March S&P 500 E-Mini futures are showing an upward trend this morning, following a positive close in the regular session for three major U.S. indices. This rise is fueled by the growing expectation that the Federal Reserve may initiate interest rate cuts as early as March.
During Tuesday’s session, the S&P 500 reached a near 2-year high, while the Nasdaq 100 hit a record peak. Intel Corporation (INTC) saw a significant increase, over +5%, leading gains across Wall Street after receiving approval from Israel for a $3.2 billion grant towards a $25 billion chip plant. Energy stocks also saw gains, propelled by a rise in WTI crude prices, with Marathon Oil Corporation (MRO) and Baker Hughes Co (BKR) both up about +2%. FedEx Corporation (FDX) advanced over +1% following an accelerated share repurchase agreement to buy back $1 billion of its shares. On the downside, Bristol Myers Squibb (BMY) dropped more than -1% after announcing its acquisition of RayzeBio for about $4.1 billion.
Chris Larkin from E*Trade, referencing Morgan Stanley, commented that market momentum into the New Year might hinge on the duration of positivity surrounding potential Fed rate cuts.
Economic data revealed a +4.9% y/y increase in the U.S. S&P/CS HPI composite – 20 n.s.a. for October, slightly below the +5.0% y/y expectation.
U.S. rate futures are indicating a 14.5% chance of a 25 basis point rate cut at the January policy meeting and a 72.7% probability for March.
Attention is now turning to the U.S. Richmond Manufacturing Index, expected to be at -7, compared to the previous -5.
In bond markets, the United States 10-year rates are down to 3.876%, a decrease of -0.23%.
Euro Stoxx 50 futures are up +0.26%, buoyed by gains in Asia and Wall Street, with speculation of early next year rate cuts by major central banks. Technology stocks are leading gains, and mining stocks are also up following positive data from China. Trading volumes are expected to be light as the year-end approaches. Bayer Ag (BAYN.D.DX) rose over +2% after announcing a trial victory.
Asian markets closed higher, with China’s Shanghai Composite and Japan’s Nikkei 225 up +0.54% and +1.13%, respectively. Gains in semiconductor and energy stocks led the rise in China. Hong Kong-listed tech giants like Tencent and NetEase rebounded following relaxed gaming restrictions. Industrial profits in China surged in November, marking the fourth consecutive month of growth. Foreign investors bought a net 5.6 billion yuan of Chinese stocks, the largest daily inflow since December.
Japan’s Nikkei 225 closed higher, with no policy shift from the Bank of Japan. All sectors of the Nikkei 225 were up, especially energy and utilities. The Bank of Japan board discussed the timing of a potential rate hike, with several members not urgent about the move. SoftBank Group Corp climbed over +4% after announcing it would receive $7.6 billion of T-Mobile US shares. The Japanese November Housing Starts were weaker than expected at -8.5% y/y.
Pre-Market U.S. Stock Movers:
Coherus BioSciences Inc (CHRS) is up about +35% following FDA approval of its cancer drug Udenyca’s on-body injector.
Opthea Ltd (OPT) surged over +37% after securing additional funding under an amended agreement.
Elicio Therapeutics Inc (ELTX) rose more than +2% following a significant stock purchase by director and major owner Yekaterina Chudnovsky.
Fisker Inc (FSR) gained over +2% after announcing the first customer hand-over of its electric SUV.
Bit Digital Inc (BTBT) is up more than +7% following plans to double its Bitcoin mining operations.
Today’s U.S. Earnings Spotlight includes Mesabi Trust (MSB), Citius Pharma (CTXR), PHX Minerals (PHX), and Veru (VERU).