Stock Market Update

Equity futures point to a higher open this morning after stocks captured broad gains amid easing geopolitical tensions yesterday. The market had a sort of roller coaster session yesterday, rising sharply out of the gate after President Trump said he would not use force to acquire Greenland, ceding the bulk of those gains without a clear headline catalyst, and then retaking them late in the session after President Trump announced there is a "concept of a deal" regarding Greenland and he will not impose new tariffs on NATO members.

The New York Times reports that Denmark could give the U.S. sovereignty over small pockets of land in Greenland where the U.S. could build bases.

While there is lingering uncertainty around the details, the market seems satisfied for the time being, knowing that a trade war with Europe has been walked back. 

In the meantime, the market has another slate of earnings reports to digest, with several regional banking names in the fold, among others. 

Today is also a relatively busy day on the data front, which will feature the October and November Personal Income and Spending reports, which include the October PCE Price Index (Briefing.com consensus 0.2%) and November PCE Price Index (Briefing.com 0.4%), the Fed's preferred inflation gauge. 

In corporate news:

• Alibaba (BABA 175.38, +6.71, +4.0%) is planning an IPO for its chipmaking unit, according to Bloomberg. 
• GE Aerospace (GE 319.00, +0.50, +0.2%) beat EPS expectations by $0.14, beat revenue expectations, and guided FY26 EPS in-line. 
• Proctor & Gamble (PG 144.70, -1.36, -0.9%) beat EPS expectations by $0.02, reported revenues in-line, and reaffirmed FY26 EPS and revenue guidance.

Reviewing overnight developments:

Equity indices in the Asia-Pacific region climbed on Thursday with South Korea's Kospi (+0.9%) reaching another fresh record. Japan's Nikkei: +1.7%, Hong Kong's Hang Seng: +0.2%, China's Shanghai Composite: +0.1%, India's Sensex: +0.5%, South Korea's Kospi: +0.9%, Australia's ASX All Ordinaries: +0.7%.

In news:

• Japan reported a smaller-than-expected trade surplus for December as imports grew more than expected while export growth undershot estimates.
• Australia reported strong employment figures for December with the Unemployment Rate unexpectedly falling to 4.1% from 4.3%, which boosted expectations for a rate hike in February.
• Expectations for a near-term rate hike from the Bank of Japan also increased. The BoJ will release its latest statement overnight, but a rate hike is not expected just yet.

In economic data:

• Japan's December trade surplus JPY105.7 bln (expected JPY357.0 bln; last JPY316.7 bln). December Imports 5.3% yr/yr (expected 3.6%; last 1.3%) and Exports 5.1% yr/yr (expected 6.1%; last 6.1%)
• South Korea's Q4 GDP -0.3% qtr/qtr (expected 0.1%; last 1.3%); 1.5% yr/yr (expected 1.9%; last 1.8%)
• Hong Kong's December CPI 0.3% m/m (last 0.0%); 1.4% yr/yr (last 1.2%)
• Australia's December Employment Change 65,200 (expected 28,300; last -28,700) and full Employment Change 54,800 (last -65,300). December Unemployment Rate 4.1% (expected 4.4%; last 4.3%) and Participation Rate 66.7% (expected 66.8%; last 66.6%)
• New Zealand's December Electronic Card Retail Sales -0.1% m/m (last 1.2%); -0.5% yr/yr (last 1.6%)

Major European indices trade in the green while regional sovereign debt is also on the rise. STOXX Europe 600: +1.0%, Germany's DAX: +1.1%, U.K.'s FTSE 100: +0.4%, France's CAC 40: +1.1%, Italy's FTSE MIB: +1.0%, Spain's IBEX 35: +0.5%.

In news:

• Automotive names are among the outperformers after Volkswagen and Michelin reported strong cash flow for 2025.
• German Chancellor Merz called for "significant" defense investment. Bundesbank expects only modest growth in the German economy in Q1.

In economic data:

• U.K.'s December Public Sector Net Borrowing GBP11.58 bln (expected GBP13.40 bln; last GBP10.49 bln). January CBI Distributive Trades Survey -17 (expected -35; last -44)