U.S. equity futures showed little change on Sunday evening as investors turned their attention to impending jobs data during another abbreviated trading week. Futures associated with the Dow Jones Industrial Average dipped by 4 points, or 0.04%, whilst the S&P 500 futures edged up by 0.03%. The technology-heavy Nasdaq 100 futures also reflected subtle growth with a 0.05% increase.
The previous Friday witnessed the major indexes concluding higher, capping off what had been a shaky week, characterized by the absence of the anticipated "Santa Claus rally." The Dow ended up gaining 339.86 points or 0.8%, closing at 42,732.13. Similarly, the S&P 500 advanced by 1.26%, finishing at 5,942.47, as the Nasdaq Composite added 1.77% to close at 19,621.68. Despite these gains on Friday, each index still reflected losses for the week as trading conditions remained fragile.
With the New York Stock Exchange set to close on Thursday to honor the late former President Jimmy Carter, traders are anticipating clues about the economy's strength alongside the Federal Reserve's rate plans. Callie Cox, the chief market strategist at Ritholtz Wealth Management, articulated her perspective for the week, noting, "Data shows us unemployment is climbing and people are having a hard time finding jobs. There are cracks in hiring which could re-appear at any time," as reported by CNBC.
The forthcoming December jobs report on Friday is poised to be one of the last pivotal indicators before the Federal Reserve's meeting at the end of the month. Investors will also focus on the Job Openings and Labor Turnover Survey (JOLTS) due on Tuesday and the December ADP Employment Survey set for Wednesday.
Cox emphasized the high expectations surrounding 2025, stating, "It's clear both individual investors and Wall Street have high hopes for 2025. Americans are unusually confident, CEOs are upbeat, and profit growth is expected to be the strongest in years." She indicated, "This is a decent environment for the stock market… But after two years of 20%+ gains, we may be a little spoiled," highlighting the potential for disappointment as new data begins to surface.
Across the globe, the GIFT Nifty signals potential declines for the BSE Sensex and NSE Nifty 50 on Monday, January 6, as the Indian stock markets closed negatively on January 3. Specifically, the Sensex dropped 720.60 points or 0.90% to rest at 79,223.11, with the Nifty slipping by 184 points or 0.76% to 24,004.75. The Nifty Bank index similarly faced losses, descending by 617 points or 1.20%, closing at 50,988.80.
Asian markets mirrored mixed signals as of January 6. Japan’s Nikkei 225 index saw downward movement, trading 0.78% lower at 39,621.07. Conversely, South Korea's Kospi index gained 0.86% to reach 2,463.07, and Australia’s S&P/ASX 200 opened slightly higher with gains of around 0.18%. The Chinese Shanghai Composite index, on the other hand, plummeted by over 2%, hitting approximately 3,260 points.
Interestingly, Wall Street exhibited positive closures on the preceding Friday, with the S&P 500 ending the session higher by 1.26% at 5,942.47. The technology-heavy Nasdaq composite followed suit, rising 1.75%, concluding the day at 19,619.17. The Dow Jones Industrial Average surged 346.36 points or 0.82% to finish at 42,738.63.
Foreign investment dynamics were also noteworthy, with Foreign Institutional Investors (FIIs) selling stocks worth Rs 4,227.25 crore on January 3, 2025, diverging from Domestic Institutional Investors (DIIs), who recorded net purchasing of Rs 820.60 crore as they made total purchases worth Rs 14,332.69 crore against sales of Rs 13,512.09 crore.
Overall, as we venture beyond the first few days of 2025, the stock market sentiment remains cautiously optimistic, yet closely monitored, particularly with high expectations looming large. Economic indicators related to job markets and Federal Reserve actions will likely lead to experiences of both growth and potential disappointment through the latter part of January and beyond.