The S&P 500 futures are down 40 points and are trading 0.8% below fair value, the Nasdaq 100 futures are down 202 points and are trading 1.2% below fair value, and the Dow Jones Industrial Average futures are down 240 points and are trading 0.6% below fair value.
Stock futures indicate a lower open on the first session of the new year following big gains for the market in 2023. A loss in Apple (AAPL) has contributed to the negative bias after the stock was downgraded to Underweight from Equal Weight at Barclays. Rising rates are another factor driving the downbeat price action.Â
The 2-yr note yield is up seven basis points to 4.32% and the 10-yr note yield is up seven basis points to 3.95%.
Geopolitical worries are also in play after Iran sent a warship to the Red Sea after the U.S. destroyed three Houthi boats, according to Bloomberg. Also, Israel Prime Minister Benjamin Netanyahu has rejected international pressure to stop the war, saying the war will continue until "absolute victory," which will take "many more months," according to The New York Times.
WTI crude oil futures are up 2.2% to $73.17/bbl, likely tied to the geopolitical angst.Â
Manufacturing PMI readings from Germany, France, U.K., Spain, and Italy remained in contractionary territory, but they were a bit better than expected. China's Caixin PMI expanded to 50.8 in December, exceeding the forecast of 50.4.
Today's U.S. economic data includes the final December S&P Global U.S. Manufacturing PMI at 9:45 ET and the November Construction Spending report at 10:00 ET.
In corporate news:
Apple (AAPL 188.87, -3.66, -1.9%): downgraded to Underweight from Equal Weight at Barclays, citing weakness in iPhone sales volume among other factors;Â Key antitrust decisions await Apple (AAPL) this year, according to FT
Uber (UBER 61.09, -0.48, -0.8%): reiterated as a top pick at Wells Fargo
Tesla (TSLA 246.11, -2.37, -1.0%): DOE updates EV models that qualify for $7500 tax credit
ASML
NVIDIA
Estee Lauder (EL 143.50, -2.75, -1.9%): downgraded to Hold from Buy at Deutsche Bank
Baidu (BIDU 117.19, -1.90, -1.6%): bid to acquire Joyy (YY) China live streaming business has lapsed, according to Bloomberg
Reviewing overnight developments:
Equity indices in the Asia-Pacific region ended Tuesday on a mixed note while markets in New Zealand and Japan were closed with Japan's Nikkei scheduled to remain closed on Wednesday. Japan's Nikkei: -0.2%, Hong Kong's Hang Seng: -1.5%, China's Shanghai Composite: -0.4%, India's Sensex: -0.5%, South Korea's Kospi: +0.6%, Australia's ASX All Ordinaries: +0.5%.
In economic data:
China's December Caixin Manufacturing PMI 50.8 (expected 50.4; last 50.7). December Manufacturing PMI 49.0 (expected 49.5; last 49.4) and Non-Manufacturing PMI 50.4 (expected 50.5; last 50.2)
South Korea's December S&P Manufacturing PMI 49.9 (last 50.0). December trade surplus $4.48 bln (expected surplus of $6.26 bln; last surplus of $3.78 bln). December Imports -10.8% yr/yr (expected -11.4%; last -11.6%) and Exports 5.1% yr/yr (expected 6.6%; last 7.7%)
Singapore's Q4 GDP 1.7% qtr/qtr (last 1.3%); 2.8% yr/yr (last 1.0%). Q4 URA Property Index 2.7% qtr/qtr (last 0.8%)
Australia's December Judo Bank Manufacturing PMI 47.6 (expected 47.8; last 47.7) and December Commodity Prices -10.7% yr/yr (last -12.8%)
In news:
Xinhua reported that domestic travel in China was up more than 150% yr/yr during the New Year's weekend.
Japan was hit by a big earthquake on Monday with reports pointing to at least 48 casualties.
South Korea's President Yoon said that the domestic equity market is undervalued.
