North American Morning Briefing: Stock Futures Steady After Risk Selloff

Summary:

Global markets steadied after a risk-asset selloff, with U.S. futures flat and crypto still weak. Investors await Fed rate cuts, while corporate moves in AI, tariffs, and media deals dominate headlines.

OPENING CALL

Stock futures were ticking higher and government bond yields held steady early Tuesday, a day after a worldwide selloff in risky assets.

"U.S. futures are fairly flat, indicating that the selloff has paused for now," Deutsche Bank said.

Stocks dropped in the previous session as risk sentiment weakened across markets, characterized by a deep cryptocurrency selloff .

Bitcoin recovered some ground on Tuesday but held below $90,000.

There was little sign of a broader rebound early in the day with few obvious catalysts for U.S. markets immediately ahead.

Investors continue to watch the economic backdrop amid expectations that the Federal Reserve will cut interest rates next week.

Stocks to Watch

Apple is shaking up its artificial-intelligence ranks, poaching a Microsoft executive and reorganizing after announcing the retirement of its top AI leader.

Costco became one of the biggest companies to sue the Trump administration over tariffs, seeking a refund should the Supreme Court rule sweeping duties illegal.

Comcast, Netflix and Paramount all submitted second offers for Warner Bros. Discovery assets, The Wall Street Journal reported. Warner Bros stock gained 1.5% premarket.

Credo Technology swung to a quarterly profit due to revenue from AI training and inference.

MongoDB hiked annual guidance as booming artificial-intelligence demand bolsters revenue. The stock jumped by about one-fifth premarket.

Economic Insight

The picture for the global economy next year is one of resilience, BNP Paribas said.

"A combination of easier monetary policies, fiscal stimulus and solid household balance sheets has provided shelter from a range of headwinds."

Market insight

DBS said the cryptocurrency selloff may suggest major risk-off sentiment going into the new year.

Nonetheless, while the declines could be a point of concern for the U.S. economic outlook, DBS notes that such digital assets "don't make or break the U.S. economy."

Watch For:

ADP National Employment Report for November; Import Prices for September; Industrial Production & Capacity Utilization for September; EIA Weekly Petroleum Status Report; earnings from CrowdStrike

Today's Top Headlines/Must Reads:

-Why Kevin Hassett Is Winning the Fed Chair Race Before It Has Ended

-Superlong Japanese Government Bond Yields Keep Climbing as Rate Hike Bets Firm

-Commercial Real Estate Is Getting Too Cheap to Ignore

MARKET WRAPS

Forex:

The dollar stayed weak after hitting a two-and-a-half-week low in the previous session on growing expectations of a Fed rate cut , cemented by a worse-than-expected ISM manufacturing report.

The euro held steady after data showed eurozone headline inflation surprisingly accelerated in November but the core measure was unexpectedly unchanged.

Sterling was flat against the euro. Convera said the pound remained heavily undervalued against the euro when measured against the U.K.-German inflation-adjusted real rate differential

Bonds:

The 10-year Treasury yield was flat. The previous day's rise in yields was mostly triggered by the growing likelihood that Trump had picked economic adviser Kevin Hassett as the next Fed chair.

Market gloom overnight on Wall Street somewhat brightened after Japan's 10-year debt auction drew solid demand , but risk recovery could be fragile.

The auction helped stabilize JGBs and other sovereigns, Swissquote noted.

Rising Japan yields and the potential repatriation of billions back to Japan could dim the outlook for risk assets.

BNP Paribas said long-dated government bond yields in the U.S., Japan and the eurozone were set to rise amid continued caution on long-dated debt and high levels of supply.

Payden & Rygel expects 2026 to remain constructive for fixed income as bonds should benefit from a resilient global economy , moderating inflation and easier monetary conditions.

UniCredit maintains a neutral position on global bonds but keeps its overweight recommendation for emerging market debt.

"Despite lingering volatility, emerging market bonds continue to offer appealing carry and diversification benefits, supported by relatively sound fundamentals and easing inflation in several economies."

Energy:

Brent crude fell slightly in early trading as investors tracked continuing geopolitical tensions in Venezuela and Eastern Europe.

Unraveling of Russian supply chains in Eastern Europe and fears over supply from Venezuela continued to weigh on investors and present a downside risk to prices looking ahead, Citi said.

Julius Baer said recent geopolitical tensions aren't likely to change the long-term outlook for oil prices.

