OPENING CALL
Stock futures slipped Monday, suggesting major indexes could come under fresh pressure after ending last week on a downbeat note.
Concerns about sticky inflation and uncertainty surrounding Donald Trump's policy agenda were still in the driver's seat for markets.
"Expectations that the Federal Reserve will have little room to trim rates in 2025 amid a strong economy, sticky inflation and price-boosting polices by Trump have stymied the Fed's hope to slash borrowing costs from decades highs," XM said.
Stocks to Watch
Boeing fell more than 4% premarket: The plane involved in the South Korean crash that killed 179 people was a Boeing 737-800, a workhorse of commercial air travel.
Nvidia, Broadcom: Chipmakers looked poised for further losses after falling Friday. Nvidia and Broadcom each lost more than 1% premarket. Shares in Intel and Advanced Micro Devices also ticked lower.
Tesla fell more than 2% premarket, on pace for a third straight loss. Tesla's stock fell nearly 7% in the final two sessions of last week.
Watch For:
Chicago PMI for December; Pending Home Sales for November
Today's Headlines/Must Reads:
-Credit Spreads Haven't Looked This Good Since the 2000s. Can They Get Better?
-A Record-Shattering $1 Trillion Poured Into ETFs This Year
-Drug Middlemen Spared by Trump and Musk, for Now
MARKET WRAPS
Forex:
After strong gains throughout the latter half of the year, the dollar looks set to end 2024 close to a two-year high against a basket of currencies.
The currency has risen sharply due to a strong U.S. economy and expectations that further interest-rate cuts by the Federal Reserve will be limited and in recent days, it has performed well despite weak U.S. durable goods and housing data last week, Forex Analytix said.
Pepperstone said for now, the postelection boost has faded and bitcoin has settled into a trading range of $92,000-$100,000, but a close below $92,000 would open up scope for deeper falls toward $81,000.
Energy:
Oil prices slipped in thin trading but remain up around 1.5% on week, after a larger-than-expected drop in U.S. oil inventories.
Friday's EIA report showed crude oil stocks dropped 4.2 million barrels, against estimates of 700,000 barrels. The report fueled optimism in the market and strengthened prices, keeping WTI over the key $70 a barrel mark, XS.com said.
Profit-taking and portfolio rebalancing have capped oil's gains but not prevented it from holding at higher levels.
Metals:
Gold has traded in a narrow range over the week to date, as investors await fresh catalysts in 2025.
In focus is the Fed's approach to loosening monetary policy, as well as Donald Trump's proposed policies. The market is pricing in fewer U.S. interest-rate cuts in 2025 on hawkish Fed comments and Trump's expected policies, which are inflationary in nature.
Simmering geopolitical tensions are keeping a floor under gold prices, and the dollar is broadly flat, limiting bullion's potential losses, market watchers said.
DBS said volatility will reign for commodities in the short term amid China's lackluster stimulus and tariff woes from Donald Trump's re-election, but keeps its 12-month gold target price at $2,835/oz.
Lithium-battery prices have likely hit a trough and could rise modestly in 2025, Citi said.
An increasing number of industry participants "have turned less bearish compared with three months ago," Citi said after attending an industry event.
TODAY'S TOP HEADLINES
Nvidia Stock Stalls. This Could Spark the Next Rally.
Nvidia stock fell in early Monday trading as investors looked ahead for clues about the chip maker's next launch.
Shares were down 1% to $135.62 in premarket trading. They fell 2.1% Friday.
BlackRock Cuts Back on Board Diversity Push in Proxy-Vote Guidelines
BlackRock has toned down the language in guidance it gives companies on the racial and gender diversity it seeks on their boards in the U.S.
The framework, published earlier this month by BlackRock in its annual report on proxy-voting guidelines for 2025, is closely tracked by companies, other large shareholders, and corporate governance experts.
Trump Asks Supreme Court to Pause TikTok Shutdown
President-elect Donald Trump on Friday asked the Supreme Court to stop a federal law banning TikTok from taking effect next month, saying he wants to pursue a negotiated resolution to prevent a nationwide shutdown of the social-media giant.
In a brief filed to the court, Trump said keeping TikTok operating would preserve the First Amendment rights of tens of millions of Americans.
The Fed's 5-Year Policy Review Takes Place Next Year. What to Expect.
Federal Reserve policymakers will have more to consider in 2025 than whether to move interest rates in response to their inflation and employment goals. The central bank will also conduct a review of its monetary policy strategy and tools, as it does every five years.
The previous framework update came in 2020, in the midst of the Covid-19 pandemic and after more than a decade of consistently low inflation and interest rates set just above zero. Today, the U.S. economy is coming out of its most inflationary period since the 1970s and interest rates are well above the so-called zero lower bound.
