OPENING CALL

Stock futures rose early Monday, with global chip stocks rallying following strong earnings from a key assembler of Nvidia and Apple products.

Taiwan's Foxconn posted record quarterly revenue, buoyed by strong demand for servers to power artificial intelligence. Nvidia and other chip stocks including Advanced Micro Devices and Micron Technology rose premarket, suggesting AI-fueled stock mania may still have room to run.

Global markets diverged. South Korea's Kospi gained 1.9%, while the Nikkei 225 in Tokyo fell 1.5%, on its first day of trading for 2025. The Stoxx Europe 600 edged up.

The 10-year Treasury yield advanced above 4.6%, after settling Friday at 4.596%.

Week Ahead

A day of mourning for former President Jimmy Carter will break up a week in which the big news will be the December jobs report. The TikTok ban case gets a hearing before Supreme Court justices on Friday.

Stocks to Watch

Shares of MicroStrategy rose 2.1% after it said it was targeting a capital raise of up to $2 billion from a perpetual preferred stock offering to continue to strengthen its balance sheet and acquire more of the world's largest cryptocurrency.

Plug Power closed 13% higher on Friday and was up an additional 6.8% in premarket trading after the Treasury Department issued new rules that would allow clean hydrogen companies to qualify for tax breaks if they capture and store carbon from the hydrogen production, or if they use clean electricity to make it. Bloom Energy, which rose 4.1% on Friday, gained 0.3% in premarket trading.

Super Micro Computer was up 2.6% in premarket trading after shares rose 11% on Friday, ending a losing streak of five sessions. The stock received a boost from an announcement by Microsoft that it planned to spend $80 billion in its current fiscal year ending in June to develop AI data centers. Microsoft gained 1% in premarket trading.

VeriSign rose 2.7% after Berkshire Hathaway bought about $4 million more stock of the internet domain-name registry company. The small recent buys of about 20,000 shares were made at an average price of nearly $205 a share, according to a regulatory filing. Berkshire Hathaway now owns 13.3 million shares of Verisign, a roughly 14% stake worth about $2.7 billion.

Watch For:

Factory Orders for November

Today's Headlines/Must Reads:

-How Uber and Lyft Are Gearing Up for the Robotaxi Revolution

-House and Senate Split on How to Deliver for Trump

-Global Mining's Dangerous New Reality: Guns, Hostages, Arrests

MARKET WRAPS

Forex:

The dollar has recently risen strongly in a short space of time so there is potential for a short-term pullback, "perhaps by virtue of some profit-taking" ahead of the jobs data, Pepperstone said.

Pepperstone said it was "reluctant to read too much" into the dollar's current retracement and it remained positive on the currency's medium-term prospects.

The euro extended its gains against the dollar after the eurozone services purchasing managers' index was revised higher for December. The final PMI estimate was revised to 51.6 from a flash reading of 51.4 and is comfortably above November's 49.5.

The survey also showed services prices continued to rise at a quicker rate in December. This means the European Central Bank should "remain cautious and make only small interest rate cuts in the first quarter of 2025," Hamburg Commercial Bank said.

The euro could fall towards parity against the dollar as early as this week if data support expectations for U.S. economic outperformance, Commerzbank said.

Data in coming days could "confirm the market's view that the U.S. economy remains resilient and the growth gap between the U.S. and other industrialized nations is widening further."

Bonds:

Price-sensitive investors are expected to dominate demand for Treasurys again, as coupon issuance sizes are likely to remain stable for most of 2025, Societe Generale said.

"While we believe bond vigilantism or a buyers' strike is unlikely, we expect the demand for Treasuries to remain sensitive to economic conditions, geopolitics, and risk sentiment."

This sensitivity could potentially lead to a higher term premium. It may also contribute to heightened volatility throughout the year.

Taxable municipal bonds offer a higher yield compared with Treasurys and can periodically even offer higher yields than U.S. investment-grade corporates, BNY Investments said.

"For those looking to enhance yields, but unable to take outright credit risk, we think taxable munis sit in a sweet spot between Treasuries and investment-grade credit."

These issues are backed by tax revenue streams, and generally have a low likelihood of default, BNY said.

Energy:

Oil prices remained supported by hopes over Chinese stimulus and prospects of higher fuel demand due to colder weather.

