowered to 4.25-4.50% back in mid-December.
Minutes for that recent Fed meeting come out next week, and the tone of those notes may help inform whether other Fed members other than Chair Jerome Powell are interested in cutting rates more than twice in the present year. In any case, it’s very likely they will not be lowering rates at the January 30-31 meeting — unless employment numbers are drastically worse than expected, perhaps.
Auto Sales Delivery Reports Today
After the open, and even before it — and yesterday, in the case of Tesla (TSLA) — we’ll see December Auto Sales numbers. In fact, Tesla fell -6% Thursday as it missed delivery expectations for the month and for the full year. We know Tesla is more than an auto manufacturer, so perhaps this concern is a bit overplayed, especially as its CEO currently has such a strong position as advisor to President-elect Trump.
EV-maker Rivian (RIVN) reported 14,183 deliveries for the month, bringing its yearly total to 53,179. These figures are pretty much in-line with expectations, and the company made sure to note that its supply chain issues from Q3 have now been resolved. Shares of RIVN are up nearly +6% on the news, but still around -30% from a year ago.
ISM Manufacturing Expected Sub-50% Again
After a very weak period between July and October of last year, ISM Manufacturing PMI for November showed a decent jump up to +48.4%; today, after the bell, this is expected to cool a tad to +48.0% for December. This is still below the +50% level, which separates growth versus contraction. We haven’t been north of 50 on ISM Manufacturing since March of 2024.
What to Expect in the Stock Market Next Week
As we mentioned above, next week is Jobs Week for the market. This begins Tuesday morning after the open with the Job Openings and Labor Turnover Survey (JOLTS) for November, which reached 7.7 million for the previous month. Wednesday brings us private-sector payrolls for December from Automatic Data Processing (ADP) ahead of the bell. Thursday morning, as per usual, we’ll see Weekly Jobless Claims.
Friday’s non-farm payroll report and Household Survey, collectively known as the Employment Situation report, is the Big Kahuna for next week. Job gains have been volatile over the past couple months — +227K in November but only +36K for October — and are currently expected somewhere between those two. Unemployment reached +4.2%, which is pretty steady over the same time period (though up half a point from year-ago numbers).
We reiterate: anything but a large collapse in job gains for the month will more than likely keep the Fed on the sidelines for its late-January monetary policy meeting. This would push the next potential rate cut out to March 20th, with plenty of dats to come in between. Don’t change that channel, folks. Happy Friday!
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