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The FOMC roster change takes the focus off today's December Fed meeting minutes
Equity futures are mixed this morning following two back-to-back days of gains. While a Santa Claus Rally failed to emerge, we are smack dab in the middle of another seasonal indicator - “the first five days.” The rationale behind this indicator is if stocks end the first five trading days of a new year with a gain, the market should see net gains for the 12-month stretch. Some view it as investors tipping their hands early in the calendar year but looking over the correlation analysis, the indicator’s performance means we’ll stick to following the data and thematic tailwinds.
The tailwinds for AI and our corresponding models for that as well as Digital Infrastructure were blowing hard last night in Las Vegas when Nvidia (NVDA) Jensen Huang gave his CES 2025 keynote. Huang offered a vision for how AI will spread through the economy and made several announcements, including working with Toyota (TM) and Uber (UBER) on autonomous driving solutions, Nvidia Cosmos, and a new desktop PC called Project Digits. From TVs and PCs to smartphones and other connected devices, AI is expected to be a hot topic at CES 2025 but seeds are being planted for future events with Samsung sharing its next Unpacked event will be held on January 22.
Upcoming data on jobs and wages
Coming up this morning, we’ll receive ISM’s December Non-Manufacturing PMI, the next ingredient to be incorporated into Q4 2024 GDP forecasts. Ahead of Friday’s December Employment Report and next week’s CPI and PPI readings for December, we’ll be reviewing what ISM’s findings say about job creation and inflation during the last month of 2024. Coming off other December Manufacturing and Services PMIs, today’s data should show the Services economy continuing otherwise carry the overall US economy. New order growth should point to a solid start for the economy entering the new year.
Alongside ISM’s findings, we’ll also get the November JOLTs data, which in our view is a bit rear-facing but there will be those that tear into it, looking for more color on the employment market. To us, the color to focus on will be in tomorrow’s December ADP Employment Change Report for what it shows not only for job growth but also wage pressures. Consensus expectations for ADP’s report peg job creation around 131,000, down from 146,000 in November. Complimenting those learnings will be Thursday’s Challenger Job Cuts report for December, and while many will be focused on the number of cuts, we’ll be much more interested in a few lines near the end of the report. That is where Challenger shares insight it collected on hiring plans.
Fed meeting minutes this afternoon, roster change means no biggie
We have no corporate earnings reports out today that will shape the market, but you will want to keep your eyes and ears open for any earnings pre-announcements. This afternoon brings the meeting minutes from the Fed’s December policy meeting, which are not likely to be revolutionary given the reconstitution of the Federal Open Market Committee(FOMC) that includes four new 2025 voting members. They include Boston Fed President Susan Collins, Chicago Fed President Austan Goolsbee, St. Louis President Alberto Musalem, and Kansas City Fed President Jeffrey Schmid. According to InTouch Capital Markets, Goolsbee is the only dove of the four.
Related: Why Corporate Executives Are Both Bullish and Bearish in 2025