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28/12/23 Briefing

The S&P 500 futures are flat and are trading roughly in line with fair value, the Nasdaq 100 futures are up 35 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are down 67 points and are trading 0.2% below fair value.

Stock futures indicate a mixed open. Participation will be light again with only two trading days left in 2023. Market participants are waiting to see if the S&P 500 will close above its previous record high before the end of the year, which is only 0.3% higher than yesterday's close. The Dow Jones Industrial Average for its part set a new all-time closing high again yesterday. 

The 2-yr note yield is up two basis points from yesterday at 4.25% and the 10-yr note yield is up three basis points to 3.82%.

There is a batch of economic data to get through this morning, including:

  • 8:30 ET: Weekly Initial Claims (Briefing.com consensus 207,000; prior 205,000), Continuing Claims (prior 1.865 mln), advance November goods trade deficit (prior -$89.8 bln), November advance Retail Inventories (prior 0.0%), and November advance Wholesale Inventories (prior -0.2%)

  • 10:00 ET: November Pending Home Sales (prior -1.5%)

  • 10:30 ET: Weekly natural gas inventories (prior -87 bcf)

  • 11:00 ET: Weekly crude oil inventories (prior +2.91 mln)

In corporate news:

  • Apple (AAPL 193.70, +0.54, +0.3%): Watch Series 9 and Ultra 2 will be available online as of 12:00 PM Pacific time today following import ban pause, according to ABC News

  • NetEase (NTES 89.82, +2.20, +2.5%): trading up pre-open after China's government softened its rhetoric surrounding online gaming restrictions.

  • General Motors (GM 36.10, +0.02, +0.1%): files lawsuit against San Francisco for $121 bln in back taxes, according to Reuters

  • 3M (MMM 108.56, -0.18, -0.2%): reports that Combat Arms Earplugs settlement implementation reaches next milestone; On December 26, company made a $250 mln payment to the Qualified Settlement Fund

  • Travelers (TRV 188.99, +0.37, +0.2%) initiated with a Hold at HSBC Securities

  • Sociedad Quimica y Minera (SQM 64.85, +3.88, +6.4%): reaches MoU with CODELCO for the operation and development of the Salar de Atacama

Reviewing overnight developments:

  • Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Japan's Nikkei: -0.4%, Hong Kong's Hang Seng: +2.5%, China's Shanghai Composite: +1.4%, India's Sensex: +0.5%, South Korea's Kospi: +1.6%, Australia's ASX All Ordinaries: +0.7%.

  • In economic data:

  • Japan's November Industrial Production -0.9% m/m (expected -1.6%; last 1.3%) and November Retail Sales 5.3% yr/yr (expected 5.0%; last 4.1%). November Large Retailers' Sales 1.0% m/m (last -1.6%); 5.0% yr/yr (last 4.0%)

  • South Korea's January Manufacturing BSI Index 72 (last 72). November Industrial Production 3.3% m/m (expected 1.0%; last -3.5%); 5.3% yr/yr (expected 3.0%; last 0.9%). November Retail Sales 1.0% m/m (last -0.8%) and November Service Sector Output -0.1% m/m (last -0.9%)

  • Hong Kong's November trade deficit $27.9 bln (last deficit of $25.8 bln). November Imports 7.1% m/m (last 2.6%) and Exports 7.4% m/m (last 1.4%)

  • In news:

  • Bank of Japan Governor Ueda said that the chance of exiting negative rate policy is 2024 is greater than zero, adding that the meeting of branch managers in two weeks will have "a lot of information."

  • There was ongoing focus on yesterday's announcement about reduced frequency of scheduled long-term JGB purchases in 2024.

  • China's government softened its rhetoric surrounding online gaming restrictions.

  • Hapag-Lloyd will stick to the longer shipping route around the Suez Canal for at least a few more days.

  • China Securities Times noted that rate cuts have fueled outflows, which are hurting households.

  • South Korea's Industrial Production grew 5.3% yr/yr in November, the fastest pace since May 2022.

