Futures are up. Data early Thursday showed China’s factory activity remained in expansion territory for the fifth straight month in December, while industrial activity in the eurozone was stuck in contraction. We’ll get similar figures from the U.S. later this morning.

Meanwhile, our Gunjan Banerji explores how declining liquidity could make stock trading a stomach-churning enterprise in the year ahead.

• Global stock markets got off to a strong start on the first trading day of the year after China’s central bank announced a fresh dose of monetary policy easing.
• Read our full market wrap here

Liquidity—how readily sellers can find buyers and buyers can find sellers—has been on the decline. That can mean higher costs and more volatile prices. The problem can touch traders big and small, from pension funds looking to hedge positions to retail traders jumping in and out of individual stocks.

Liquidity is difficult to measure, but it is likely to be a theme for investors in 2020.

“The number one client question in 2019 has been on liquidity,” Goldman Sachs analysts wrote in a December note to clients. The firm said earlier in the year that measures of liquidity have shown “high predictive power” when estimating volatility. The Federal Reserve also weighed in last year, listing falling liquidity in its compendium of risks to the U.S. financial system.

Liquidity in S&P 500 stock-index futures—a crucial market for hedging and making directional wagers—remains weak after dropping substantially during the late-2018 market swoon, according to Goldman. Among single stocks, it hovered near some of its lowest points of the decade in August, one of the latest periods of market turmoil. And an unexpected spell of turbulence also hit money markets in 2019, leading the Fed to flood the system with temporary funding.

It can even be onerous to trade shares of individual companies around the time of their earnings reports, according to a Goldman analysis of stocks in the Russell 3000, a broad U.S. stock-market gauge. Liquidity has dissipated on those days over the past four quarters, according to the bank, which measured how many shares are available to trade without having a significant impact on prices.

“You’ve got to have a stronger stomach than you used to have,” said Bill Smead, chief executive of Smead Capital Management, an investment firm. “When there’s no liquidity—how low it can go before it hits bottom—it can shake you up. It’s been a vicious circle for years.”

A corporate announcement these days can lead to a bigger stock swing than it would have in the past, he said. Mr. Smead says that means he can sometimes buy stocks for lower prices than he expected. That was the case when he picked up shares of Occidental Petroleum, which were punished in 2019 during a fight with activist investor Carl Icahn.

For a longer version of this article online, follow this link.

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• BMO Capital Markets and Goldman Sachs estimate the S&P 500 will end 2020 at 3400, 5.2% above where the index closed Tuesday, while Citigroup and Bank of America have put their target at 3300. Many investment banks forecast solid, if modest, gains for the coming year, citing central banks’ easy-money policies, a resilient U.S. economy and a breakthrough in Washington-Beijing trade talks.
• The euro had its calmest year ever, shrugging off its reputation as a volatile reflection of Europe’s perennially weak economy and never-ending political misfortunes. It never traded against the dollar below $1.09 or above $1.15, or a range of around 6 percentage points between its highs and lows for the year.
• On this day in 1915, as Europe’s armies mired themselves in a bloody standstill across their muddy trenches, Wall Street had its slowest trading day of the entire 20th century. Only 23,505 shares traded hands on the New York Stock Exchange. Naturally, with no one interested in the stock market, it was also one of the best times to buy in the entire 20th century: By the end of 1915, the Dow Jones Industrial Average had gained 81.66%, its greatest annual gain of all time.

U.S. manufacturing purchasing managers index data for December is expected at 9:45 a.m.

Recession has risen on the list of CEO fears in 2020. Fear of an economic decline topped the list of U.S. chief executives’ concerns going into 2020, according to a survey from the Conference Board.

Energy producers must pay the table for a shale drilling bonanza. The bill is coming due for the shale industry’s price war with OPEC, with North American oil-and-gas companies having more than $200 billion of debt maturing over the next four years.

Lessons from Japan’s “lost decades.” A record-long U.S. bull market hasn’t stopped investors from asking: Is Japanification coming this way, too?

China’s monetary policy is easing into the new year. Chinese officials kicked off the new year—one that is expected to present new challenges for the world’s second-largest economy—by signaling a tilt toward easier money.

PG&E: A California bankruptcy court sided with the electric utility in its fight with bondholders over the interest rate that it must pay on its debts while under bankruptcy court protection.

Melinta Therapeutics: The bankrupt biotechnology company won court approval to use its lenders’ cash to keep operating pending a possible sale of the business to health-care investment firm Deerfield Management.

Landec, a health-food and wellness company, will provide its latest earnings report after markets close today.