S&P 500 futures dipped slightly on Monday morning as investors prepared for the final month of 2024, hoping for a Santa Claus rally to end the year. This follows a strong performance in both the past week and month, largely driven by a postelection rally after President-elect Donald Trump’s victory. Investors are keenly awaiting Monday’s economic data on manufacturing and construction spending, which will set the tone for the week. Additionally, a series of important labor data releases are expected later in the week. Market participants will also be paying close attention to speeches from Federal Reserve Governor Christopher Waller and New York Fed President John Williams for further insights into the economic outlook.

European markets opened higher on Monday as investors kept a close watch on the global economic and interest rate outlooks, heading into the final trading month of the year. Shares of Stellantis, the maker of Jeep, dropped by 8% following the unexpected resignation of CEO Carlos Tavares over the weekend. Meanwhile, recent data indicated a decline in manufacturing sector activity in both the euro zone and the U.K., although the unemployment rate in the European Union remained stable in October. Additionally, markets are on edge due to the latest tariff threats from U.S. President-elect Donald Trump, raising concerns about a potential escalation in trade tensions in 2025.

Asia-Pacific markets saw a positive start to the week on Monday, with most indices trading higher as investors turned their attention to a series of economic reports from key countries in the region, including Japan, South Korea, and China. Over the weekend, China reported its November Manufacturing PMI at 50.3, indicating slight expansion in the sector. Australia’s S&P/ASX 200 edged up by 0.14%, while South Korea’s Kospi rose by 0.35%. Japan’s Nikkei 225 experienced a notable increase of 0.8%, and Hong Kong’s Hang Seng index gained 0.65%. This data-heavy week has investors closely monitoring these economic indicators for further market direction.

Economic Calendar

Earnings Calendar

Notable reports for Monday before the bell include CRDO & ZS. After the bell reports include BNS, CNM, & DCI.

News & Technicals’

Joe Biden pardoned his son Hunter Sunday night, a reversal for the president, who repeatedly said he would not use his executive authority to pardon his son or commute his sentence. The president issued a “full and unconditional pardon” for any offenses Hunter Biden has “committed or may have committed or taken part in during the period from January 1, 2014, through December 1, 2024,” according to the White House statement. Hunter Biden was scheduled to be sentenced on Dec. 12 for his conviction on federal gun charges. He also was set to be sentenced on Dec. 16 in a separate criminal case in which he pleaded guilty to federal tax evasion charges in September.

Volkswagen plants across Germany experienced significant disruptions on Monday as workers staged strikes for several hours at a time. The strikes affected nine of Volkswagen’s car and component factories, leading to temporary halts in production and shortened shifts. These warning strikes highlight escalating tensions between the company and its workforce over proposed changes to labor agreements and the looming threat of factory closures. The demonstrations underscore the growing unrest among employees as they push back against potential changes that could impact on their job security and working conditions.

Big-box retailers are increasingly adopting smaller-footprint stores as part of their strategy to offer diverse shopping experiences. Ikea is the latest to join this trend, following in the footsteps of Target, Macy’s, and Nordstrom, which have all introduced smaller locations in recent years. Walmart pioneered this concept over a decade ago with its Express stores, and the last remaining Kmart in the U.S. also operates as a smaller format store. Data indicates that these compact stores can attract a more affluent demographic, although the shift is often driven by specific location needs and targeted expansion strategies. This approach allows retailers to adapt to changing consumer preferences and urban space constraints while maintaining a strong market presence.

Stellantis CEO Carlos Tavares unexpectedly resigned from the automaker, citing increasingly divergent views between himself and the board of directors. According to Henri de Castries, Stellantis’ senior independent director, the company’s success has historically been due to strong alignment among shareholders, the board, and the CEO. However, recent differences led to the decision for Tavares to step down. Following the announcement, U.S.-traded shares of Stellantis dropped approximately 8% in premarket trading on Monday. Prior to this, the stock had already declined by about 43% in 2024, reflecting broader challenges faced by the company.

Though many are hopeful for a Santa Claus rally remember volumes could be light with the distraction on Cyber Monday sales and the many folks extending their vacation time with family. Jobs data with be the theme of the week culminating in the Employment Situation report on Friday morning.  We also have a busy week of Fed speeches with the Jerome Powell himself on Wednesday.

Trade Wisely,

Doug