Stock Market Update

Equity futures point to a higher opening this morning after yesterday's retreat saw the S&P 500 close below its 50-day moving average as tech and mega-cap names face significant losses. 

Oracle (ORCL 180.79, +2.33, +1.3%) closed 5% lower yesterday after Blue Owl Capital (OWL 15.65, +0.26, +1.7%) pulled out of a $10 billion data center project, sparking concerns about the pace, financing, and return profile of large-scale AI infrastructure investments and weighing on other data center and power-related names.

Mega-cap tech is mostly higher in the premarket today, reflecting some choppy back-and-forth action heading into the end of the year. An impressive beat-and-raise earnings report from Micron (MU 256.38, +30.67, +13.6%) has the stock up double digits before the open and has seemingly restored some enthusiasm to an AI trade that has wavered as of late. 

The market is also anticipating some important economic data this morning in the form of the November CPI Report (Briefing.com consensus 0.3%), though some values will be missing due to lack of October data stemming from the government shutdown.

In corporate news:

• OpenAI has participated in talks to raise tens of billions of dollars, valuing the company around $750 billion, according to The Information. 
• Elliott Investment Management builds a $1 billion stake in Lululemon (LULU 224.47, +16.60, +8.0%), according to The Wall Street Journal. 
• Micron (MU 256.38, +30.67, +13.6%) beat EPS expectations by $0.82 and beat revenue expectations, with the company reporting Cloud Memory revenue up 99% year-over-year. The company guided Q2 EPS above consensus, with revenues above consensus. 
• Warner Brothers Discovery (WBD 28.27, +0.06, +0.2%) demanded Larry Ellison's personal guarantee to secure a bid from Paramount Skydance (PSKY 13.08, -0.02, -0.2%), according to The Wall Street Journal. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region ended Thursday on a mostly lower note. Japan's Nikkei: -1.0%, Hong Kong's Hang Seng: +0.1%, China's Shanghai Composite: +0.2%, India's Sensex: -0.1%, South Korea's Kospi: -1.5%, Australia's ASX All Ordinaries: UNCH.

In news:

• The People's Bank of China injected some liquidity through reverse repurchases. China Securities Times speculated that the need for reserve requirement ratio cuts is lower due to proactive fiscal policy.
• Japan is planning record defense spending of JPY9 trln for 2026.
• Australia reduced its borrowing forecast for 2026 by AUD25 bln due to an improved surplus forecast.
• New Zealand's Q3 GDP expanded at its fastest pace in three years after a brief contraction in Q2.

In economic data:

• Australia's December MI Inflation Expectations 4.7% (last 4.5%)
• New Zealand's Q3 GDP 1.1% qtr/qtr (expected 0.9%; last -1.0%); 1.3% yr/yr, as expected (last -1.1%)

Major European indices trade mostly higher. STOXX Europe 600: +0.3%, Germany's DAX: +0.2%, U.K.'s FTSE 100: -0.1%, France's CAC 40: +0.1%, Italy's FTSE MIB: +0.3%, Spain's IBEX 35: +0.7%.

In news:

• The Bank of England voted 5-4 to lower its bank rate by 25 basis points to 3.75% while central banks in Norway and Sweden did not make any policy changes.
• EU officials are meeting in Brussels to discuss a potential seizure of frozen Russian assets, but several countries remain opposed to this action.
• Germany is planning record debt issuance of EUR512 bln for 2026.
• The European Central Bank will release its latest policy statement at 8:15 ET, but the market does not expect any headline changes.

In economic data:

• Eurozone's October Construction Output 0.88% m/m (last -0.58%)
• France's December Business Survey 102 (expected 98; last 98)
• Swiss November trade surplus CHF3.841 bln (expected surplus of CHF5.32 bln; last surplus of CHF4.203 bln)