Australia's Manufacturing PMI indicated contraction in the manufacturing sector for the tenth consecutive month while China's Caixin Manufacturing PMI expanded for the second month in a row. However, the official Manufacturing PMI, which was released on Saturday night, pointed to the third consecutive month of decreasing activity.
Major European indices trade on a mostly lower note while Spain's IBEX (+0.6%) outperforms with bank stocks contributing to the relative strength. STOXX Europe 600: -0.2%, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.4%, Italy's FTSE MIB: +0.4%, Spain's IBEX 35: +0.6%.
In economic data:
Eurozone's December Manufacturing PMI 44.4 (expected 44.2; last 44.2) and November M3 Money Supply -0.9% yr/yr (expected -1.0%; last -1.0%). November Private Sector Loans 0.5% yr/yr (expected 0.8%; last 0.6%) and loans to nonfinancials 0.0% yr/yr (last -0.3%)
U.K.'s December Manufacturing PMI 46.2 (expected 46.4; last 47.2)
Germany's December Manufacturing PMI 43.3 (expected 43.1; last 42.6)
France's December Manufacturing PMI 42.1 (expected 42.0; last 42.9)
Italy's December Manufacturing PMI 45.3 (expected 44.4; last 44.4)
Spain's December Manufacturing PMI 46.2 (expected 47.0; last 46.3)
In news:
European Central Bank policymaker De Cos repeated that the timing of rate cuts will depend on data.
Manufacturing PMI readings from Germany, France, U.K., Spain, and Italy remained in contractionary territory, but they were a bit better than expected.
The dollar is continuing last week's rebound against the euro and Sterling.
Â
U.S. equity futures:
S&P 500 Futures -40 @ 4,779
DJIA Futures: -240 @ 37,772
Nasdaq 100 Futures: -202Â @ 16,820
Overseas:
Europe:Â DAX -0.2%, FTSE -0.2%, CAC -0.4%
Asia:Â Nikkei closed, Hang Seng -1.5%, Shanghai Composite -0.4%
Commodities:
Crude Oil +1.40Â @ 73.05
Nat Gas +0.114 @ 2.441
Gold +4.90 @ 2076.70
Silver +0.054 @ 24.140
Copper -0.0140 @ 3.8765
Earnings/Guidance:
ASML (
IMEDX (
Nokia (
News:
Israel Prime Minister Benjamin Netanyahu rejected international pressure to stop war and said war will continue until "absolute victory" which will take "many more months," according to New York Times
Iran sends warship to Red Sea after US destroyed three Houthi boats, according to Bloomberg
Chinese President Xi says economy will get stronger in 2024 (FXI), according to Bloomberg
DOE updates EV models that qualify for $7500 tax credit
Office building owners will face $117 bln in debt repayments this year, according to FT
Macau Gaming Inspection and Coordination Bureau reported December gross revs +433% yr/yr to HKD 18.57 bln versus -56.3% in December of 2023
USGS reported 7.6 magnitude earthquake 4 miles from Suzu, Ishikawa, Japan on Monday; tsunami warning was issued; over 40 deaths reported
Alibaba (
ASML (
AstraZeneca (
Blackrock (
Bristol-Myers (
Corcept Therapeutics (
ImmunityBio (
Li Auto (
Moderna (
NIO (
Northwest Natural (
Richtech Robotics (
SkyWater Technology (
Verona Pharma (
Voyager Therapeutics (
XPeng (
M&A:
Agnico-Eagle Mines (
Baidu's (
Cal-Maine Foods (
Camping World (
Danone (
Ensign Group (
Mannkind (
PNM Resources (
Primo Water (
Rover Group's (
SomaLogic (
Syndicate:
American Battery Technology Co. (
Aurora Innovation (
BioLineRx (
Helix Energy (
Holley Inc. (
MeridianLink (
Precigen (
IPOs:
No IPOs expected to price.