  • Major European indices trade just below their flat lines amid light volume as the end of 2023 approaches. STOXX Europe 600: UNCH, Germany's DAX: -0.2%, U.K.'s FTSE 100: -0.1%, France's CAC 40: -0.4%, Italy's FTSE MIB: -0.1%, Spain's IBEX 35: -0.2%.

  • In economic data:

  • France's November jobseeker total 2.827 mln (last 2.821 mln)

  • Spain's November Retail Sales 5.2% yr/yr (last 5.3%)

  • In news:

  • European Central Bank policymaker Holzmann said that it is too early to think about rate cuts and there is no guarantee of cuts starting in 2024.

  • British Chancellor Hunt will present the Spring Budget on March 6.

 

U.S. equity futures:

  • S&P 500 Futures flat @ 4,834

  • DJIA Futures: -67 @ 37,939

  • Nasdaq 100 Futures: +35 @ 17,148

Overseas:

  • Europe: DAX -0.2%, FTSE -0.1%, CAC -0.4%

  • Asia: Nikkei -0.4%, Hang Seng +2.5%, Shanghai Composite +1.4%

Commodities:

  • Crude Oil -1.04 @ 73.07

  • Nat Gas +0.060 @ 2.610

  • Gold -7.80 @ 2085.30

  • Silver -0.081 @ 24.560

  • Copper -0.0310 @ 3.9285

Earnings/Guidance:

  • There is no earnings news of note

News:

  • A member of Israel's war cabinet threatened action on a second front, along border with Lebanon, according to New York Times

  • Bank of Japan Governor Ueda said that the chance of exiting negative rate policy is 2024 is greater than zero, adding that the meeting of branch managers in two weeks will have "a lot of information."

  • European Central Bank policymaker Holzmann said that it is too early to think about rate cuts and there is no guarantee of cuts starting in 2024.

  • South Korea's Industrial Production grew 5.3% yr/yr in November, the fastest pace since May 2022

  • 3M (

  • Apartment Income REIT (

  • Apple (

  • India officials are targeting Apple (

  • Chord Energy (

  • EchoStar (

  • Energy Fuels (

  • MediWound (

  • New Fortress Energy (

  • PENN Entertainment (

  • Rambus (

  • Sociedad Quimica y Minera (

M&A:

  • Anglo American (

  • Enpro Inc. (

  • Lions Gate Entertainment (LGF.A) closes on acquisition of entertainment platform eOne from Hasbro

  • Petrobras (

Syndicate:

  • Profound Medical (

IPOs:

  • No IPOs expected to price.

Gapping Up/Down

  • Gapping up: LNZA +5.7%, SQM +5.2%, UUUU +2.7%, LGF.A +2.5%, SATS +2.2%, VNET +2.1%, NFE +1.9%, WT +1.6%, PENN +1.5%

  • Gapping down: PROF -8.7%, RGS -3.3%, MNKD -1.6%

Analyst Research (see Upgrades/Downgrades calendar for full list):

  • Upgrades

  • WisdomTree (WT) upgraded to Buy from Neutral at Northcoast; tgt $9

  • Downgrades:

  • There are no downgrades of note

  • Others:

  • Allstate (ALL) initiated with a Hold at HSBC Securities; tgt $145

  • American Intl (AIG) initiated with a Buy at HSBC Securities; tgt $86

  • Chubb (CB) initiated with a Buy at HSBC Securities; tgt $263

  • LanzaTech (LNZA) initiated with a Buy at Janney; tgt $10

  • Progressive (PGR) initiated with a Hold at HSBC Securities; tgt $164

  • Spotify (SPOT) initiated with an Outperform at CICC; tgt $210

  • Tennant (TNC) initiated with a Buy at CL King; tgt $112

  • Travelers (TRV) initiated with a Hold at HSBC Securities; tgt $203

Econ Data:

  • 08:30 ET: Weekly Initial Claims (Briefing.com consensus 207,000; prior 205,000) and Continuing Claims (prior 1.865 mln)