Buybacks Aren't Always Bullish. Here's How to Know When They Are Worth It.
Wall Street has become used to cheering when companies announce a stock buyback program.
The veteran stock researcher Bradley Safalow thinks we should be more mindful. The companies with the largest buyback programs within the S&P 500 have underperformed the market over the past decade, he reports in a recent note to subscribers of his PAA Research.
Trump's Return Sparks Hope for 2025 Deals Revival
Wall Street is optimistic that a buoyant stock market, declining interest rates and Donald Trump's lighter-regulation agenda will prompt a dealmaking rebound in 2025. But jitters remain thanks to the president-elect's unpredictability.
Deal volume has been muted for the past few years following record volumes coming out of the pandemic. While total global deal volume is up roughly 12% in 2024 through Dec. 26 compared with the same period in 2023, the number of transactions is lower and volume remains well below the 2021 high, according to Dealogic data.
China Has Limited Firepower to Counter U.S. Tariffs
SINGAPORE-In the weeks since the election, China has flaunted the ways in which it could hit back at the U.S. in the event of a new trade war with the U.S., including everything from choking off the metals needed for everyday products to punishing American companies that do business in China.
But using such tools too aggressively risks backfiring on Beijing.
Azerbaijan Accuses Russia of Coverup in Kazakhstan Plane Crash
Azerbaijan's president accused Russia of trying to cover up its role in a plane crash that killed 38 people, delivering a harsh condemnation that signaled a reversal of the power dynamics that long saw Moscow hold sway over its former Soviet republics.
President Ilham Aliyev said Sunday that Azerbaijan had laid out for the Kremlin the necessary conditions to satisfy the country, demanding that Russia take responsibility for causing the crash, provide compensation for the country and victims' families, and bring those guilty of downing the plane to justice.
Fear That China Rules the Waves Jolts U.S. to Pursue Maritime Revival
Rising tensions with China are prompting Washington to revisit America's roots as a trading nation of the seas.
Protecting merchant sailors and their cargo was what compelled Congress to commission the U.S. Navy's first new warships. That was in 1794, targeting North African Barbary pirates. The young republic's seaborne traders, a linchpin of economic growth, were vital to national security.
Some Justice Department Lawyers Look for Protection-and the Exits
WASHINGTON-Justice Department lawyers who have angered President-elect Donald Trump and his allies are facing tough decisions about whether to stay in government-and how to best protect themselves from threats of retribution after Inauguration Day.
Dozens of prosecutors and agents have worked on cases that potentially make them vulnerable, such as special counsel investigations of Trump, prosecutions of hundreds of his supporters who stormed the Capitol on Jan. 6, 2021, and contempt-of-Congress cases that sent top Trump associates Steve Bannon and Peter Navarro to prison this year.
Write to paul.larkins@dowjones.com TODAY IN CANADA
Earnings:
None scheduled
Economic Calendar [ET]:
Nothing major scheduled
Expected Major Events for Monday
00:30/JPN: Dec Japan Manufacturing PMI
09:30/UK: Nov Capital issuance statistics
14:45/US: Dec Chicago Business Barometer - ISM-Chicago Business Survey - Chicago PMI
15:00/US: Nov Pending Home Sales Index
15:30/US: Dec Texas Manufacturing Outlook Survey
All times in GMT. Powered by Kantar Media and Dow Jones.
Expected Earnings for Monday
AMTD Digital Inc - ADR $(HKD)$ is expected to report for Interim.
B. Riley Financial Inc $(RILY)$ is expected to report for 3Q.
CEL-SCI Corp (CVM) is expected to report for 4Q.
CareMax Inc $(CMAXQ)$ is expected to report for 3Q.
Digital Ally Inc (DGLY) is expected to report for 3Q.
Enservco Corp (ENSV) is expected to report $0.04 for 3Q.
Gritstone bio Inc $(GRTSQ)$ is expected to report $-0.66 for 3Q.
InnSuites Hospitality Trust (IHT) is expected to report for 3Q.
JW Mays Inc $(MAYS)$ is expected to report for 1Q.
LL Flooring Holdings Inc $(LLFLQ)$ is expected to report $0.09 for 3Q.
Mega Uranium Ltd (MGA.T) is expected to report for 4Q.
Mesa Air Group Inc $(MESA)$ is expected to report $0.22 for 4Q.
NexPoint Diversified Real Estate Trust $(NXDT)$ is expected to report for 3Q.
Remark Holdings Inc (MARK) is expected to report $-0.19 for 3Q.
Smart Share Global Ltd - ADR (EM) is expected to report for 3Q.
(MORE TO FOLLOW) Dow Jones Newswires
December 30, 2024 05:43 ET (10:43 GMT)
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