OPENING CALL

Markets look set to end a busy week on a quieter note, as investors turn their attention to next week's Federal Reserve's interest-rate decision.

A quarter-percentage point rate cut appears to be all but guaranteed on Wednesday. But traders will be closely watching for any hints about where the rate cycle goes from there. Some money managers believe next week's cut will be the last for at least a little while.

Stock futures advanced, with contracts tied to Nasdaq-100 leading gains.

Broadcom shares rose 15% premarket after it reported a big increase in quarterly revenue. Other chip stocks advanced, with Marvell gaining 5% premarket, while Nvidia and Advanced Micro Devices each added 1%.

Benchmark Treasury yields edged higher.

Overseas, Chinese stocks fell after China's annual Central Economic Work Conference provided few details about coming fiscal stimulus. Hong Kong's Hang Seng and the Shanghai Composite each fell around 2%.

In Europe, the Stoxx Europe 600 ticked lower.

Stocks to Watch

Costco Wholesale's fiscal first-quarter earnings beat Wall Street expectations. Shares were up 0.3% in premarket trading.

RH swung to a profit in its fiscal third quarter as revenue rose 8.1% and the stock rose 8.1% after the company said it expects fourth-quarter revenue to increase 18% to 20% from a year earlier.

ServiceTitan closed its first day of trading Thursday at $101 a share, flat with its debut price, but 42% above its initial offering price of $71. Shares were up 1% in premarket trading.

Tesla rose 0.9% in premarket trading. The stock fell 1.6% on Thursday, snapping a six-session winning streak.

Warner Bros. Discovery was down 2.3% in premarket trading, a day after rising 15% following its announcement that it was restructuring into two divisions.

Watch For:

Canada Wholesale Trade for October

Today's Headlines/Must Reads:

-U.S. Manufacturers Are Stocking Up on Imports Ahead of Tariffs

-Dollar Stores Are Flashing a Warning Sign About Lower-Income Consumers

-Crypto Bank Hopes Tide Is Turning in Washington as It Takes On the Fed

MARKET WRAPS

Forex:

The dollar hit its highest in more than two weeks against a basket of currencies after stronger-than-expected producer price data dampened prospects of many more interest-rate cuts, UniCredit Research said.

Saxo said moves in Treasury yields are the key indicator for the direction of the dollar.

The euro was trading at a 17-day low against the dollar after the ECB's rate cut, but the single currency could turn higher next week with the Fed expected to trim rates too, Danske Bank said.

The pound weakened after data showed the U.K. economy unexpectedly contracted during October.

The U.K. currency has had a good couple of weeks but its fortunes have started to reverse and this has continued after Friday's data, Monex said.

Focus will turn to next week's purchasing managers' data to see whether or not the economy is now starting to pick up.

The PMI figures "should offer some steer on whether this current soft spot for growth is set to continue into year-end."

Bonds:

HSBC said there is more potential for Treasury yields to fall once there is a clearer path for rates, HSBC said, which forecasts the 10-year yield at 3.5% for the end-2025 level.

"But we don't expect to get there in a straight line, and project the biggest decline in yields will come after the first quarter of 2025."

Uncertainties remain over policy implementation, from both the incoming administration and the Federal Reserve.

Candriam favors European rates over U.S. peers in terms of duration due to diverging monetary policy.

"The monetary policy divergence between the U.S. and Europe is expected to continue widening in 2025."

While the ECB's quantitative tightening will put additional pressure on eurozone sovereign issuance programs, the central bank could opt to increase the increment of rate cuts to 50bp from 25bp if the economic outlook worsens further, Candriam said.

Demand for ESG bonds has slowed, UniCredit Research said, with issuance expected to flatten in 2025 after solid supply growth in 2024. It added that the premium paid should still attract debut issuers, however.

Energy:

Oil was on track to gain over the week as prospects of tighter sanctions against Russia and Iran have raised market concerns over supply disruptions.

Prices were up 3%-4% on the week, boosted by Treasury Secretary Janet Yellen saying the U.S. is looking for ways to curb Russia's revenue, and Trump's national security pick vowing a return to maximum pressure on Iran. Prices have also found support in China's pledge to adopt a moderately loose monetary policy and political turmoil in the Middle East.

