*Scheduling note: First to Market will not run on Thursday, Jan. 9, as markets will be closed to honor the legacy of former President Jimmy Carter.
A daily market update from FS Insight — what you need to know ahead of opening bell.
“Worrying does not empty tomorrow of its troubles, it empties today of its strength.” – Corrie Ten Boom
Overnight
Trump Imagines New Sphere of U.S. Influence Stretching From Panama to Greenland WSJ
Trump is considering a national economic emergency declaration to allow for new tariff program, sources say CNN
Fed minutes may begin to show the hurdle to further rate cuts RT
Thousands flee as wildfires burn out of control in and around Los Angeles and homes are destroyed AP
The ‘Hidden Force’ That Can Bring Mortgage Rates Down WSJ
Last Time Bond Yields Surged Like This, Stock Markets Sank BBG
Iran Releases Italian Journalist Cecilia Sala WSJ
US Firms Add 122,000 Jobs in ADP Data, Fewest Since August BBG
China’s currency hits 16-month low on Trump tariff fears FT
Cocoa Farmers Uproot Their Plants Despite Record Prices WSJ
Trump announces $20 billion foreign investment to build new U.S. data centers CNBC
Musk Vaulted to the Top of a Popular Videogame. Everyone’s Asking Where He Found the Time. WSJ
The Anti-Social Century ATL
Chart of the Day
| Overnight |
| S&P Futures +19
point(s) (+0.3%
) Overnight range: -6 to +20 point(s) |
| APAC |
| Nikkei -0.26%
Topix -0.59% China SHCOMP +0.02% Hang Seng -0.86% Korea +1.16% Singapore +1.54% Australia +0.77% India -0.08% Taiwan -1.03% |
| Europe |
| Stoxx 50 +0.21%
Stoxx 600 +0.37% FTSE 100 +0.22% DAX +0.44% CAC 40 -0.01% Italy +0.63% IBEX +0.22% |
| FX |
| Dollar Index (DXY) +0.36%
to 108.94 EUR/USD -0.24% to 1.0315 GBP/USD -0.26% to 1.2445 USD/JPY +0.19% to 158.35 USD/CNY +0.05% to 7.3316 USD/CNH +0.18% to 7.3531 USD/CHF +0.27% to 0.9122 USD/CAD +0.03% to 1.4375 AUD/USD -0.3% to 0.6211 |
| Crypto |
| BTC -0.81%
to 95701.73 ETH -0.15% to 3357.66 XRP +2.41% to 2.3245 Cardano +0.14% to 0.993 Solana -2.52% to 197.04 Avalanche -2.22% to 38.31 Dogecoin -0.14% to 0.3479 Chainlink -1.48% to 20.92 |
| Commodities and Others |
| VIX -0.39%
to 17.75 WTI Crude +0.9% to 74.92 Brent Crude +0.62% to 77.53 Nat Gas +4.67% to 3.61 RBOB Gas +0.0% to 2.027 Heating Oil +0.12% to 2.369 Gold +0.2% to 2653.88 Silver +0.59% to 30.23 Copper +0.3% to 4.208 |
| US Treasuries |
| 1M -1.6bps
to 4.2866% 3M -0.8bps to 4.2988% 6M -0.8bps to 4.2502% 12M -3.0bps to 4.1486% 2Y -0.2bps to 4.289% 5Y -0.3bps to 4.4614% 7Y -0.8bps to 4.5685% 10Y -0.6bps to 4.679% 20Y -0.4bps to 4.9752% 30Y -0.1bps to 4.9119% |
| UST Term Structure |
| 2Y-3
M Spread narrowed 1.5bps to -3.6
bps 10Y-2 Y Spread narrowed 0.4bps to 38.6 bps 30Y-10 Y Spread widened 0.5bps to 23.1 bps |
| Yesterday's Recap |
| SPX -1.11%
SPX Eq Wt -0.33% NASDAQ 100 -1.79% NASDAQ Comp -1.89% Russell Midcap -0.76% R2k -0.74% R1k Value -0.13% R1k Growth -1.92% R2k Value -0.69% R2k Growth -0.79% FANG+ -2.18% Semis -2.38% Software -2.45% Biotech +0.72% Regional Banks -0.94% SPX GICS1 Sorted: Energy +1.06% Healthcare +0.58% Materials -0.02% Indu -0.1% Fin -0.15% Cons Staples -0.27% Utes -0.29% REITs -0.72% Comm Srvcs -1.05% SPX -1.11% Cons Disc -2.21% Tech -2.39% |
| USD HY OaS |
| All Sectors +3.7bp
to 309bp All Sectors ex-Energy +3.4bp to 291bp Cons Disc +3.9bp to 260bp Indu +5.0bp to 237bp Tech +5.0bp to 310bp Comm Srvcs +0.8bp to 497bp Materials +2.6bp to 286bp Energy +4.6bp to 285bp Fin Snr +4.3bp to 271bp Fin Sub +0.8bp to 194bp Cons Staples +3.6bp to 270bp Healthcare +4.1bp to 365bp Utes +4.2bp to 218bp * |
| Date | Time | Description | Estimate | Last |
|---|---|---|---|---|
| 1/8 | 2PM | Dec 18 FOMC Minutes | n/a | 1.0 |
| 1/10 | 8:30AM | Dec AHE m/m | 0.3 | 0.4 |
| 1/10 | 8:30AM | Dec Unemployment Rate | 4.2 | 4.2 |
| 1/10 | 8:30AM | Dec Non-farm Payrolls | 163.0 | 227.0 |
| 1/10 | 10AM | Jan P UMich 1yr Inf Exp | 2.8 | 2.8 |
| 1/10 | 10AM | Jan P UMich Sentiment | 74.0 | 74.0 |
| 1/13 | 11AM | Dec NYFed 1yr Inf Exp | n/a | 2.97 |
| 1/14 | 6AM | Dec Small Biz Optimisum | 100.5 | 101.7 |
| 1/14 | 8:30AM | Dec PPI m/m | 0.4 | 0.4 |
| 1/14 | 8:30AM | Dec Core PPI m/m | 0.3 | 0.2 |
MORNING INSIGHT
Good morning!
