OPENING CALL

Stock futures dipped on Thursday and Treasury yields continued to edge up as investors grappled with the idea the Federal Reserve may not be able to make many interest-rate cuts as it struggles to bring inflation back to target.

"There are inflation 'last mile' upside concerns even setting aside risks around policy changes." Bank of America said.

"And an expectation that services inflation will return naturally to its pre-Covid range takes a lot on trust."

After Wednesday's in-line inflation data, attention turns to the producer price index--a key input into the Fed's preferred inflation gauge, the PCE price index--as well as weekly jobless claims.

Overseas

European interest-rate decisions are in focus today, ahead of the Fed's meeting next week. The Swiss National Bank surprised markets by opting for a bumper 0.5 percentage point cut, knocking the Swiss franc. Next up is the European Central Bank's decision.

Stocks to Watch

Adobe was falling 10% after it issued first-quarter and fiscal-year revenue guidance below expectations.

Alphabet was rising 0.5% in premarket trading after the stock set a record closing high, ending Wednesday up 5.5%. The company said developers will be the first to have access to Gemini 2.0, an update to its AI mode, with general availability in January.

Nordson said it expected fiscal first-quarter adjusted earnings below consensus on revenue below forecasts. Shares declined 5.8% in after-hours trading Wednesday.

Oxford Industries reported a third-quarter loss and cut its fiscal-year outlook. Shares fell 2.6% in after-hours trading Wednesday.

Tesla shares were up 0.8% in premarket trading after hitting an all-time closing high Wednesday. The stock has gotten a boost-jumping 69%-since Donald Trump's election win.

Earnings reports are expected Thursday from Broadcom , Costco Wholesale, Ciena, RH

Watch For:

PPI for November, Weekly Jobless Claims

Today's Headlines/Must Reads:

-Investors Shouldn't Count on Much Help From the Fed Next Year

-Inflation Is Stuck. Can Trump Unstick It?

-Trump Looms Large in Republican Fight Over 2025 Plans

MARKET WRAPS

The dollar could get a minor lift if data show producer price inflation is higher than expected, ING said.

"Any upside surprise--and what it means for next Friday's release of the core PCE deflator--could prove a minor dollar positive."

The dollar could also rise if the ECB hints at further interest-rate cuts. This could lift the DXY dollar index towards 107, from 106.570 currently, ING said.

Pepperstone said any discussion among policymakers of a larger 50bp ECB rate cut either for this week or in the future could be key for the euro's outlook. Any such comment, either from Christine Lagarde or from comments made by policymakers after the meeting later Thursday will be "key for the direction of the euro."

BNP Paribas Markets 360 said the euro is expected to keep falling against the dollar and reach parity in 2025. It expects a further monetary policy divergence between the Federal Reserve and the ECB and forecasts five ECB rate cuts in the current cycle, compared with one more rate reduction by the Fed.

The franc hit a two-week low against the euro after the Swiss National Bank cut interest rates by 50bp to 0.50%. The market consensus was for a smaller 25np cut, although many had anticipated a half-point reduction.

Energy:

Oil prices have been supported by reports that the Biden administration is potentially looking into further sanctions on Russia, which could target oil and its shadow tanker fleet, ING said.

However, while the U.S. might want to target some Russian oil export volumes, it won't want to cut off the bulk of these flows, ING added. That would push the market into a deep deficit, significantly raising prices.

OCBC said crude oil prices likely face pressure next year, as an anticipated buildup in global inventories should curtail any upward pressure on prices.

Also, "China's oil demand may disappoint and could likely weigh on the outlook for global oil demand growth outlook in 2025." OCBC forecasts Brent and WTI to average $77 and $73 in 2025, respectively.

Metals:

Gold faces some near-term challenges but it is still an attractive hedge, OCBC said.

Upside may be limited as markets expect a more gradual pace of easing by the Federal Reserve in 2025 and due to the Israel-Hezbollah cease-fire. Still, most central banks are continuing to ease policy, which will support gold, OCBC said. Gold may also offer "a safe harbor" if geopolitical tensions worsen in 2025.

RHB Retail Research said comex gold futures are heading for the $2,800/oz resistance level on strong momentum, based on the daily chart.