Metals:

Gold was being pressured by a stronger dollar ahead of the Fed's monetary policy meeting next week. Still, the metal was on track for weekly gains as elevated geopolitical tensions in Eastern Europe and the Middle East spur safe-haven demand.

"The main question for the gold market now is the pace at which the Fed will ease its policy following Donald Trump's win in the U.S. presidential election," ING said.

Gold futures may edge lower after forming a "bearish outside day" on the charts, FOREX.com and City Index said. This "now relegates Wednesday's break above $2,748/oz as a fakeout."

Base metals are poised for volatility next year, pressured by projected dollar strength and policy changes under Donald Trump, according to market watchers.

"A potential deceleration in energy transition amid Trump's policy shifts might dampen, to some extent, the 'green sentiment' that bolstered prices in 2024, most notably for copper," BMI said.

The sector's outlook remains contingent on China's economic momentum, with traders waiting for the effects of Beijing's stimulus measures.

"Any sustained pick up in metals prices will depend on the strength and speed of the rollout of the measures," ING said.

Uranium

There are few reasons to believe uranium prices can rise in the near term, UBS said, cutting its 2025 price forecast by 9% to $78/pound, and its 2026 projection by 6% to $80/pound.


TODAY'S TOP HEADLINES


Boeing Commits $1 Billion to Speed Up 787 Dreamliner Production

Boeing will invest $1 billion in its South Carolina operations to boost production of its 787 Dreamliner jets, seeking to address a growing backlog caused by problems ranging from manufacturing snafus and safety issues to a lack of parts.

The Virginia-based company said late Thursday that the outlay will go toward expansion and infrastructure upgrades to help meet higher production targets of the wide-body jet.


Why the Stock Market Could Gain Another 20% in 2025

The stock market is surging as the year winds down, and shows no sign of slowing in 2025. Investors should embrace the expanding bubble.

Investing arguably was too easy this year. Aside from a brief selloff in early August, the declines have been few and were best used as opportunities to reload. Events that should have sent shudders through the market-the presidential election, escalating conflicts overseas, and uncertainty about the path of inflation and the Federal Reserve's rate-cutting plans-elicited barely a shrug.


The Fed Is Poised to Cut Rates Next Week. But 2025 Is Another Matter.

One of my favorite things about the holiday season is the music. A spin through December just isn't complete without me getting my fill of Brenda Lee's "Rockin' Around the Christmas Tree" or Judy Garland's "Have Yourself a Merry Little Christmas."

Yet econ nerds like me don't really have any good tunes for when the calendar flips to a Federal Open Market Committee meeting.


Trump Advisers Seek to Shrink or Eliminate Bank Regulators

The Trump transition team has started to explore pathways to dramatically shrink, consolidate or even eliminate the top bank watchdogs in Washington.

In recent interviews with potential nominees to lead bank regulatory agencies, Trump advisers and officials from his newfound Department of Government Efficiency have, for example, asked whether the president-elect could abolish the Federal Deposit Insurance Corp., people familiar with the matter said.


China Officials Vow They Have Economy's Back-but Still Don't Say How

After a bout of optimism earlier in the week that Chinese officials would offer more concrete plans to steady the economy, a readout from China's annual Central Economic Work Conference left investors wanting.

The readout from the meeting-which sets China's economic policy stance for the following year-offered another round of strong language about helping the economy but lacked detail on any plans. Chinese stocks returned about half of the gains logged on Monday in anticipation of bigger stimulus, and were roughly flat on Thursday, with the iShares MSCI China up just 0.05% to $48.87.


Trump Team Weighs Options, Including Airstrikes, to Stop Iran's Nuclear Program

President-elect Donald Trump is weighing options for stopping Iran from being able to build a nuclear weapon, including the possibility of preventive airstrikes, a move that would break with the longstanding policy of containing Tehran with diplomacy and sanctions.

The military-strike option against nuclear facilities is now under more serious review by some members of his transition team, who are weighing the fall of the regime of President Bashar al-Assad-Tehran's ally-in Syria, the future of U.S. troops in the region, and Israel's decimation of regime proxy militias Hezbollah and Hamas. Iran's weakened regional position and recent revelations of Tehran's burgeoning nuclear work have turbocharged sensitive internal discussions, transition officials said. All deliberation on the issue, however, remains in the early stages.


Trump's Inauguration Won't Have Xi Jinping Among the Guests

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