Stocks could benefit today from investors adding new positions for the new year, as markets await the Fed's minutes for any clues on what the central bank is looking for from the incoming Trump administration. Economic stimulus? Tax reform? Reduced regulation? At its last meeting, the Fed raised rates for the second time in a decade and provided an outlook for three rate hikes in 2017. U.S. stock index futures are all up by 0.2%, building on yesterday's gains.
Consumer prices across the eurozone reached a high not seen for almost four years, jumping 1.1% in December, mainly supported by a surge in energy prices. It's good news for the ECB, which has a current inflation target of just below 2%. Data overnight also showed a strong end of year for euro area business activity, with the bloc's final composite PMI climbing to 54.4 last month, the highest level since May 2011. Euro +0.3% to $1.0436.
Turkey's parliament has voted to extend the government's state of emergency powers for three months following the New Year's nightclub attack claimed by Islamic State. At least 39 people, most of them foreign tourists, were shot dead early on Sunday morning by a lone gunman who remains at large. The country is struggling to contain terrorist threats with depleted law enforcement ranks in the wake of last year's failed coup.
Japanese factory activity expanded at the fastest pace in a year in December as orders picked up, in an encouraging sign that the struggling economy may be regaining momentum. The final Markit/Nikkei Manufacturing PMI rose to 52.4 on a seasonally adjusted basis, higher than a preliminary reading of 51.9 and a final 51.3 in November. The Nikkei closed up 2.5% on the news.
Less than two hours after his tweet, House Republicans dropped plans to gut the Office of Congressional Ethics after President-elect Trump criticized the plan. "With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it may be, their number one act and priority. Focus on tax reform, healthcare and so many other things of far greater importance!"
Today's auto sales figures for December may be enough to eke out a seventh straight year of gains, edging past last year's record of 17.5M cars and trucks, but investors are debating whether the momentum will carry into 2017. Some automakers are trimming production because excess vehicles are sitting on dealer lots. General Motors (NYSE:GM) even recently announced its first layoffs since 2010, eliminating about 2,000 jobs at two plants in Michigan and one in Ohio.
Tesla -3% premarket after missing its own guidance for vehicle deliveries in 2016. The electric automaker delivered 76,230 vehicles, falling just shy of its goal of 80,000-90,000. Production challenges meant that it ran out of time before the year-end, but Tesla (NASDAQ:TSLA) cautioned that the numbers "should be viewed as conservative" because it only counts a car as delivered if it's received by the customer and the paperwork is all correct.
Canceling plans to build a new $1.6B plant in Mexico, Ford (NYSE:F) said it will invest $700M in Michigan instead, creating 700 new U.S. jobs. CEO Mark Fields said the investment is a "vote of confidence" in the pro-business environment being created by Donald Trump, but stressed Ford didn't cut a special deal with the President-elect. The automaker was a frequent target of Trump's election campaign for its "south of the border" manufacturing and payment of low tariffs.
Megyn Kelly is leaving the Fox News Channel (FOX, FOXA) for an extensive role at NBC News (NASDAQ:CMCSA). As part of the multiyear agreement, Kelly will host her own one-hour daytime program, anchor an in-depth Sunday news magazine show and be a regular contributor to special events coverage. She'll continue hosting The Kelly File through the end of the week, with her last show airing on Friday.
Rogue One: A Star Wars Story led domestic films at the box office for the holiday weekend and gave Walt Disney (NYSE:DIS) its final push toward a unique milestone: the first studio ever to mark a $3B year at the domestic box office. Last month, Disney surpassed $7B in worldwide ticket sales, also a first for a studio. Its other big hits this year included Finding Dory and Captain America: Civil War.
Taking the stage at CES 2017, Qualcomm (NASDAQ:QCOM) took the wraps off its Snapdragon 835 mobile processor, which is expected to be in devices launching in the first half of this year. The company touted its improved battery life and smaller size, but also views it as a "connected device" chip that includes features designed to process images and sound for augmented and virtual reality.
Mark Zuckerberg's New Year's resolution: "To connect with more Americans in an effort to mend societal divisions wrought by the twin forces of technology and globalization," he said in a Facebook (NASDAQ:FB) post. To accomplish the task he will visit and meet people in every U.S. state by the end of the year. "It will help me lead the work at Facebook... so we can make the most positive impact as the world enters an important new period."
Six months after announcing a major fulfillment center in Jacksonville, FL, Amazon (NASDAQ:AMZN) is again choosing the city for another facility that will create an additional 1,000 jobs. That brings the company's announced footprint in Jacksonville to a total of 2,500 employees and more than 4,000 full-time staff in the Sunshine State.
U.S. District Judge Ed Kinkeade has almost halved the $1B award of a jury verdict that ordered Johnson & Johnson (NYSE:JNJ) to pay to plaintiffs who were injured by its DePuy unit's hip implants. He cited "constitutional considerations" that limit how much can be recovered in punitive damages, but upheld the jury's findings that Pinnacle implants were badly designed and the companies hid their risks.
Toshiba shares fell more than 5% in early trade following reports that Japan's securities watchdog suspected the conglomerate of misreporting profits by ¥40B ($340M) over three years. The revelations add to a series of accounting troubles swirling around Toshiba (OTCPK:TOSYY), which was downgraded by ratings agencies last week after it admitted it may face a multi-billion dollar writedown over its U.S. nuclear business.
Exxon Mobil and Rex Tillerson have agreed to sever all ties to comply with conflict-of-interest requirements as the firm's former CEO awaits confirmation as U.S. Secretary of State. If appointed, his $180M retirement package will be transferred to an independently managed trust. Tillerson will also surrender entitlement to more than $4.1M in cash bonuses and sell the more than 600,000 Exxon (NYSE:XOM) shares he still owns in the company.
In Asia, Japan +2.5%. Hong Kong -0.1%. China +0.7%. India flat.
In Europe, at midday, London -0.1%. Paris -0.1%. Frankfurt -0.3%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.2% to $52.44. Gold +0.4% to $1166.70.
Ten-year Treasury Yield flat at 2.45%
Today's Economic Calendar
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Gallup U.S. Job Creation Index
8:55 Redbook Chain Store Sales
2:00 PM Gallup US Consumer Spending Measure
2:00 PM FOMC minutes