Market Overview - U.S. stock futures are trending higher, with S&P 500 futures up 0.6%, Nasdaq 100 futures up 0.7%, and Dow Jones Industrial Average futures up 0.5% [1] - This upward movement indicates a "dip-buying" mentality as investors balance concerns over AI valuations with a strong domestic economy and potential global trade shifts [2] Index Performance - Major market indexes are looking to build on gains, with S&P 500 near 6,843, Nasdaq Composite around 22,578, and Dow Jones Industrial Average near 49,553 [3] Sector Trends - The broader market is affected by a rotation out of software-as-a-service stocks due to AI disruption, while defensive sectors like Utilities and Health Care show strength [4] - Current trends suggest a potential return to growth-oriented sectors if economic data supports a "soft landing" narrative [4] Economic Catalysts - Focus is on the release of FOMC minutes at 2:00 PM ET, with traders looking for insights on interest rate cuts [5] - Economic data to be released at 8:30 AM ET includes January Building Permits (expected at 1.400M) and Durable Goods Orders, forecasted to show a 1.7% decline [6] Corporate News - Nvidia remains a key market bellwether, with premarket interest surrounding its $4.66 trillion valuation ahead of its earnings report on February 25 [7] - Paramount Global shares rose nearly 5% amid a bidding war, while Amazon seeks to recover from recent pressures [8] - General Mills stock fell 7% due to concerns over consumer sentiment, while Tesla and Meta Platforms see modest gains [9] International Developments - A $550 billion Japan-U.S. trade deal is expected to benefit American industrial stocks, enhancing domestic capital investment [10]

More inflation data coming as signs suggest soft landing, shipping giant to buy U.S.-listed ZIM in $4.2 billion deal, and more news to start your day. ...

Core Insights - The article emphasizes that the current healthy labor market and cooling inflation reduce the immediate need for interest-rate cuts [1] Labor Market - The labor market remains robust, indicating strong employment figures and job growth, which supports consumer spending and economic stability [1] - Unemployment rates are low, contributing to a positive economic outlook [1] Inflation Trends - Inflation is showing signs of cooling, which alleviates pressure on the Federal Reserve to implement aggressive interest-rate cuts [1] - The moderation in inflation rates suggests that the economy may be stabilizing, allowing for a more measured approach to monetary policy [1]

Group 1 - The upcoming earnings reports from major banks like Morgan Stanley, Goldman Sachs, PNC Financial, and U.S. Bancorp are crucial for assessing the health of the American consumer and the regional lending landscape [1][3] - Morgan Stanley and Goldman Sachs are larger institutions that significantly influence the S&P 500 Index and various financial sector ETFs, while PNC and U.S. Bancorp represent key regional players focused on traditional lending [2][6] - The market is particularly interested in the net interest income trajectories of these banks, as well as updates on credit loss provisions, which could indicate their outlook on economic conditions [3] Group 2 - Morgan Stanley's wealth management division has provided stability, making it a smoother investment compared to Goldman Sachs, which is a major component of the Dow Jones Industrial Average [5] - The anticipated "thaw" in the deal-making environment for 2026 suggests a potential increase in mergers and acquisitions and initial public offerings, driven by pent-up demand [4] - PNC and U.S. Bancorp are seen as a reality check for the regional banking sector, focusing on mortgages, auto loans, and small business credit rather than high-profile M&A activities [6]

Core Viewpoint - Jerome Powell, the chair of the US Federal Reserve, is facing a criminal investigation instigated by the Trump administration, which he has publicly stated he will not back down from [2][12][14] Group 1: Powell's Position and Response - Powell has emphasized his commitment to the Federal Reserve's independence, stating he has served under both Republican and Democratic administrations without political bias [3][6] - He has faced ongoing pressure from the Trump administration to lower interest rates, which he has resisted, highlighting the importance of maintaining the Fed's autonomy [10][12] - The criminal investigation is perceived by Powell as a pretext for political pressure, indicating a significant threat to the independence of the Federal Reserve [12][13][14] Group 2: Economic Context and Performance - Powell has been recognized for his management of the economy during challenging times, including the COVID-19 pandemic and rising inflation, achieving a "soft landing" by reducing inflation from a peak of 9.1% in summer 2022 to 2.3% by April [8] - The unemployment rate has remained steady at 4.2%, showcasing Powell's ability to navigate economic challenges while maintaining employment levels [8] - The Federal Reserve was established to operate independently from political influence, a principle Powell has defended throughout his tenure [6][7]

Core Viewpoint - Bank of America indicates that the Federal Reserve is unlikely to continue cutting interest rates, with expectations of rates remaining unchanged during Jerome Powell's tenure until May 2026 [1][2][6] Interest Rate Outlook - Economists at Bank of America predict that the Fed will maintain interest rates at its January 28 meeting and potentially throughout Powell's term, aligning with the Fed's December dot plot which suggests only one rate cut in 2026 [2][4] - The CME's FedWatch tool reflects that traders have pushed the timeline for any significant rate relief to June at the earliest [2] Impact on Borrowers - The current situation poses challenges for homebuyers and families looking to refinance, as the anticipated relief from rate cuts may have already occurred, leaving borrowers in a "higher-for-longer" environment [3][4] - The December jobs report indicated a decrease in the unemployment rate to 4.4%, which is expected to keep the Fed on hold in January, reinforcing the view that no further cuts will occur under Powell [4][6] Economic Context - The Fed's dual mandate of low inflation and low unemployment faced significant challenges in 2025, with inflation rising from 2.3% in April to 2.7% in November, while unemployment peaked at 4.6% before a recent decline [4][5] - Powell's cautious approach to rate cuts, particularly in light of inflation concerns, may have contributed to his precarious position as his term nears its end [5][6]

