Ten Stories Moving the Market

Ten Stories Moving the Market:

Broadcom shares declined after the company’s sales outlook failed to meet investors’ lofty expectations; CEO Hock Tan said the company had at least $73 billion in backlog but didn’t want to give full year revenue guidance as it was still a moving target – Bloomberg. (Why you should care – investor enthusiasm ahead of the quarter was driven by optimism about Google’s TPUs using Broadcom designs)

Costco Wholesale reported better-than-expected first-quarter revenue and profit, as consumers snapped up affordable essentials and nice-to-have items at its stores ahead of the crucial holiday season – Reuters. (Why you should care – this is another sign that consumers are increasingly trading down for value)

The Treasury Department is preparing to release a corporate tax workaround that would deliver large tax savings by allowing companies to take full advantage of lucrative research and development tax breaks included in President Donald Trump’s “One Big Beautiful” tax bill – Bloomberg. (Why you should care – the guidance is expected to come out as soon as next week, potentially boosting the earnings outlook for the S&P 500)

The Federal Reserve’s board of governors voted unanimously to reappoint 11 reserve bank presidents to new five-year terms beginning March 1, 2026; all seven Fed governors voted to approve the reappointments – WSJ. (Why you should care – the makeup of the voting committee should skew slightly more dovish next year)

U.S. President Donald Trump is expected to direct his administration to move to reclassify marijuana as a less dangerous drug, a move that could represent one of the biggest shifts in U.S. policy toward cannabis in decades – Bloomberg. (Why you should care – reclassification to a schedule III drug could ease tax burdens and boost borrowing access)

President Donald Trump was happy to see the Federal Reserve cut interest rates by 25 basis points this week, but wants to see further reductions in borrowing costs, according to White House spokeswoman Karoline Leavitt – Reuters. (Why you should care – this is likely a sign of increased White House conviction in appointing more dovish policymakers to the Fed’s board)

European Commission President Ursula von der Leyen believes the bloc’s ties with China “have reached an inflection point”; the value of China’s exports to the EU is now more than double its imports – Bloomberg. (Why you should care – European officials are increasingly concerned that China is flooding its markets with cheap goods and hurting domestic industries)

Canada recorded a small merchandise-trade surplus of 153 million Canadian dollars, the equivalent of about $110.9 million, according to Statistics Canada; that marked the country’s first trade surplus in eight months – WSJ. (Why you should care – the surplus was driven by a rebound in shipments to the U.S.)

The New York Federal Reserve's operations desk plans to conduct about $14.4 billion in reinvestment purchases and an additional $40 billion in reserve management purchases between December 12 and January 14 – Reuters. (Why you should care – the expanded amount is part of the Treasury bills announcement made by the Fed earlier this week)

The Europe Central Bank will likely not follow the Federal Reserve in lowering its key interest rate, but policymakers may face growing pressure to do so if the pace of easing significantly weakens the U.S. dollar - WSJ. (Why you should care – some ECB policymakers are worried a stronger euro will weigh on the demand for European goods abroad)

Economic Calendar:

China – New Yuan Loans for November

Japan – Industrial Production, Capacity Utilization for October

U.K. – GDP for October (2:00 a.m.)

U.K. – Exports, Imports for October (2:00 a.m.)

Eurozone – ECOFIN Meetings (5:00 a.m.)

Canada – Building Permits, Manufacturing Sales for October (8:30 a.m.)

Fed’s Goolsbee (Chicago, Voter) Speaks (10:35 a.m.)

U.S. - Baker Hughes Rig Count (1 p.m.)

U.S. - CFTC’s Commitment of Traders Report (3:30 p.m.)

Fed Releases Balance Sheet Updates on Commercial Banks (4:15 p.m.)