Five things you need to know before the market opens on Monday December 12:
1. -- Stock Futures Edge Higher Into End-of-Year Push
U.S. equity futures edged higher Monday as investors moved cautiously into the final trading week of the year focused on the Federal Reserve's pending rate decision and renewed concerns for recession in the world's biggest economy.
Investors will navigate a host of key data releases this week, including a Commerce Department estimate of consumer price inflation tomorrow, as they head towards the holiday-shortened trading period to close out what has been a difficult year for U.S. stocks, with the S&P 500 down 17.5% and the Nasdaq Composite down nearly 30%.
Friday's hotter-than-expected producer price inflation data continues to linger within markets, as well, with analysts worried the factory gate pressures will work their way into consumer prices, a move that could consolidate the Fed's hawkish signaling on rates heading into the start of next year.
At the same time, Treasury bond yields continue to flash recession warnings, with benchmark 10-year Treasury note yields holding at 3.543% head of today's $32 billion auction, a level that is around 79 basis points south of 2-year notes.
According to a study from the San Francisco Federal Reserve, a sustained inverted yield curve has preceded all of the nine recessions the U.S. economy has suffered since 1955, making it an extremely accurate barometer of financial markets sentiment.
Heading into the start of the trading day on Wall Street, futures tied to the S&P 500 are priced for a 9 point opening bell gain while those linked to the Dow Jones Industrial Average are indicating a 55 point bump. The tech-heavy Nasdaq is priced for a 29 point advance.
Overnight in Asia, stocks were on the back foot following both Friday's sell-off on Wall Street and concerns that the loosening of China's Covid restrictions would trigger a wave of new infections in the world's second-largest economy.
In Europe, surging power prices heading into a week-long cold snap rekindled worries of a near-term slowdown, pulling the region-wide Stoxx 600 0.5% lower in early Frankfurt trading.
Global oil prices were marked modestly lower heading into the New York session, as traders weighed the prospect of weaker China demand against supply concerns linked to the ongoing shutdown of the Keystone Pipeline connecting Canadian drillers to the U.S. Gulf.
Brent crude contracts for February delivery, the global benchmark, fell 71 cents to $75.39 per barrel while WTI contracts for January were marked 62 cents lower at $70.40 per barrel.
2. -- Week Ahead: Fed Meeting Highlights Crucial Series of Central Bank Decisions
Three key central bank rate meetings, as well as a crucial inflation reading, will dominate headlines over the course of the final full trading week of the year, with investors focused on the Fed's December rate decision Wednesday afternoon.
Both the Bank of England and the European Central Bank are likely to confirm expected rate hikes of 50 basis points on Thursday, taking their benchmark borrowing rates to 3.5% and 2.5% respectively, as policymakers in major economies around the world continue to grapple with surging inflation and slowing economic growth.
The Fed decision Wednesday will be preceded by what is likely to be a closely-tracked November inflation reading from the Commerce Department on Tuesday, with analysts looking for a modestly easing in both headline and core inflation pressures. Retail sales data for November will follow on Friday.
Another market focus could be Monday's $32 billion 10-year note auction, given its proximity to both the Fed rate decision and last week's sharp pullback in bond yields. Friday's first look at November PMI readings will also be in focus amid renewed concerns for a near-term recession in the world's biggest economy.
The earnings calendar is light, with updates expected from Oracle (ORCL), Lennar (LEN), Adobe (ADBE) and Darden Restaurants (DRI).
3. -- Boeing Shares Rise On Report of Air India 737 Max Deal
Boeing (BA) shares edged higher in pre-market trading following weekend reports that suggest the planemaker is close to agreeing a massive aircraft deal with Air India.
Reuters reported Sunday that Air India, the Asia-region's biggest carrier outside of China, is preparing to place an order for around 500 planes from both Boeing and its European rival Airbus. The purchase, which could include both narrow and wide-body jets, could be worth tens of billions of dollars at current list prices. India's Economic Times reported the deal could include 50 737 Max jets, with an option for a further 150 of the redesigned aircraft.
Boeing is also likely to confirm a major 787 Dreamliner order with United Airlines UAL, with the carrier scheduling what it said would be an 'historic announcement' on Tuesday.
Boeing shares were marked 0.37% higher in pre-market trading to indicate an opening bell price of $180.20 each.
4. -- Microsoft Takes 4% Stake In London Stock Exchange Group
Microsoft (MSFT) shares edged lower in pre-market trading after the world's second-largest tech company said it would take a 4% stake in the London Stock Exchange as part of a deal to move its data platform into its cloud computing structure.
The London Stock Exchange Group, which recently completed a $27 billion deal with Blackstone and a consortium lead by Thomson Reuters to buy the Refinitiv data platform, agreed to pay Microsoft $2.8 billion in fees over the life of a ten year contract to migrate onto the cloud - as well as surrendering the 4% equity stake valued at around $2 billion.
"We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyze, and trade securities around the world, and create substantial value over time. We look forward to delivering on that potential," said LSEG CEO David Schwimmer.
Microsoft shares were marked 0.13% lower in pre-market trading to indicate an opening bell price of $245.10 each. LSEG group shares were up 4.02% in London trading.
5. -- Horizon Therapeutics Surges On Report of $26 Billion Amgen Takeover
Horizon Therapeutics (HZNP) shares surged higher in pre-market trading following reports that the drugmaker has a agreed to a $26 billion takeover by Amgen (AMGN).
Bloomberg reported that Amgen will pay $116.50 per share for Dublin, Ireland-based Horizon, a 20% premium to the group's Friday closing price, after France's Sanofi said it was no longer interested in pursuing the autoimmune and inflammatory disease specialists.
Horizon had also said that Johnson & Johnson (JNJ), via its Janssen Global Services unit, had expressed a buyout interest in the group, but exited the race last week. Horizon's best-selling drug, Tepezza, which is used to treat thyroid eye disease, is expected to generate $4 billion in annual sales over the coming years.
Horizon shares were marked 13.1% higher in pre-market trading to indicate an opening bell price of $110.10 each.
