Stock futures rose on Monday as Wall Street aimed to extend last week’s impressive rally to new record highs. This follows a remarkable week for U.S. stocks, with the Dow, S&P 500, and Nasdaq all closing at all-time highs. The Dow and S&P 500 had their strongest weeks in about a year, with the Dow briefly surpassing 44,000 for the first time. While no significant economic data is expected on Monday, investors are eagerly anticipating inflation reports due later in the week. Additionally, companies like Live Nation, the parent of Ticketmaster, and Aramark, a food and facility service provider, are set to report their earnings on Monday.

European stocks opened the week on a positive note, with the pan-European Stoxx 600 index trading higher on Monday. This uptick comes as investors brace for a busy week filled with key economic data releases, including inflation figures from Germany and the U.S., as well as GDP data from the U.K. Leading the gains were construction and materials stocks, which rose by over 1.8%. Despite this positive start, it’s worth noting that the benchmark index recorded its third consecutive weekly loss by the end of last week, reflecting ongoing market volatility.

Asia-Pacific markets experienced a downturn on Monday following China’s latest stimulus measures, which failed to meet expectations and raised concerns about the recovery of the world’s second-largest economy. Japan’s benchmark Nikkei 225 showed a slight increase, closing at 39,533.32, while the broader Topix index dipped by 0.09% to 2,739.68. In contrast, Hong Kong’s Hang Seng index saw a significant decline of 1.62%, South Korea’s Kospi dropped by 1.15%, and Australia’s S&P/ASX 200 fell by 0.43%. This mixed performance highlights the ongoing uncertainty in the region’s markets.

Economic Calendar

Earnings Calendar

Notable reports for Thursday before the bell include ARMK, & MNDY. After the bell reports include AROC, AGO, JRVR. KYTX, LAZR, NVRO, TALO, & ZETA.

News & Technicals’

In a recent filing with a Delaware court, FTX highlighted a 2021 transaction where Binance, along with its CEO Changpeng Zhao and others, divested their investment in FTX. This involved selling a 20% stake in FTX and an 18.4% stake in its U.S.-based entity, West Realm Shires, back to the company. This litigation represents the latest escalation in the ongoing tensions between two of the largest players in the cryptocurrency market, following the dramatic collapse of FTX that sent shockwaves through the industry.

In a research note last week, Citi strategists pointed out that cryptocurrency remains one of the “few Trump trades that has yet to retrace.” During his campaign, President-elect Donald Trump made numerous promises to the crypto industry, including a bold pledge to make the U.S. the “crypto capital of the planet.” Looking forward, some analysts are optimistic about the continued rise of cryptocurrencies, with several predicting that bitcoin could reach the $100,000 milestone by the end of the year.

Last month, policymakers introduced new subsidies and tax breaks aimed at supporting households with children under the age of three. However, analysts have pointed out that these measures primarily benefit existing families rather than incentivizing the formation of new ones. Additionally, the success of these policies heavily depends on the capacity of local governments to effectively implement them. This comes at a time when the United Nations has projected a significant demographic shift for China, predicting that the country, currently the second most populous in the world, could see its population decline by more than half by 2100, marking the steepest drop of any nation.

Thought the impressive rally continues this morning with another gap up open keep in mind that the banks and bond markets are closed today so choppy conditions would not be a surprise after the open.  The IWM is the only index not at record highs and there appears to be concerted efforts to push toward that goal this morning.  That said, the parabolic nature of the current rally also warrants a bit of caution not to case already extended stocks and be watching for a profit-taking pullback that could begin at any time.

Trade Wisely,

Doug