Metals:

Gold and silver fell back slightly in early trading, with silver retreating from record highs Monday driven by U.S. rate-cut expectations and supply tightness.

Julius Baer said silver prices could double for the first time since 1979.

Triggers for the rise include silver's addition to the U.S. critical minerals list and mounting expectations for a U.S. rate cut.

Iron ore

Prices were higher, supported by improving fundamentals . Supply and demand are getting better, Guangfa Futures said, but some analysts remain neutral on the black metal.

TODAY'S TOP HEADLINES

Samsung's Next Salvo Against Apple: A Triple-Folding Smartphone

SEOUL-The U.S. will soon get its first mass-market smartphone that folds not just once, but twice.

Samsung Electronics' Galaxy Z TriFold is expected to hit the shelves in the U.S. as early as the first quarter of 2026, after it goes on sale in South Korea and elsewhere this month.

Bayer Shares Jump After White House Backs Supreme Court Review in Roundup Case

Bayer shares rose after the company said it welcomed the U.S. Solicitor General's support for a Supreme Court review of a case that could curtail longrunning litigation regarding its Roundup weed-killer.

Shares in Bayer were up by as much as 14% in early European trading after the White House backed its bid for a review by the Court.

OpenAI's Altman Declares 'Code Red' to Improve ChatGPT as Google Threatens AI Lead

OpenAI Chief Executive Sam Altman told employees Monday that the company was declaring a "code red" effort to improve the quality of ChatGPT and delaying other products as a result, according to an internal memo viewed by The Wall Street Journal.

Altman said OpenAI had more work to do on the day-to-day experience of its chatbot, including improving personalization features for users, increasing its speed and reliability, and allowing it to answer a wider range of questions.

Growth to Slow as Tariffs Bite, But AI Investments May Cushion the Blow

The U.S. and global economies are set to slow next year as higher tariffs take full effect, but could grow more strongly than expected if the AI investment boom "broadens," the Organization for Economic Cooperation and Development said.

In a quarterly report on Tuesday, the Paris-based research body forecast the U.S. economy will grow 2% this year and 1.7% next year, having expanded by 2.8% in 2024. In September, the OECD projected growth of 1.8% this year and 1.5% in 2026. It sees the world's largest economy regaining momentum in 2027, with growth of 1.9%.

Eurozone Inflation Picks Up as Services Prices Accelerate

The annual rate of inflation in the eurozone rose further above the European Central Bank's target in November, making another cut in the key interest rate less likely.

The European Union's statistics agency Tuesday said consumer prices in the 20 countries that share the euro were 2.2% higher than a year earlier, an increase in the annual rate of inflation from the 2.1% recorded in October. The ECB targets an inflation rate of 2%.

The U.S. is Building Pipelines; Investors Have Mixed Feelings

North America is in the midst of a record pipeline-building boom, with companies laying hundreds of miles of new pipes across the U.S. and Canada. But investors have been wary of buying in, because similar booms have led to messy busts in the past.

Pipeline stocks have done just OK this year, and some have done worse than that. A decade ago, pipeline companies were forced to cut their dividends when an oil bust caused producers to stop drilling.

Bitcoin Rout Picks Up Steam as Investors Fret Over a New 'Crypto Winter'

The rout in cryptocurrency is intensifying.

Bitcoin tumbled more than 6% on Monday, its biggest one-day drop since March. The world's largest digital currency traded at $85,468 as of 4 p.m. Eastern time in New York and is down more than 30% from a peak above $126,000 set in early October. The selloff has spilled into other digital coins, including ether and solana, and pulled down stocks tied to the crypto market such as exchange operator Coinbase Global and Strategy, Michael Saylor's bitcoin-accumulation company.

Chinese Rare-Earth Dealers Find Ways to Dodge Beijing's Export Restrictions

Chinese rare-earth magnet companies are finding workarounds to their government's onerous export restrictions, as they seek to keep sales flowing to Western buyers without falling afoul of Chinese authorities.

The companies are tweaking magnet formulas to avoid using certain restricted rare-earth elements and devising other strategies to get powerful magnets out of the country, like embedding them in motors, according to employees of several large Chinese magnet companies and Western firms that buy from them.

Trump's Push to End the Ukraine War Is Sowing Fresh Fear About NATO's Future

BERLIN-This week will bring a split screen that will reinforce growing doubts in Europe about the American commitment to the alliance that has served as the bedrock of Western unity since the end of World War II.

Source: morningstar

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