Stock Market Update

Equity futures point to a lower open this morning after stocks made a nice run during last week's holiday-abbreviated action that mitigated much of the losses incurred during the first few weeks of November. The major averages all gained over 3.0% last week, which was enough for a mixed finish for the month. The S&P 500 closed slightly higher in November, as did the DJIA, while substantial losses across tech names earlier in the month denied the Nasdaq Composite an eight-month winning streak. 

Mega-cap tech is driving the premarket losses this morning, with all of the "magnificent seven" names currently down more than 0.5%. 

The end-of-month strength in equities is largely attributed to a substantial bump in the market's expectations for a December rate cut from the Fed, which now sits at just under 90%. 

Bloomberg reports that President Trump said he knows who he will pick as Fed Chair nominee, though he has not yet announced the name of the candidate to the public. 

The market will receive the final November S&P Global U.S. Manufacturing PMI at 9:45 a.m. ET and the November ISM Manufacturing Index at 10:00 a.m. ET. 

In corporate news:

• The UK and U.S. will soon agree on a pharmaceuticals deal with zero tariffs, according to Sunday Times UK.
• Chevron (CVX 152.35, +1.22, +0.8%) was upgraded to Buy from Hold at HSBC with a target price of $169. 
• Tesla (TSLA 423.79, -6.38, -1.5%) sales fall in key European markets, according to Reuters. 
• UnitedHealthcare (UNH 327.68, -2.09, -0.6%) is aiming to sell its  South American unit to Patria Investments (PAX 15.07, +0.33, +2.2%), according to Reuters

Reviewing overnight developments:

Equity indices in the Asia-Pacific region started the week on a mostly lower note with Japan's Nikkei (-1.9%) slipping toward its November low while markets in China climbed. Japan's Nikkei: -1.9%, Hong Kong's Hang Seng: +0.7%, China's Shanghai Composite: +0.7%, India's Sensex: -0.1%, South Korea's Kospi: -0.2%, Australia's ASX All Ordinaries: -0.6%.

In news:

• Yields on most JGBs climbed to fresh highs for the year after comments from Bank of Japan Governor Ueda boosted expectations for a rate hike later this month.
• China's Manufacturing and Non-Manufacturing PMI readings for November pointed to continued contraction while Manufacturing PMI readings from Japan and South Korea also reflected decelerating activity.

In economic data:

• China's November Manufacturing PMI 49.2, as expected (last 49.0) and Non-Manufacturing PMI 49.5 (expected 50.0; last 50.1). November RatingDog Manufacturing PMI 49.9 (expected 50.5; last 50.6)
• Japan's November Manufacturing PMI 48.7 (expected 48.8; last 48.8). Q3 Capital Spending 2.9% yr/yr (expected 5.9%; last 7.6%)
• South Korea's November trade surplus $9.74 bln (expected surplus of $8.40 bln; last surplus of $6.00 bln). November Imports 1.2% yr/yr (expected 3.4%; last -1.5%) and Exports 8.4% yr/yr (expected 5.7%; last 3.5%). November Manufacturing PMI 49.4 (last 49.4)
• Hong Kong's October Retail Sales 6.9% yr/yr (last 5.9%)
• India's November Manufacturing PMI 56.6 (expected 57.4; last 59.2). October Industrial Production 0.4% yr/yr (expected 3.6%; last 4.6%) and October Manufacturing Output 1.8% m/m (last 4.8%)
• Australia's final November Manufacturing PMI 51.6, as expected (last 51.6). November Commodity Prices -1.7% yr/yr (last -1.3%). November MI Inflation Gauge 0.3% m/m (last 0.3%). Q3 Business Inventories -0.9% qtr/qtr (last 0.1%). Q3 Gross Operating Profits 0.0% qtr/qtr (expected 1.7%; last -2.6%). November ANZ Job Advertisements -0.8% m/m (last -1.9%)
• New Zealand's October Building Consents -0.9% m/m (last 7.3%)

Major European indices trade in the red. STOXX Europe 600: -0.6%, Germany's DAX: -1.4%, U.K.'s FTSE 100: -0.2%, France's CAC 40: -0.8%, Italy's FTSE MIB: -1.0%, Spain's IBEX 35: -0.5%.

In news:

• Final November Manufacturing PMI readings from the region were largely underwhelming.
• European Central Bank policymaker De Guindos said that the current level of rates is appropriate, echoing comments from other policymakers.
• Policymaker Nagel shared a similar view, saying that policy is broadly neutral right now. Shares of Airbus have been pressured amid concerns about quality.

In economic data:

• Eurozone's November Manufacturing PMI 49.6 (expected 49.7; last 50.0)
• Germany's November Manufacturing PMI 48.2 (expected 48.4; last 49.6)
• U.K.'s November Manufacturing PMI 50.2, as expected (last 50.2). October Mortgage Approvals 65,020 (expected 64,000; last 65,650) and October Net Lending to Individuals GBP5.40 bln (expected GBP6.40 bln; last GBP6.60 bln)
• France's November Manufacturing PMI 47.8, as expected (last 48.8)
• Italy's November Manufacturing PMI 50.6 (expected 50.1; last 49.9)
• Spain's November Manufacturing PMI 51.5 (expected 52.3; last 52.1)
• Swiss October Retail Sales 2.7% yr/yr (expected 1.2%; last 1.8%)