U.S. stock futures demonstrated a positive trend on Monday, rebounding from a period of losses recorded the previous week. The premarket trading data showed increases across all four major indices, suggesting a renewed investor confidence and activity on Wall Street. As reported by Benzinga, the Nasdaq 100 futures rose by 0.70%, the S&P 500 increased by 0.42%, while the Dow Jones and Russell 2000 saw more modest gains of 0.04% and 0.10%, respectively.
This week has been truncated, with the U.S. markets scheduled to remain closed on Thursday, January 9, in observance of the national day of mourning for former President Jimmy Carter. The yields of the 10-year and two-year Treasury notes have been reported at 4.61% and 4.27%, respectively, indicating stability in the bond market. According to the CME Group’s FedWatch tool, there is a 90.9% probability of no change in interest rates during the Federal Reserve’s upcoming decision on January 31, 2025.
Friday's trading session witnessed a strong comeback for equity markets, marking the end of a five-day decline—the longest losing streak since April. Positive economic indicators contributed to this turnaround, particularly an ISM Manufacturing PMI data release that revealed unexpected growth in the manufacturing sector. This was the second consecutive month of manufacturing expansion, which may suggest resilience in the economic landscape. U.S. automakers notably benefited from the positive sentiment surrounding fourth-quarter delivery forecasts, leading to significant movements in stock prices within the consumer discretionary sector.
Market analysts provided insights into potential market trajectories. Ryan Detrick, chief market strategist at Carson Research, noted that historically, average annual returns tend to be higher in years that exhibit declines on the first or last days of the year. Ed Yardeni, a leading economist at Yardeni Research, anticipates strong labour market indicators ahead and indicates that as long as corporate earnings continue to grow, hiring activities will likely increase, leading to enhanced real wages. He pointed out that during the upcoming earnings reporting season, particularly that of major banks, discussions on the role of artificial intelligence in boosting productivity are expected, with companies attempting to position themselves as technology-oriented, whether they produce AI hardware or utilise AI in their operations.
In terms of market-specific trends, Louis Navellier of Navellier and Associates remarked that stocks are primarily influenced by earnings prospects, which remain robust for technology giants displaying substantial cash flows that are minimally impacted by interest rate variations. However, he noted that while AI presents real opportunities for productivity improvement, it might also result in reduced employment needs for achieving similar outputs.
The week ahead will provide several critical economic data releases that could shape investor decisions. Key indicators include the final US services PMI for December, factory orders data, and ISM services data, all scheduled for Monday and Tuesday. Additionally, the Richmond Fed President will offer insights during a speech, while major employment-related data is expected to be released mid-week.
Several stocks garnered investor attention due to their performance. Nvidia Corp appeared strong in premarket trading, rising by 1.87% ahead of CEO Jensen Huang's highly anticipated keynote speech at CES 2025. Robotics stocks, including Nauticus Robotics Inc and Microbot Medical Inc, recorded significant increases, with Nauticus rising 95.26%. General Motors and Ford Motor Co reported year-on-year sales growth exceeding 4%, marking their highest performance since 2019, reflecting positively on their stock prices as well.
On the commodities front, crude oil futures saw a slight decline, while the gold index and Dollar Index also experienced decreasing values. Global equity markets exhibited mixed outcomes with notable declines in key Asian indices, contrasting with gains in some Australian and South Korean markets. As these trends continue to evolve, market participants will be closely monitoring the economic indicators and corporate earnings discussions related to AI advancements in the business sector.
Source: Noah Wire Services