Ten Stories Moving the Market

Ten Stories Moving the Market:

Congress is running out of time to pass a sprawling appropriations package before current funding for much of the federal government expires on Saturday; Senate Democrats said they won’t support the bill without changes to the provisions regarding the Department of Homeland Security – WSJ. (Why you should care – it’s likely that a partial government shutdown will happen, involving DHS, until a broader oversight agreement can be reached)

Japan’s services producer price index experienced 2.6% annualized growth in December, according to Bank of Japan data; that compares to the 2.7% growth in November – Reuters. (Why you should care – easing services inflation could help bring broader price growth back under control, easing the rate hike outlook)

Japan’s mid-sized life insurers are joining their larger peers in avoiding the nation’s super-long government debt; those bonds are usually major investment targets for insurers to match their long-term liabilities – Bloomberg. (Why you should care – Japanese insurers are increasingly worried that yields may rise further causing bond prices to drop)

The aircraft carrier USS Abraham Lincoln and three accompanying warships have arrived in the Middle East; U.S. Central Command said the ships are there to promote regional security and stability – AP News. (Why you should care – the arrival is stoking concern President Donald Trump could opt to order airstrikes on Iran over its crackdown on protesters)

China’s industrial enterprises had their first annual gain in profits since 2021, as producer deflation showed signs of easing in the wake of government efforts to curb excess competition and cut capacity – Bloomberg. (Why you should care – the rebound in industrial profits should help to spur spending and economic growth)

Canadian Prime Minister Mark Carney said his country has no intention of pursuing a free trade deal with China; Carney said his recent agreement with China merely cuts tariffs on a few sectors that were recently hit with tariffs – AP News. (Why you should care – the Canadian Prime Minister is likely trying to dial back trade tensions after U.S. President Donald Trump threatened to impose a 100% tariff on goods imported from Canada)

President Donald Trump said he was raising tariffs on U.S. imports of South Korean autos and other goods, blaming the legislature for dragging its feet on enacting a deal agreed last year – Reuters. (Why you should care – the tariff threat may be part of a broader negotiation regarding regulations on U.S. tech firms)

The Army signed a $5.6 billion, 10-year contract with cloud-software provider Salesforce, giving the military access to the company’s technology with the goal of speeding up antiquated and outdated practices - WSJ. (Why you should care – the deal announcement could ignite a cover rally in software stocks given the recent underperformance relative to hardware)

Ford and General Motors are in negotiations with bankrupt car parts supplier First Brands Group ​over a potential financing package to keep the company operating ‌during its Chapter 11 proceedings – Reuters. (Why you should care – Ford and GM are trying to aid the key component supplier in the search to find buyers for its assets)

Micron will inject an additional $24 billion in Singapore over the next decade to expand its manufacturing capabilities amid an AI-induced memory chip shortage; the chipmaker will use the funding to build a new facility for NAND memory production – Bloomberg. (Why you should care - the investment speaks to the level of AI demand the company is seeing) 

Economic Calendar:

Earnings: BA, HCA, IVZ, NOC, RTX, STX, SYY, TXN, UNH, UNP, UPS

China – Industrial Profits for December

France - Consumer confidence for January (2:45 a.m.)

U.S. – FHFA House Price Index for November (9 a.m.)

U.S. – S&P CoreLogic Case‑Shiller Home Price Index for November (9 a.m.)

U.S. – Richmond Manufacturing Index for January (10 a.m.)

Treasury Auctions $90 Billion in 6-Week Bills (11:30 a.m.)

Treasury Auctions $70 Billion in 5-Year Notes (1 p.m.)

U.S. - American Petroleum Institute Crude Oil Inventory Data (4:30 p.m.)