Good morning. I'm Caitlin McCabe, here to bring you up to speed ahead of a busy week for markets.
The bitcoin juggernaut continues, with the cryptocurrency hitting new highs above $106,000 over the weekend. At the same time, investors are contending with new signs of global economic weakness, including an unexpectedly sharp slowdown in Chinese retail-sales growth, and weak survey data in the two largest eurozone economies, France and Germany.
In the U.S., futures pointed to small early gains for stocks.
Follow our live coverage throughout the day for the latest news affecting markets.
This week's main event is likely to be the Federal Reserve's interest-rate decision Wednesday, where a quarter-percentage-point cut seems assured. Further down, our Nick Timiraos details the thorny decision Fed officials face over whether to continue cutting next year.
Live Markets Snapshot Data refreshes every time you open this email. CONTENT FROM: Goldman Sachs Global GDP growth is expected to remain strong despite trade uncertainty
Goldman Sachs Research expects worldwide GDP to expand 2.7% in 2025. Factors driving the growth include rebalanced labor markets, slowing inflation, and normalizing interest rates. Read the 2025 Global Macro Outlook from Goldman Sachs Research.
Read more.
Stocks to Watch
MicroStrategy and Palantir Technologies: The software company turned crypto-buying machine and the big-data company will join the Nasdaq-100 index next week, as part of the index's reconstitution. Shares of both companies rose in premarket trading, with MicroStrategy getting an additional boost from a renewed rally in bitcoin.
Super Micro Computer: The AI server company, whose stock tanked when its auditor resigned this fall, will drop out of the Nasdaq-100. Shares fell more than 10% before the bell.
Coinbase and Marathon Digital: Other crypto-linked stocks also rose premarket, as did shares of online brokerage Robinhood Markets.
Vivendi: Shares of the entertainment company surged around one-third in Paris. Three companies Vivendi spun off started trading Monday: television studio Canal+ in London, advertising company Havas in Amsterdam and publisher Louis Hachette in Paris.
Berkshire Hills Bancorp and Brookline Bancorp: The Boston-based regional banks are in talks to merge, The Wall Street Journal reported.
Companies due to post earnings this week include memory-chip maker Micron Technology on Wednesday and Fedex and Nike on Thursday.
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The Fed's Game Plan on Interest-Rate Cuts Keeps Shifting
By Nick Timiraos
Federal Reserve Chair Jerome Powell had to reassure some skeptical colleagues that the central bank wouldn't inadvertently send signals of distress when he led them to start lowering borrowing costs at the end of the summer with a gutsy, larger-than-usual half-point reduction.
Now, they are confronting another potential hinge point. Officials lowered their benchmark rate again in November, by a quarter point. Investors widely expect a third consecutive rate cut this week.
Powell is trying to find the right gear amid signs the labor market is less wobbly and inflation is a touch firmer than they appeared in September. He faces misgivings from some colleagues over continuing to cut and less conviction from others who strongly backed those first two moves. One option this week would be to cut by a quarter point, then use new economic projections to strongly hint that the central bank is ready to go more slowly on the reductions.
"Right now, either a cut or a hold could be justified," said Jon Faust, who served as a senior adviser to Powell from 2018 until earlier this year. What officials say about the path of the fed-funds rate is likely to be "more important than whatever they decide about the December meeting in particular."
Keep reading . Charting the Markets
A spate of deadly attacks in China in recent weeks-including mass stabbings and car-ramming incidents-has raised concerns that stagnating growth and played a role in fueling unrest and even outbursts of violence, amid an increase in public protests over economic grievances.
Managing money for the rich is today's golden goose in banking, because it generates stable fees and has low capital requirements. But the U.S. is a difficult market for outsiders to penetrate . Top banks have a 48% market share, compared with a 32% world average.
The number of global corporate defaults this year is on track to close this year below 2023's levels, except for in one region: Europe. The continent is on pace for the second-worst year for corporate defaults since 2008-trailing only 2020, when companies were pummeled by Covid-19.
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Bitcoin is newly ascendant in Washington and a $2 trillion asset. Yet some on Wall Street still aren't convinced of its value. The Journal checked in on five of the world's biggest investors to see how-or if-their opinions have evolved.
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About Us
We want to be the first place you go to get ready for the opening bell every day. This newsletter was written by Caitlin McCabe ( @ mccabe_caitlin ) in London.
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
December 16, 2024 06:37 ET (11:37 GMT)
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