US Equity Futures Slip as Year Comes to a Close
US equity futures saw a decline following a muted session on Wall Street, while European and Asian markets advanced in quiet holiday trading as the end of the year approaches. S&P futures were down 0.3% at 8:00 am after ending Thursday flat. The Nasdaq 100 also fell 0.2% in a post-holiday session. The 10-year Treasury yield remained near a seven-month high, and the dollar was steady, set for its best year since 2015. Oil reversed losses from Thursday and was expected to gain.
In premarket trading, Arena Group climbed 18% after news that its plan to regain compliance with listing standards had been accepted by NYSE American. SES AI soared 64% and was on track to extend gains for a fifth session after a significant increase in shares on Thursday.
Investors are keeping an eye on President-elect Donald Trump’s policies, which could impact inflation rates and potentially lead to a more hawkish stance from the central bank. David Kruk, head of trading at La Financiere de L’Echiquier in Paris, noted, “The most important move at year-end is the rise of the US 10-year bond, showing anticipation for Trump’s inauguration and its impact on inflation.”
European markets saw a 0.5% climb as trading resumed after a two-day break, with modest weekly gains expected. The MSCI Asia Pacific index rose for the fifth consecutive day, with Tokyo shares jumping after the yen dropped to a five-month low. In FX, the Bloomberg dollar index remained steady, heading for its best year since 2015.
The yen rebounded slightly following comments from Finance Minister Katsunobu Kato about monitoring foreign exchange market movements. Data released showed inflation in Tokyo accelerating for a second month. Bank of Japan board members had mixed views on the timing of an interest-rate hike at their last meeting.
Treasuries were under pressure as US trading began, with yields rising. In commodity markets, iron ore prices dropped, while oil gained and gold remained steady. Bitcoin saw a slight increase after a recent rally.
Upcoming economic data includes November advance goods trade balance and preliminary wholesale inventories. Fed speakers are scheduled to resume on January 3.
Market Snapshot:
- S&P 500 futures down 0.4% to 6,073.75
- STOXX Europe 600 up 0.3% to 505.34
- MXAP up 0.4% to 182.70
- Nikkei up 1.8% to 40,281.16
- Hang Seng Index little changed at 20,090.46
- Gold spot down 0.3% to $2,625.09
- US Dollar Index little changed at 108.17
Top Overnight News:
- The Bank of Japan indicates a potential rate hike next month
- German President dissolves parliament, sets snap election date
- Bitcoin rally shows signs of slowing down