TODAY'S TOP HEADLINES


Chinese Solar Stocks Shrug Off New U.S. Tariffs

Chinese solar stocks largely shrugged off new U.S. tariffs on imports of China-made solar wafers and polysilicon, key materials used in manufacturing solar cells.

Shares of Jinko Solar and GCL System Integration Technology were down less than 1% at the midday break in China trading, while Trina Solar, JA Solar Technology, LONGi Green Energy Technology, Risen Energy and Shanghai Aiko Solar Energy had all gained ground.


Australia Plans Tech-Platform Charge to Shore Up News Media

SYDNEY-Australia plans to implement a new charge on the owners of global tech platforms, attempting to shore up local media outlets months after Facebook cut ties with traditional news providers.

The government plans to charge platforms that choose not to enter or renew commercial agreements with local news publishers. The charge will apply to large digital platforms operating significant social media or search services irrespective of whether or not they carry news, the government said Thursday.


Mark Zuckerberg's Meta Donates $1 Million to Trump's Inaugural Fund

Meta Platforms has donated $1 million to president-elect Donald Trump's inaugural fund, the latest step by CEO Mark Zuckerberg to bolster his once-fraught relationship with the incoming president.

The donation, confirmed by the company, is a departure from past practice by Zuckerberg and his company, and comes after an election campaign in which Trump threatened to punish the tech tycoon if he tried to influence the election against him.


Biden Administration Cracks Down on Bank Overdraft Fees

The Biden administration is overhauling rules for how banks can charge overdraft fees to customers, despite an intense lobbying campaign from the industry to prevent the changes from going into effect.

The Consumer Financial Protection Bureau said Thursday that banks can choose from three options: charge a flat overdraft fee of $5, cap the fee at an amount that covers their costs and losses, or charge any fee but disclose the terms of the overdraft loan they extend to customers the same way they would for those of any other loan.


IEA Lifts 2025 Oil-Demand Forecast But Expects Growth to Remain Subdued

The International Energy Agency lifted next year's oil-demand estimates citing the impact of China's stimulus measures, but said the pace of growth is expected to remain subdued.

The Paris-based organization now forecasts global demand to grow by 1.1 million barrels a day in 2025 from 990,000 barrels a day previously. Estimates for this year were instead cut to 840,000 barrels a day from 921,000 barrels a day, largely due to lower-than-anticipated deliveries in China, Saudi Arabia and Indonesia.


China Comes Out Swinging as Trump Trade War Looms

During Donald Trump's first administration, China learned that it couldn't match the much larger U.S. economy tit-for-tat when it came to tariffs, and quickly found other ways to try to inflict pain-often by borrowing from his playbook.

Now, as Trump's second stint in office approaches, Beijing is brandishing an expanded arsenal of countermeasures that it is likely to draw upon as the president-elect threatens across-the-board tariffs and levies of as high as 60% on Chinese-made goods.


Biden to Commute Sentences of 1,500 People

President Biden will commute the sentences of around 1,500 people, in what constitutes the largest single-day act of clemency for any president in modern history, according to the White House.

The commutations, announced in a statement Thursday, are for people who were released from prison and placed in home confinement during the Covid-19 pandemic. In addition to the commutations, Biden is also pardoning 39 Americans convicted of nonviolent crimes.


House Passes $895 Billion Defense Measure Despite Transgender Dispute

WASHINGTON-The House voted Wednesday to approve a nearly $900 billion annual defense policy bill that includes a controversial provision that would block some transgender medical care for minors covered by the military's healthcare program.

The package, which sets national defense standards and priorities for the 2025 fiscal year, notably calls for a 14.5% pay raise for junior enlisted service members, dwarfing the 4.5% pay raise included for all other members of the armed forces. The package passed 281-140, with most Republicans voting for the bill but more than half of Democrats voting no.


Write to paul.larkins@dowjones.com TODAY IN CANADA

Earnings:

Electrovaya 4Q

Empire Co 2Q

Enghouse Systems 4Q

Transat 4Q

Economic Calendar [ET]:

0830 Oct Building Permits

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12-12-24 0616ET