Stock Market Update

Equity futures point to a higher opening this morning after the S&P 500 and DJIA posted losses for the third consecutive session in yesterday's action. The Nasdaq Composite notched a modest gain as mega-cap and tech names saw some modest buy-the-dip interest following recent weakness, with much of the buying action coming in the final hour of trading. 

Many of those same big tech names are higher again in the premarket, helping lift futures tied to the major averages. 

On the geopolitical front, Bloomberg reported that the U.S. is preparing new sanctions on Russia if President Vladimir Putin rejects a peace deal with Ukraine. Optimism around a potential agreement to end the war saw crude oil prices slide 2.7% yesterday as investors anticipated Russia's return to the global oil market. 

Most of today's economic data releases have been delayed, though the market will hear from Atlanta Fed President Raphael Bostic (nonvoting FOMC member), New York Fed President John C. Williams (voting FOMC member), and Fed Governor Christopher Waller (voting FOMC member), who is set to be interviewed by President Trump for the Fed Chair role today. 

The MBA Mortgage Applications Index for the week ended December 13 contracted 3.8%, from a prior increase of 4.8%. 

In corporate news:

• Amazon (AMZN 225.89, +3.33, +1.5%) is in discussions to invest $10 billion in OpenAI, according to Financial Times. 
• Alphabet's (GOOG 3309.38, +1.65, +0.5%) Waymo is looking to raise $15 billion in funding, valuing the company at $100 billion, according to Bloomberg. 
• General Mills (GIS 47.32, +0.30, +0.6%) beat EPS expectations by $0.07, beat revenue expectations, and reaffirmed its FY26 outlook. 
• Lennar (LEN 112.06, -5.51, -4.7%) missed EPS expectations by $0.18 and beat revenue expectations. The company saw deliveries increase 4% year over year and guided 1Q26 deliveries below consensus. 
• Warner Bros. Discovery's (WBD 28.51, -0.39, -1.4%) Board of Directors unanimously recommended that shareholders reject Paramount Skydance's (PSKY 13.60, -0.25, -1.8%) hostile takeover bid. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Wednesday on a mostly higher note after overcoming some early softness. Japan's Nikkei: +0.3%, Hong Kong's Hang Seng: +0.9%, China's Shanghai Composite: +1.2%, India's Sensex: -0.1%, South Korea's Kospi: +1.4%, Australia's ASX All Ordinaries: -0.1%.

In news:

• Japan's November exports grew at their fastest pace in nine months with a rebound in growth of exports to the U.S.
• The Japanese government is reportedly considering a 20% tax deduction for startup investments.
• Meanwhile, Prime Minister Takaichi said that capacity needs to be strengthened with proactive fiscal policy.
• Similarly, China's government also called for proactive fiscal policy in 2026.

In economic data:

• Japan's October Core Machinery Orders 7.0% m/m (expected -1.8%; last 4.2%); 12.5% yr/yr (expected 3.6%; last 11.6%). November trade surplus JPY322.2 bln (expected surplus of JPY71.2 bln; last deficit of JPY226.1 bln). November Exports 6.1% yr/yr (expected 4.8%; last 3.6%) and Imports 1.3% yr/yr (expected 2.5%; last 0.7%)
• Singapore's November trade surplus SGD7.669 bln (last surplus of SGD7.168 bln). November Non-Oil Exports 6.6% m/m (last 8.8%); 11.6% yr/yr (last 21.7%) o Australia's November MI Leading Index 0.0% m/m (last 0.1%)
• New Zealand's Q3 Current Account deficit NZD8.37 bln (expected deficit of NZD7.62 bln; last deficit of NZD1.30 bln)

Major European indices are mixed. STOXX Europe 600: +0.3%, Germany's DAX: flat, U.K.'s FTSE 100: +1.5%, France's CAC 40: -0.3%, Italy's FTSE MIB: +0.5%, Spain's IBEX 35: +0.4%.

In news:

• The U.K.'s FTSE (+1.6%) approaching its November high after the release of a cooler than expected CPI report for November, which showed an unexpected deceleration in the year-over-year CPI growth rate to 3.2% from 3.6%.
• The report solidified expectations for a rate cut tomorrow with the market now pricing in nearly three rate cuts for 2026. The Trump administration is reportedly looking for ways to retaliate against the EU's digital tax.

In economic data:

• Eurozone's November CPI -0.3% m/m, as expected (last 0.2%); 2.1% yr/yr (expected 2.2%; last 2.2%). November Core CPI -0.5% m/m, as expected (last -0.5%); 2.4% yr/yr, as expected (last 2.4%). Q3 Labor Cost Index 3.3% yr/yr (expected 3.5%; last 3.9%)
• Germany's December ifo Business Climate 87.6 (expected 88.2; last 88.0). December Current Assessment 85.6 (expected 85.7; last 85.6) and Business Expectations 89.7 (expected 90.5; last 90.5)
• U.K.'s December CBI Industrial Trends Orders -32 (expected -35; last -37). November CPI -0.2% m/m (expected 0.0%; last 0.4%); 3.2% yr/yr (expected 3.5%; last 3.6%). November Core CPI 3.2% yr/yr (expected 3.4%; last 3.4%). November Input PPI 0.3% m/m (expected 0.2%; last 0.0%) and Output PPI 0.1% m/m, as expected (last 0.1%). November Inflation Expectations 3.2% (expected 3.5%; last 3.6%)