"The strength in the market appears to be on the back of a stronger physical market in the Middle East," ING said.

"There are suggestions that Asian buyers have been looking to other Middle Eastern grades amid broader sanctions against Russia and Iran."

Meanwhile, the market awaits to see whether Donald Trump will enforce stricter sanctions against Iran, leaving the market tighter than expected.

ICICI Securities said oil prices are likely to slip further on demand concerns and expectations the market will remain in surplus despite OPEC+ members delaying production increases.

It expects growth in oil production to come mostly from non-OPEC countries. OPEC is also sitting on sizable spare production capacity, which could support the market even in the event of any supply disruptions.

Potential trade tensions during Donald Trump's second term will likely have a negative effect on economic growth, hurting oil demand.

Metals:

Gold futures weakened slightly as investors positioned with U.S. economic data in mind.

Friday's jobs report is expected to shed further light on the Federal Reserve's approach to monetary policy easing, and particularly the size and scope of future interest-rate cuts.

Higher rates for longer typically damp the appeal of non-interest bearing bullion and the precious metal was a stand-out performer in the commodities complex in 2024, BMI said.

Gold is likely to demonstrate its resilience as a safe-haven asset in the first quarter of 2025, as prices receive support from both the Fed's rate cuts and high levels of geopolitical tension, BMI added.

It expects spot gold to trade in the range of $2,500-2,800 an ounce in the coming months.

ICICI Securities said gold may continue to rise this year supported by safe-haven demand on heightened geopolitical tensions and fears over a potential trade war hurting economic growth. However, a strong dollar and a rise in Treasury yields may provide some headwinds.

ICICI sees spot gold likely rising towards $2,900-$3,000/oz in coming months.

Comex gold futures still look bearish on the daily chart, RHB Retail Research said.

Friday's bearish price movements and the downward-pointing relative strength index indicator suggest that the precious metal's countertrend rebound is encountering resistance from the 50-day simple moving average.

Mined Commodities

Jefferies said there are likely to be limited gains in most mined commodity prices this year, with possible exceptions for copper, aluminum and steelmaking coal.

"We do not expect a significant acceleration in demand growth for the major metals and mined commodities in 2025."

Naming a stronger U.S. dollar for now, the property market downturn in China, a potentially slowing U.S. economy and an escalation of trade wars as macro headwinds, Jefferies said "at least offset the tailwinds," pointing to lower corporate tax rates and deregulation in the U.S., easier monetary policy in major economies, a possible end to the war in the Ukraine, and a modest China stimulus.

Miners

Glencore, Anglo American, Teck, and Alcoa are Jefferies' top picks among mining stocks this year. It said that while it has recently become more cautious on the near-term outlook for the sector due to cyclical factors, and believes the risk to consensus estimates is to the downside, it is too late to make downgrades to its ratings.


TODAY'S TOP HEADLINES


Tesla Stock Rises. Selling Cars Is Now Less Important Than This.

Tesla stock was rising in early trading Monday after a wild start to the new year.

It turns out, selling electric vehicles isn't the most important thing right now. Artificial intelligence is number one.


Centerview Partners Considers a Deal of Its Own After Record Year

Centerview Partners has long been seen as a holdout on Wall Street as one of the only boutique banks that hasn't gone public or taken outside money.

That could finally change.


Unemployed Office Workers Are Having a Harder Time Finding New Jobs

The U.S. economy has added more than two million jobs over the past year. But more people who are out of work are having a hard time getting back in.

As of November, more than seven million Americans were unemployed, meaning they didn't have work and were trying to find it. More than 1.6 million of those jobless workers had been job hunting for at least six months, according to the Labor Department. The number of people searching for that long is up more than 50% since the end of 2022.


Trump's tariff policy claims its first victim with Trudeau reportedly to resign

President-elect Donald Trump's tariff policy has claimed its first victim before the president even returned to office.

Canada's Globe and Mail newspaper, citing multiple sources, said Canadian Prime Minister Justin Trudeau may resign on Monday and will do so ahead of Wednesday's caucus of his Liberal party. The report said it's unclear if he'll stay as prime minister until his party chooses a new leader or if an interim prime minister will be named.


China Services Activity Gauge Signals Pickup in Growth

(MORE TO FOLLOW) Dow Jones Newswires

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