The S&P 500 is holding onto a modest gain of 0.5% this year. And Wednesday is the fifth day (rule of “first 5 days”) and a positive year-to-date close historically is a good omen for the year.
Click HERE for more.
TECHNICAL
- SPX might test 5829, which looks quite important in the days ahead.
- Both AAPL and NVDA look close to reaching short-term support by the end of the week.
- U.S. 10-year Treasury yields are nearing an important area near last April’s peaks.
Click HERE for more.
CRYPTO
We highlight a major DeFi milestone and explore how the latest Services PMI data could impact crypto—tying it back to our “But the Tariff News” theme from earlier in the week.
Click HERE for more.
First News
A couple of hot economic prints on Tuesday extended a recent and somewhat puzzling climb higher in Treasury yields.
Data from the Institute for Supply Management showed that growth in the U.S. services sector in December rose more than expected. Meanwhile, the Labor Department’s Job Openings and Labor Turnover Survey suggested that more Americans in November stayed put at their jobs and hiring activity remained slow.
The 10-year Treasury yield finished up at 4.683%, its highest level since April 2024. Stocks ended the day lower, with the S&P 500 down 1.1%.
Treasury yields have been on a relentless and a bit unexplainable climb higher since late September. The advances have picked up steam since early December, before the Federal Reserve signaled that it might keep interest rates “higher for longer.” And since that announcement, yields have only ticked slightly higher, further confusing many investors.
To be clear, Fundstrat Head of Technical Strategy Mark Newton sees this rise in yields nearing a peak.
But for now, the latest leg higher came Tuesday.
ISM data suggested that some investors are worried that inflation is back on the rise because the prices paid by businesses for goods and supplies came in at 64.4%, the first reading above 60% since January 2024. Fifteen of the 18 services reported an increase in prices paid, such as real estate, agriculture, forestry, fishing and hunting, construction, and more. No industry reported a decrease in prices paid in December.
When looking closely at what respondents are saying, it suggests that companies are preemptively increasing or thinking about increasing prices to prepare in advance of tariffs, instead of actual inflation picking up.
Here’s some notable quotes from the report:
- “Preparations are underway to diversify supply in the anticipation for tariffs and the effect it will have on our business.” — Accommodation & Food Services
- “New residential construction remains hampered by interest rates and affordability issues. Tariff threats from the incoming administration have been making suppliers reluctant to hold pricing for more than one year. As projects can take two-plus years, budgeting is getting difficult, similar to 2021 and 2022, when supply chain disruptions caused chaos in pricing.” — Construction
- “[There] seems to be a lot of uncertainty about tariffs and purchasing decisions. A lot of wait and see.” — Transportation & Warehousing
Fundstrat Head of Research Tom Lee has said that tariffs are a “one-time” rise and not a permanent rise in rate of change. Besides, Trump is well aware he won the election on inflation, so it’s doubtful he will look to policies that increase it.
The other economic report showed that job openings rose to 8.1 million, hitting the highest level since May. That was also way hotter than economists’ expectations of 7.65 million. The layoff rate came in flat, suggesting that while businesses aren’t hiring aggressively, they aren’t firing workers either.
Reports like this are interesting to look at to predict future business activity and trends, as they are considered to be leading indicators. But keep in mind that they can be been subject to huge revisions—a broader trend that has become especially noticeable with economic reports over the past few years.
