Bonds & Stocks
US equity futures pulled back from their highs as investors looked ahead to earnings from Nvidia Corp. and the release of long-delayed economic data. Futures on the S&P 500 struggled to hold on to gains following a volatile stretch for stocks. The advance in Nasdaq 100 contracts was stronger, with Alphabet Inc. climbing 5.5% in premarket trading after Berkshire Hathaway Inc. disclosed a $4.9 billion stake. Bitcoin rebounded after erasing its year-to-date gains. Treasuries strengthened across the curve, while the dollar edged higher.
Economy
Bond traders are bracing for a deluge of data that will solidify expectations for how quickly the Federal Reserve will continue the interest-rate cuts that have driven US Treasuries to the biggest gains since 2020. The lack of government data during the closure made it difficult to gauge the direction of the economy, but data from private data sources continued to underscore the weakening in the job market. There’s a risk that the government’s figures may surprise to the upside by showing that businesses have been adding jobs at a stronger-than-expected pace, which could cause policymakers to hold rates steady at the Dec. 10 meeting or push back on the market’s expectations for 2026.
World
China is escalating its confrontation with Japan over Prime Minister Sanae Takaichi’s comments on Taiwan, with state media threatening major countermeasures. China's travel warnings and potential economic retaliation could inflict damage on businesses and affect millions of Chinese tourists visiting Japan, with estimates suggesting a potential loss of 2.2 trillion yen to Japan's economy. Japan is dispatching a senior diplomat to China to smooth tensions, while the upcoming G-20 leaders’ summit could provide an opportunity for Takaichi to meet with Chinese Premier Li Qiang and mend fences.