Core Viewpoint - Markets are currently positioned for a soft landing, but there are concerns that pent-up demand and renewed fiscal spending could lead to higher growth and inflation than anticipated [1] Group 1 - Strategists are warning that the combination of pent-up demand and increased fiscal spending may push economic growth beyond expectations [1] - The potential for inflation to rise due to these factors is also highlighted, indicating a need for careful monitoring [1]

Market Overview - U.S. financial markets are closed on December 25, 2025, for the Christmas holiday, with trading set to resume on December 26, 2025 [1] - Major indexes experienced a record-setting trading session on Christmas Eve, with the S&P 500 and Dow Jones reaching all-time highs [2] Major Market Indexes Performance - The S&P 500 closed at 6,932.05 points, up 0.3%, marking its 39th record close of 2025 and fifth consecutive day of gains [2] - The Dow Jones Industrial Average rose 0.6% to 48,731.16, achieving a new record [2] - The Nasdaq Composite increased by 0.2% to close at 23,613.31, supported by a rebound in AI-related stocks [2] Premarket Activity and Futures Outlook - Premarket activity for December 26 indicated a muted start, with stock futures for major indexes largely unchanged or slightly lower [3] - This reflects typical holiday trading patterns, with many investors having closed positions for the year, resulting in thinner liquidity [3] Upcoming Economic Data - Key economic data releases are expected post-Christmas, including the jobless claims report on December 26, which will provide insights into the labor market [4] - Revised Q3 GDP figures showed an unexpected increase to 4.3% growth, up from 3.8% in the previous quarter [4] - The PCE price index rose to 2.8% in Q3, indicating inflationary pressures [4] Federal Reserve Insights - The minutes from the Federal Reserve's upcoming meeting in January will be closely monitored for future interest rate policy indications [5] - Analysts predict the Fed will maintain steady rates in January, with expectations for early 2026 rate cuts diminishing due to persistent inflation [5] Corporate Developments - Dynavax Technologies shares surged by 38.2% following Sanofi's announcement of a $2.2 billion acquisition [6] - Novo Nordisk A/S stock rose 7.3% after FDA approval of its GLP-1 pill, despite a year-to-date decline of nearly 40% due to competition [6] - ServiceNow Inc. shares fell 1.5% after confirming its acquisition of Armis for $7.75 billion [6] - BP p.l.c. announced the sale of a 65% stake in its Castrol lubricants division to Stonepeak for approximately $10.1 billion [6] Notable Stock Movements - Nike (NKE) stock rose 4.6% after Apple CEO Tim Cook purchased nearly $3 million worth of shares [10] - Tesla (TSLA) is under investigation by a U.S. regulator for potential defects in the Model 3 door release mechanism [10] - Alphabet (GOOGL) announced software updates for its Waymo self-driving cars to enhance navigation capabilities [10] - Other notable movements included gains for Huntington Ingalls Industries Inc. and ZIM Integrated Shipping Services Ltd. [10]

Scott Croniner joins us from uh city. He's US equity strategist. Scott, not to ask how much you can deadlift, but feel free to offer, you know, [laughter] >> let's just say, Kelly, I can lift my weight, but that's about it.>> Which is looking like a little less than that. All right. So, you do think a more dovish Fed is is a plank of this bull market story.>> Yeah, it's it's kind of interesting. We just published a note that hit a few minutes ago that I I titled uh the data is dead, long live the data. And ...

Core Insights - The latest Global Fund Manager Survey from Bank of America indicates that professional investor sentiment is at its highest level in years, with cash levels dropping to 3.3%, the lowest in the survey's history, signaling a strong inclination towards risk-taking [2][3] Investor Sentiment - A net 42% of fund managers are overweight in equities, the highest since December 2024, while commodities show a net 18% overweight, the strongest since September 2022, reflecting a broader shift into these asset classes [3] - Investor optimism is linked to expectations of a resilient global economy, with 57% of respondents forecasting a soft landing by 2026 and only 3% expecting a hard landing, the lowest since mid-2021 [4] Economic Conditions - Global growth and profit expectations are at their highest since August 2021, and liquidity conditions are rated as the third-best in the past 17 years, indicating a favorable environment for investment [4] Implications for Crypto - The extreme positive sentiment in traditional markets may suggest a potential pullback, which could lead to deeper losses for Bitcoin and cryptocurrencies, given their correlation with the Nasdaq [5] - Conversely, a broad stock decline could accelerate the Federal Reserve's rate-cutting plans, potentially providing the liquidity needed to reignite the crypto bull market [6]