  • 08:30 ET: Advance November goods trade deficit (prior -$89.8 bln), Advance November Retail Inventories (prior 0.0%), and Advance November Wholesale Inventories (prior -0.2%)

  • 10:00 ET: November Pending Home Sales (Briefing.com consensus 0.5%; prior -1.5%)

  • 10:30 ET: Weekly natural gas inventories (prior -87 bcf)

  • 11:00 ET: Weekly crude oil inventories (prior +2.91 mln)

Earnings:

  • Monday (Dec 25)

  • Markets closed for Christmas Day

  • Tuesday (Dec 26)

  • Morning: None

  • Afternoon:  None

  • Wednesday (Dec 27)

  • Morning:  None

  • Afternoon: None

  • Thursday (Dec 28)

  • Morning: None

  • Afternoon: None

  • Friday (Dec 29)

  • Morning: None

  • Afternoon: None

 

Asia & Europe detail:

Asia: Nikkei -0.4%, Hang Seng +2.5%, Shanghai Composite +1.4%

Equity indices in the Asia-Pacific region ended Thursday on a mostly higher note. Bank of Japan Governor Ueda said that the chance of exiting negative rate policy is 2024 is greater than zero, adding that the meeting of branch managers in two weeks will have "a lot of information." In addition, there was ongoing focus on yesterday's announcement about reduced frequency of scheduled long-term JGB purchases in 2024. China's government softened its rhetoric surrounding online gaming restrictions. Hapag-Lloyd will stick to the longer shipping route around the Suez Canal for at least a few more days. China Securities Times noted that rate cuts have fueled outflows, which are hurting households. South Korea's Industrial Production grew 5.3% yr/yr in November, the fastest pace since May 2022.

  • In economic data:

  • Japan's November Industrial Production -0.9% m/m (expected -1.6%; last 1.3%) and November Retail Sales 5.3% yr/yr (expected 5.0%; last 4.1%). November Large Retailers' Sales 1.0% m/m (last -1.6%); 5.0% yr/yr (last 4.0%)

  • South Korea's January Manufacturing BSI Index 72 (last 72). November Industrial Production 3.3% m/m (expected 1.0%; last -3.5%); 5.3% yr/yr (expected 3.0%; last 0.9%). November Retail Sales 1.0% m/m (last -0.8%) and November Service Sector Output -0.1% m/m (last -0.9%) 

  • Hong Kong's November trade deficit $27.9 bln (last deficit of $25.8 bln). November Imports 7.1% m/m (last 2.6%) and Exports 7.4% m/m (last 1.4%)

---Equity Markets---

  • Japan's Nikkei: -0.4%

  • Hong Kong's Hang Seng: +2.5%

  • China's Shanghai Composite: +1.4%

  • India's Sensex: +0.5%

  • South Korea's Kospi: +1.6%

  • Australia's ASX All Ordinaries: +0.7%

---FX---

  • USD/JPY: -0.7% to 140.77

  • USD/CNH: -0.7% to 7.1011

  • USD/INR: -0.1% to 83.14

 

Europe: DAX -0.2%, FTSE -0.1%, CAC -0.4%

Major European indices trade just below their flat lines amid light volume as the end of 2023 approaches. European Central Bank policymaker Holzmann said that it is too early to think about rate cuts and there is no guarantee of cuts starting in 2024. British Chancellor Hunt will present the Spring Budget on March 6.

  • In economic data:

  • France's November jobseeker total 2.827 mln (last 2.821 mln)

  • Spain's November Retail Sales 5.2% yr/yr (last 5.3%)

---Equity Markets---

  • STOXX Europe 600: UNCH

  • Germany's DAX: -0.2%

  • U.K.'s FTSE 100: -0.1%

  • France's CAC 40: -0.4%

  • Italy's FTSE MIB: -0.1%

  • Spain's IBEX 35: -0.2%

---FX---

  • EUR/USD: +0.1% to 1.1116

  • GBP/USD: -0.2% to 1.2778

  • USD/CHF: -0.7% to 0.8366

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