Gapping Up/Down
Gapping up:Â LBPH +10.4%, PGEN +6.7%, ADEX +3.2%, GOGL +2.9%, FREY +2.1%, AEM +1.7%, VRNA +1.5%, BLRX +1.3%, PRMW +1.3%, MXCT +1.1%
Gapping down:Â CORT -31.4%, YY -11.4%, MDXG -6.5%, LI -5.1%, LXRX -4.6%, PNM -3.9%, NIO -2.8%, XPEV -2.8%, ASML -2.6%, RPTX -2.1%, VFS -1.9%, BIDU -1.8%, IBRX -1.6%, NOK -1.5%, TSLA -0.9%, HLX -0.8%
Analyst Research (see Upgrades/Downgrades calendar for full list):
Upgrades
Acadia Realty Trust (AKR) upgraded to Buy from Hold at Jefferies; tgt raised to $20
Alpha and Omega Semi (AOSL) upgraded to Buy from Neutral at B. Riley Securities; tgt raised to $34
Booking Holdings (BKNG) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $3459
Boston Properties (BXP) upgraded to Buy from Hold at Jefferies; tgt raised to $80
Brady (BRC) upgraded to Buy from Underperform at BofA Securities; tgt raised to $65
Centene (CNC) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $90
Douglas Emmett (DEI) upgraded to Hold from Underperform at Jefferies; tgt raised to $15
Equinix (EQIX) upgraded to Peer Perform from Underperform at Wolfe Research
Evergy (EVRG) upgraded to Overweight from Equal Weight at Barclays; tgt raised to $56
Exact Sciences (EXAS) upgraded to Buy from Hold at The Benchmark Company; tgt $91
Expedia Group (EXPE) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $159
Huntington Banc (HBAN) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $15
Downgrades:
Apple (AAPL) downgraded to Underweight from Equal Weight at Barclays; tgt lowered to $160
AvalonBay (AVB) downgraded to Peer Perform from Outperform at Wolfe Research
AvidXchange (AVDX) downgraded to Neutral from Overweight at Piper Sandler; tgt raised to $13
Avery Dennison (AVY) downgraded to Underperform from Buy at BofA Securities; tgt $208
Ball Corp (BALL) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $59
BlackLine (BL) downgraded to Underweight from Neutral at Piper Sandler; tgt raised to $60
Brunswick (BC) downgraded to Neutral from Buy at B. Riley Securities; tgt $106
Choice Hotels (CHH) downgraded to Underperform from Hold at Jefferies; tgt lowered to $96
Citizens Financial Group (CFG) downgraded to Equal Weight from Overweight at Barclays; tgt raised to $40
Estee Lauder (EL) downgraded to Hold from Buy at Deutsche Bank; tgt $146
GoodRx (GDRX) downgraded to Underperform from Buy at BofA Securities; tgt lowered to $4.50
Hasbro (HAS) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $53
ProFrac Holding (ACDC) downgraded to Neutral from Buy at Seaport Research Partners
Others:
American Intl (AIG) removed from Conviction Buy List at Goldman
Bath & Body Works (BBWI) removed from Conviction Buy List at Goldman
Boeing (BA) removed from Conviction Buy List at Goldman
Shift4 Payments (FOUR) removed from Conviction Buy List at Goldman
Econ Data:
09:45 ET: December S&P Global US Manufacturing PMI - Final (Prior 49.4)
10:00 ET: November Construction Spending (Briefing.com consensus 0.6%; Prior 0.6%)
Earnings:
Monday (Jan 1)
Markets closed for New Year's Day
Tuesday (Jan 2)
Morning: None
Afternoon:Â Â None
Wednesday (Jan 3)
Morning:Â UNF
Afternoon: CALM, RGP, SLP
Thursday (Jan 4)
Morning: CAG, LW, LNN, RDUS, RPM, SMPL, WBA
Afternoon: None
Friday (Jan 5)
Morning: ANGO, STZ, GBX
Afternoon: None
Â
Asia & Europe detail:
Asia: Nikkei -0.2%, Hang Seng -1.5%, Shanghai Composite -0.4%
Equity indices in the Asia-Pacific region ended Tuesday on a mixed note while markets in New Zealand and Japan were closed with Japan's Nikkei scheduled to remain closed on Wednesday. Xinhua reported that domestic travel in China was up more than 150% yr/yr during the New Year's weekend. Japan was hit by a big earthquake on Monday with reports pointing to at least 48 casualties. South Korea's President Yoon said that the domestic equity market is undervalued. Australia's Manufacturing PMI indicated contraction in the manufacturing sector for the tenth consecutive month while China's Caixin Manufacturing PMI expanded for the second month in a row. However, the official Manufacturing PMI, which was released on Saturday night, pointed to the third consecutive month of decreasing activity.
