March S&P 500 E-Mini futures (ESH26) are trending down -0.12% this morning as caution prevails ahead of the release of U.S. jobs data that could offer clues on the timing of the Federal Reserve’s next interest rate cut.
Lower bond yields today are limiting losses in S&P 500 futures. The 10-year T-note yield fell three basis points to 4.14%.
Oil prices fell on Wednesday after U.S. President Donald Trump said Venezuela’s interim authorities would turn over 30 million to 50 million barrels of crude to the U.S., a move seen as adding to an already oversupplied oil market. President Trump said in a Truth Social post that he has directed Energy Secretary Chris Wright to immediately carry out his plan for shipping the oil directly to U.S. docks.
In yesterday’s trading session, Wall Street’s major indexes closed higher, with the S&P 500 and Dow notching record highs. Shares of data storage companies rallied, with Sandisk (SNDK) jumping over +27% to lead gainers in the S&P 500 and Western Digital (WDC) climbing more than +16% to lead gainers in the Nasdaq 100. Also, most chip stocks advanced, led by a more than +11% surge in Microchip Technology (MCHP) after it raised its Q3 revenue guidance. In addition, OneStream (OS) soared over +28% after buyout firm Hg Capital agreed to acquire the company for about $6.4 billion in cash. On the bearish side, American International Group (AIG) slumped more than -7% and was the top percentage loser on the S&P 500 after announcing that CEO Peter Zaffino will retire by mid-year and be succeeded by Aon Plc.’s Eric Andersen.
Economic data released on Tuesday showed that the U.S. December S&P Global services PMI was revised downward to 52.5 from the preliminary reading of 52.9.
Richmond Fed President Tom Barkin said on Tuesday that the outlook for monetary policy remains in a “delicate balance” amid the conflicting pressures from rising unemployment and still-elevated inflation. Barkin added that interest rates are now within the range of estimates for the so-called neutral rate following last year’s policy easing. At the same time, Fed Governor Stephen Miran said the central bank will need to lower interest rates by more than a percentage point this year, arguing that monetary policy is “holding the economy back.”
Meanwhile, U.S. rate futures have priced in an 83.9% chance of no rate change and a 16.1% chance of a 25 basis point rate cut at the January FOMC meeting.
Today, all eyes are on the U.S. ADP private payrolls report, which is set to be released in a couple of hours. Economists, on average, forecast that the December ADP Nonfarm Employment Change will stand at 49K, compared to the November figure of -32K.
The U.S. JOLTs Job Openings figures will also be closely monitored today. Economists anticipate that the November JOLTs Job Openings will arrive at 7.610 million, compared to the October figure of 7.670 million.
The U.S. ISM Non-Manufacturing PMI will come in today. Economists expect the December ISM services index to be 52.2, compared to the previous value of 52.6.
U.S. Factory Orders data for October will be released today. The report was originally scheduled for release on December 5th, but was delayed due to the fallout from the government shutdown. Economists expect this figure to drop -1.1% m/m in October, following a +0.2% m/m rise in September.
The EIA’s weekly crude oil inventories report will be released today as well. Economists expect this figure to be -1.2 million barrels, compared to last week’s value of -1.9 million barrels.
In addition, market participants will be anticipating a speech from Fed Vice Chair for Supervision Michelle Bowman.
On the earnings front, Corona beer maker Constellation Brands (STZ), investment bank Jefferies Financial (JEF), and data center operator Applied Digital (APLD) are set to report their quarterly figures today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.141%, down -0.93%.
The Euro Stoxx 50 Index is down -0.12% this morning, taking a breather after a series of record closes. Energy stocks fell on Wednesday, tracking a slide in oil prices after U.S. President Donald Trump said Venezuela would turn over as many as 50 million barrels of crude to the U.S. Luxury stocks also slid as escalating tensions between China and Japan dampened hopes for a sustained rebound in sector sales growth. Limiting losses, construction and utility stocks advanced. Investors digested a slew of economic data from the region on Wednesday. Preliminary data from Eurostat showed that the Eurozone’s annual inflation rate fell to the European Central Bank’s target in December, reinforcing expectations that monetary policy will remain stable in the near term. Separately, data showed that Germany’s unemployment rate remained unchanged in December, though the number of jobless edged higher, pointing to an economy that continues to lack momentum. Investor attention now shifts to U.S. labor market data, with the JOLTs report and ADP private payrolls figures on deck. In corporate news, Pluxee N.V. (PLX.FP) rose about +0.7% after the French voucher and benefits company reported 9% organic growth in FQ1 sales.
