Daily Game Plan

by Contributor
on January 6, 2025

TODAY’S GAME PLAN:  from the trading
desk, this is not research

TODAY’S ECONOMIC DATA: ET  9:15 a.m: Fed’s Cook speaks, 9:45 a.m: US December Services, Composite
PMIs 10:00am Factory Orders m/m

 

Highlights and News:  

  • Walt Disney Co. and streaming provider FuboTV Inc., are nearing a deal to combine their online live TV businesses
  • Nippon Steel, US Steel File Lawsuits After Biden Blocks Deal
  • Canada’s Trudeau Is Likely to Resign This Week, Globe Says

 

Global stocks edged higher on Monday, with U.S. equity futures rising in premarket trading as investors awaited key labor market data scheduled for the week, including
nonfarm payrolls on Friday. While most Asian markets declined, European stocks advanced. Monday’s economic highlights include the PMI Composite Final Report and November factory orders, with Federal Reserve Governor Lisa Cook set to speak. Rivian gained slightly
following strong Q4 deliveries, while Nvidia and AMD also advanced. Bitcoin rose, oil, gold, and Treasury yields had modest early moves.

 

EQUITIES:  

US equity futures rose in premarket trading, signaling that Friday’s rally could extend further after a year-end losing streak, led by a rebound in tech stocks. Key
movers included American Air, rising 4% after three analysts upgraded the stock to buy; FuboTV, jumping 30% on news of a potential deal with Walt Disney Co.; Paycor HCM, gaining 21% after reports of acquisition talks with Paychex; and Uber, up 5% on a $1.5
billion share repurchase announcement. Rivian’s strong Q4 deliveries sent its stock up slightly, while semiconductor stocks like Micron, AMD, and Nvidia gained. US Steel gained 5% after filing lawsuits over its blocked merger, and Moderna rose 3% alongside
other vaccine makers as flu activity increased. The Magnificent Seven—Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta Platforms, and Tesla—saw modest premarket gains.

 

Futures ahead of the bell: E-Mini S&P +0.8%, Nasdaq +1.02%, Russell 2000 +1.1%, DJI +0.3%.

European stock markets rose, led by autos, tech, and luxury sectors, after reports suggested President-elect Donald Trump plans a more moderate tariff policy targeting
only critical imports. The Stoxx 600 Index climbed 0.8%, with auto stocks surging 3.6%, fueled by strong U.S. auto sales and tariff optimism. Tech shares gained 3.3% on news of Microsoft’s $80 billion AI investment, while luxury brands like LVMH and Richemont
advanced over 4%. Meanwhile, London’s FTSE 100 lagged due to downgrades for Unilever and Rolls-Royce. Analysts anticipate stock-picking opportunities amid economic challenges, particularly in Southern Europe, as Germany’s inflation data looms. Stoxx 600 +0.9%,
CAC +2.4%, FTSE 100 +0.1%.

Asian stocks traded in a narrow range as gains in tech shares, fueled by Microsoft’s $80 billion AI data center investment, were offset by declines in Japan, which reopened after holidays.
The MSCI Asia Pacific Index fluctuated within 0.3%, with chipmakers like TSMC and SK Hynix boosting Taiwanese and South Korean markets, while Japan and India saw declines. Chinese equities closed slightly lower despite upbeat services data, with analysts citing
the need for stronger stimulus. Challenges such as potential U.S. tariffs, a strong dollar, and geopolitical risks weigh on the region’s outlook, as Goldman Sachs cuts its earnings target for Asian markets. Topix -1.02%,Hang Seng -0.3%, China’s CSI 300 -0.1%,
ASX +0.08%, Nikkei 225 -1.47%, Kospi +1.9%.

FIXED INCOME: 
 

Treasuries erased early losses following a Washington Post report suggesting Trump’s tariff plan may target only “critical imports,” prompting a sharp drop in the
dollar and a gradual rise in Treasuries. Yields across maturities remained richer, with the 10-year yield flat at 4.60%, outperforming European counterparts. The focus shifted to this week’s $50 billion corporate bond issuance and Treasury auctions, starting
with $58 billion in 3-year notes. U.S. economic data and Federal Reserve speeches are also anticipated, alongside the December jobs report and Carter’s state funeral later in the week.

 

 

 

METALS: 

 

Gold inched higher, paring earlier losses as Federal Reserve officials emphasized the need to prioritize inflation control, tempering expectations for rapid rate
cuts in 2025. The Fed’s cautious approach could hinder Gold’s performance following its 27% surge last year. Goldman Sachs postponed its $3,000 gold price forecast to mid-2026, citing fewer anticipated rate cuts. Gold +0.2%, Silver +2.2%. 

 

 

ENERGY:   

 

Oil prices steadied at their highest levels since mid-October, supported by colder weather boosting demand and expectations of tighter sanctions on Iranian and Russian
exports. The rally was fueled by strong heating demand, higher refining margins, and rising natural gas prices. Saudi Aramco increased February crude prices for Asian buyers, signaling stronger demand, while potential Western sanctions on Iranian and Russian
oil added supply concerns. WTI +0.6%, Brent +0.6%, Nat Gas +8.8%.

 

 

CURRENCIES: 

In currency markets, the U.S. dollar index slumped 0.7% on Monday after a report said President-elect Donald Trump was mulling tariffs that would only be applied
to critical imports, potentially a relief for countries that were expecting broader levies. USD/JPY rose following hawkish Fed comments emphasizing the need to combat inflation. Commodity-linked currencies like AUD and NZD gained on optimism about China’s
economic support, while EUR/USD climbed after German inflation data tempered ECB rate-cut expectations. Meanwhile, the Canadian dollar strengthened after reports suggested Prime Minister Justin Trudeau may resign as Liberal Party leader this week, potentially
triggering a leadership contest. USD/CAD fell 0.2%, though analysts expect limited impact on the loonie due to bearish macroeconomic factors. US$ Index -0.75%, GBPUSD +0.9%, EURUSD +0.9%, USDJPY -0.3%, AUDUSD +1.1%, NZDUSD +1.1%, USDCHF +1.1%, USDCAD -0.8%

 

 

 

Bitcoin +0.6%, Ethereum -0.17%

Colors within the report:
Green is always the 200 period (day, week).
Red is always 21,
Blue = 50,
Brown =
100 *Stars have added importance 

 

 

 

 

 

Data sources: Bloomberg, Reuters, CQG

 

 

Dan Forsythe,CMT

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Charts

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