In economic data:
China's December Caixin Manufacturing PMI 50.8 (expected 50.4; last 50.7). December Manufacturing PMI 49.0 (expected 49.5; last 49.4) and Non-Manufacturing PMI 50.4 (expected 50.5; last 50.2)
South Korea's December S&P Manufacturing PMI 49.9 (last 50.0). December trade surplus $4.48 bln (expected surplus of $6.26 bln; last surplus of $3.78 bln). December Imports -10.8% yr/yr (expected -11.4%; last -11.6%) and Exports 5.1% yr/yr (expected 6.6%; last 7.7%)
Singapore's Q4 GDP 1.7% qtr/qtr (last 1.3%); 2.8% yr/yr (last 1.0%). Q4 URA Property Index 2.7% qtr/qtr (last 0.8%)
Australia's December Judo Bank Manufacturing PMI 47.6 (expected 47.8; last 47.7) and December Commodity Prices -10.7% yr/yr (last -12.8%)
---Equity Markets---
Japan's Nikkei: closed
Hong Kong's Hang Seng: -1.5%
China's Shanghai Composite: -0.4%
India's Sensex: -0.5%
South Korea's Kospi: +0.6%
Australia's ASX All Ordinaries: +0.5%
---FX---
USD/JPY: +0.7% to 141.81
USD/CNH: +0.4% to 7.1461
USD/INR: +0.1% to 83.27
Â
Europe: DAX -0.2%, FTSE -0.2%, CAC -0.4%
Major European indices trade on a mostly lower note while Spain's IBEX (+0.6%) outperforms with bank stocks contributing to the relative strength. European Central Bank policymaker De Cos repeated that the timing of rate cuts will depend on data. Manufacturing PMI readings from Germany, France, U.K., Spain, and Italy remained in contractionary territory, but they were a bit better than expected. The dollar is continuing last week's rebound against the euro and Sterling.
In economic data:Â
Eurozone's December Manufacturing PMI 44.4 (expected 44.2; last 44.2) and November M3 Money Supply -0.9% yr/yr (expected -1.0%; last -1.0%). November Private Sector Loans 0.5% yr/yr (expected 0.8%; last 0.6%) and loans to nonfinancials 0.0% yr/yr (last -0.3%)
U.K.'s December Manufacturing PMI 46.2 (expected 46.4; last 47.2)
Germany's December Manufacturing PMI 43.3 (expected 43.1; last 42.6)
France's December Manufacturing PMI 42.1 (expected 42.0; last 42.9)
Italy's December Manufacturing PMI 45.3 (expected 44.4; last 44.4)
Spain's December Manufacturing PMI 46.2 (expected 47.0; last 46.3)
---Equity Markets---
STOXX Europe 600: -0.2%
Germany's DAX: -0.2%
U.K.'s FTSE 100: -0.2%
France's CAC 40: -0.4%
Italy's FTSE MIB: +0.4%
Spain's IBEX 35: +0.6%
---FX---
EUR/USD: -0.7% to 1.0971
GBP/USD: -0.5% to 1.2661
USD/CHF: +1.1% to 0.8491
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