Stock futures showed mixed results on Monday as Wall Street braced for a week of major earnings reports, following a challenging period for the three main benchmarks. Investor concerns about the trajectory of interest rates remain high, especially after Federal Reserve Chair Jerome Powell indicated on Thursday that the central bank is not in a rush to cut rates due to the economy’s robust growth and strong labor market. Currently, most investors are anticipating a year-end overnight lending rate between 4.25% and 4.50%. This week’s key market driver will be Nvidia’s earnings report, scheduled for release on Wednesday.

European markets experienced a downturn on Monday as investors shifted their focus to upcoming regional inflation data. The European Stoxx 600 index fell by 0.22%, with most major regional bourses and sectors seeing declines. Retail stocks were the hardest hit, dropping by 0.73%, while food and beverage stocks managed a modest gain of 0.29%. This week, market participants are keenly awaiting several significant data releases, including the latest U.K. inflation figures on Wednesday and the final reading of the euro zone consumer price index. Additionally, a series of purchasing managers’ index reports from various regions are scheduled for Friday.

Asia-Pacific stocks showed a mixed performance on Monday, reflecting a cautious market sentiment ahead of key economic data releases this week. In China, the loan prime rate (LPR) announcement on Wednesday is anticipated to remain unchanged, with the one-year rate at 3.1% and the five-year rate at 3.6%, according to ING. Japan is set to release its trade data on Wednesday, followed by October’s headline inflation figures on Friday, which will provide insights into the country’s economic health. Additionally, the Reserve Bank of Australia will publish the minutes from its recent meeting on Tuesday, offering further clues on the central bank’s policy direction.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include BRC, & TWST. After the bell reports include ACM, BRBR, & SYM.

News & Technicals’

Tencent Cloud is strategically utilizing the WeChat ecosystem to differentiate itself from other cloud service providers, according to CEO Dowson Tong. He noted that numerous Tencent clients are eager to develop their own mini programs within WeChat’s network to draw in the app’s extensive user base. This unique integration with WeChat, Tong emphasized, sets Tencent Cloud apart from many other online platforms. Meanwhile, the cloud service market is dominated by Microsoft Azure, Amazon Web Services, and Google Cloud Platform, which collectively hold 68% of the market share.

Tesla shares surged on Monday after reports emerged that President-elect Donald Trump’s transition team plans to prioritize creating a federal framework for regulating self-driving vehicles within the U.S. Transport Department. Elon Musk, a prominent advocate for Trump’s return to the White House during the recent elections, has been appointed by Trump, along with former Republican presidential candidate Vivek Ramaswamy, to head the newly established Department of Government Efficiency. This development has bolstered investor confidence in Tesla, reflecting optimism about the future regulatory environment for autonomous vehicles.

The boxing match between Jake Paul and Mike Tyson made history, with Netflix reporting that 60 million households tuned in, reaching a peak of 65 million concurrent streams. According to Most Valuable Promotions, gate receipts for the event exceeded $18 million, marking the highest revenue for a fight held outside of Las Vegas. This record-breaking event highlights the immense popularity and commercial success of the bout.

Spirit Airlines’ CEO reassured customers that they can continue booking tickets despite the company’s recent challenges. Following a failed acquisition attempt by JetBlue Airways, a significant engine recall by Pratt & Whitney, and weaker-than-expected sales, Spirit has been grappling with mounting losses. Additionally, the airline is under pressure to renegotiate $1.1 billion in debt payments due next year. Despite these hurdles, the CEO’s statement aims to maintain customer confidence and stability in the airline’s operations.

Although the earnings season is winding down, we still have some major earnings reports this week that could determine if the bulls can hold on to the upper hand or if the bears find an opening to attack.  Tuesday, we get WMT and but the most anticipated will be the report from NVDA on Wednesday.  This report could shake the market out of the postelection hangover we experienced last week.  On the other hand if the report disappoints the bears could push to fill the index gaps below. 

Trade Wisely,

Doug