Early Look

Monday, January 6, 2025

U.S. futures are looking “green” following a strong rally on Friday that saw all eleven S&P sectors finish higher. The U.S. stock market rebounded Friday, led by the tech heavy Nasdaq which surged +1.8% behind mega cap tech winners (NVDA, AMZN, TSLA) but the rally failed to land the major indexes in positive territory for the week after a rough start into 2025. For the week, the S&P 500 fell -0.5%, the Dow retreated -0.6% and the Nasdaq fell -0.5%. This week, investors will be paying close attention to jobs data with JOLTs, ADP private payrolls mid-week and the U.S. nonfarm payrolls report due out on Friday. Also, of note this week, the Federal Open Market Committee (FOMC) will release the minutes from its mid-December monetary-policy meeting on Wednesday and on Friday, the Supreme Court will hear arguments in the highly anticipated TikTok ban case. There are a few earnings reports out late week heading into the unofficial start of Q4 results next week with STZ, DAL and WBA among names reporting. Heading into Q4 results, @FactSet noted late Friday “71 $SPX companies have issued negative EPS guidance for Q4 2024, which is above the 5-year average of 56 and above the 10-year average of 62.” Lastly, U.S stock and bond markets will be closed on Thursday 1/9 for a national day of mourning for former President Jimmy Carter, who passed away late last year.

In one of the top stories overnight, President-elect Donald Trump is considering tariff plans that would be applied to every country, but would cover only critical imports, a shift from his plans during the 2024 presidential campaign, The Washington Post reports. Trump previously called for “universal” tariffs of as high as 10% or 20% on everything imported into the U.S. It is unclear which imports or industries would face tariffs.

In Asian markets, The Nikkei Index tumbled -387 points to 39,307, the Shanghai Index fell -4 points to 3,206, and the Hang Seng Index dropped -71 points to 19,688. In Europe, the German DAX is up over 200 points to 20,114, while the FTSE 100 is up only a few points to 8,229 and the Cac-40 is up 100 points to 7,384. The U.S. dollar index (DXY) is down -0.9% to 108.05 after rising for the 13^th week in the last 14 (surging since the Fed cut rates by 50-bps last September). Oil prices hold at a three-month high on stronger demand.

• The Dow Jones Industrial Average rose 339.86 points, or 0.80%, to 42,732.13.
• The Nasdaq Composite surged 340.88 points, or 1.77%, to 19,621.68.
• The Russell 2000 Index advanced 36.80 points, or 1.65% to 2,268.47.

• 9:45 AM ET S&P Global Composite, Dec-Final…prior 56.6
• 9:45 AM ET S&P Global Services, Dec-Final…prior 58.5
• 10:00 AM ET                Durable Goods M/M for November
• 10:00 AM ET                Factory Orders M/M for November…est. (-0.3%)

• Earnings After the Close: None

• The Eurozone S&P Global final composite Purchasing Managers’ Index for the bloc rose to 49.6 in December from November’s 48.3, and just above a 49.5 preliminary estimate but still below the 50 mark separating growth from contraction.

• Capri Holdings (CPRI) upgraded to Outperform from Market Perform at BMO Capital.
• Lyft (LYFT) upgraded to Buy from Hold at Benchmark.

• In Oil drilling (NE, RIG), President Joe Biden is indefinitely blocking offshore oil and gas development in more than 625 million acres of US coastal waters, warning that drilling there is simply “not worth the risks” and “unnecessary” to meet the nation’s energy needs. Biden said the move was aligned with both his climate change agenda and his goal to conserve 30% of U.S. lands and waters by 2030.

• Paychex (PAYX) is in advanced talks to acquire smaller payroll processing rival Paycor HCM (PYCR), people with knowledge of the matter told Bloomberg. Talks may still fall apart, but if they are successful a deal may be announced as soon as this week, said the sources https://tinyurl.com/sudpaesu

• Cardinal Health (CAH) upgraded to Buy from Neutral at Bank America.

• Foxconn beats estimate with record Q4 revenue on AI demand; Q4 revenue surges 15.2% to $64.7B; revenue for consumer electronics division was flat; says Q1 should show strong growth yr/yr.
• Integral Ad Science (IAS) announced the departure of Tania Secor as Chief Financial Officer and the appointment of Jill Putman as Interim CFO, effective immediately; backs Q4 revenue view $148M-$150M (est. $148.95M) and backs Q4 adjusted EBITDA view $55M-$57M.
• MicroStrategy (MSTR) said it is targeting a capital raise of up to $2 billion to continue to strengthen its balance sheet and acquire more Bitcoin, the business software company announced late Friday.
• Palantir (PLTR) assumed with an Underweight at Morgan Stanley and $60 price target.
• Tenable Holdings Inc. (TENB) Chair and CEO Amit Yoran unexpectedly passed away yesterday, the company announced Saturday. The cause of death was cancer. The board is conducting a CEO search, including both internal and external candidates.