Tuesday, January 7, 2025

Pre-market futures are starting to climb higher this morning, following a strong day on the tech-heavy Nasdaq but flat on the Dow and S&P 500. Currently, it’s the blue-chip Dow that has the edge, +120 points, with the S&P +13 points at this hour and the Nasdaq +18. The small-cap Russell 2000 is +7 points at this hour.

NVIDIA Up Following CES Keynote

NVIDIA NVDA CEO Jensen Huang gave the keynote address at the Consumer Electronics Show (CES) in Las Vegas Monday evening, and brought with him some moderately exciting news about his company’s new offerings. Clad in a shiny black Tom Ford lizard-skin motorcycle jacket, Huang strode forward with unveilings in a couple key areas.

Among these is NVIDIA’s new graphics card for gaming — the GeForce RTX 5090, for desktop PCs — along with a smaller AI chip: GB10, a stripped-down version of its GB200, which Huang explains the rest of the Mag 7 companies are gobbling up. He also spoke about their new Cosmos platform, to be used for training robots and self-driving cars. 

Time will tell if this address will spark another big move into NVDA stock. A year ago, NVIDIA shares gained roughly +90% over the 10 weeks following the 2024 CES. Currently, Huang’s company is up +2% ahead of today’s opening bell. It is now once again the world’s largest company in terms of market cap, once again surpassing Apple AAPL.

November Trade Deficit Basically In-Line

The U.S. Trade Balance (a deficit for the past several decades) for November was released this morning, coming in at -$78.2 billion. That’s a deep cut, but not quite as deep as the -$78.4 billion expected. This follows the slightly improved revision to -$73.6 billion the previous month. this amounts to the deepest deficit since September of last year, but still off the all-time low -$101.9 billion back in March of 2022.

What to Expect for Tuesday’s Stock Market

Later this morning, after the opening bell, we’ll see two new and fairly important economic metrics: ISM Services for December and Job Openings and Labor Turnover Survey (JOLTS) for November. The former of these follows Monday’s S&P Services PMI, which came in lighter than expected but still well above the 50-level, and the latter kicks off what we call “Jobs Week.”

ISM Services for last month is expected to grow slightly to +53.4% from +52.1% reported in November. Again, we’re above the 50% threshold, which represents growth versus contraction, and the Services sector — as we’ve seen in labor market prints over the past year or more — has been the driver of the U.S.’ strong economy.

JOLTS data is expected to remain steady at 7.7 million job openings for November. We’ve been in a range of JOLTS headlines for the past several months, and, while a move notably higher or lower would constitute something of a surprise, one month’s worth of data would not likely do much to move the needle on, say, the Fed’s decision to lower interest rates at the end of this month. (Currently, it looks like there is no move in the cards from the Fed on January 31st.)

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