Germany’s Retail Sales, Germany’s Unemployment Change, Germany’s Unemployment Rate, Italy’s CPI (preliminary), Eurozone’s CPI (preliminary), and Eurozone’s Core CPI (preliminary) data were released today.
The German November Retail Sales unexpectedly fell -0.6% m/m, weaker than expectations of +0.2% m/m.
The German December Unemployment Change stood at 3K, stronger than expectations of 5K.
The German December Unemployment Rate was 6.3%, in line with expectations.
The Italian December CPI rose +0.2% m/m and +1.2% y/y, compared to expectations of +0.2% m/m and +1.1% y/y.
Eurozone’s December CPI rose +2.0% y/y, in line with expectations.
Eurozone’s December Core CPI rose +2.3% y/y, weaker than expectations of +2.4% y/y.
Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed up +0.05%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -1.06%.
China’s Shanghai Composite Index closed slightly higher today, buoyed by stronger trading volumes. Onshore turnover has increased since the start of the New Year, hitting 2.8 trillion yuan ($404.79 billion) on Wednesday, the highest since September, suggesting the equity rally still has room to run. Also aiding sentiment, China’s central bank said on Tuesday it will lower the reserve requirement ratio and interest rates in 2026 to keep liquidity ample and continue to implement an appropriately loose monetary policy. Semiconductor stocks outperformed on Wednesday. The gains were partly driven by a note from UOB Kay Hian analysts saying Nvidia’s H200 chips are unlikely to dent demand for Chinese AI chips in the near term. Meanwhile, Goldman Sachs analysts expect the MSCI China Index and the CSI 300 Index to gain 20% and 12%, respectively, in 2026, driven “almost entirely” by earnings growth. Profit growth will be “supported by AI, ‘Going Global,’ and anti-involution policy,” strategists, including Kinger Lau, wrote in a note. In other news, a regulatory filing showed on Wednesday that China’s leading AI server provider, xFusion, hired Citic Securities to help prepare for an initial public offering. Investors are awaiting China’s December inflation data, scheduled for release on Friday, which will provide insight into the strength of domestic demand.
Japan’s Nikkei 225 Stock Index closed lower today as investors took profits following a rally that took the benchmark to a record high in the previous session. Energy and utility stocks led the declines on Wednesday. Investors also assessed the impact of China’s ban on exports of dual-use items to the country. Dual-use items are goods, software, or technologies with both civilian and military applications, including certain rare earth elements that are crucial for producing drones and chips. The move marked the latest flare-up in diplomatic tensions between the two Asian nations over a dispute related to Taiwan. “China’s export ban was a negative cue, but overall, investors sold stocks as the market rose sharply in the past two sessions,” said Naoki Fujiwara, senior fund manager at Shinkin Asset Management. On the economic front, a private-sector survey released on Wednesday showed that Japan’s service sector grew at its slowest pace since May in December, as weaker overall demand offset a rebound in new export business. In corporate news, Hisamitsu Pharmaceutical jumped over +19% after saying it expects to be taken private in a management buyout valuing the company at about 457 billion yen ($2.9 billion). Investor focus now turns to Japan’s wage data for November, scheduled for release on Thursday. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +16.42% to 30.99.
The Japanese December au Jibun Bank Services PMI was revised downward to 51.6 from the preliminary reading of 52.5.
Pre-Market U.S. Stock Movers
AST SpaceMobile (ASTS) slumped more than -6% in pre-market trading after Scotiabank downgraded the stock to Underperform from Sector Perform with a $45.60 price target.
Deckers Outdoor (DECK) slid over -3% in pre-market trading after Piper Sandler and Baird downgraded the stock.
Humana (HUM) fell more than -1% in pre-market trading after Wells Fargo downgraded the stock to Equal Weight from Overweight.
Ventyx Biosciences (VTYX) soared over +67% in pre-market trading after The Wall Street Journal reported that Eli Lilly was in advanced talks to acquire the company for more than $1 billion.
Mobileye Global (MBLY) surged more than +11% in pre-market trading after announcing it will acquire AI robotics start-up Mentee Robotics for $900 million in cash and stock.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - January 7th
Constellation Brands (STZ), Jefferies Financial (JEF), Albertsons (ACI), Applied Digital (APLD), MSC Industrial Direct (MSM), PriceSmart (PSMT), Cal-Maine (CALM), Unifirst (UNF), AZZ (AZZ), Apogee (APOG), Kura Sushi (KRUS), Saratoga Investment Corp (SAR), Franklin Covey (FC), Resources Connection (RGP).
On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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