S&P 500 futures are up 15 points, Nasdaq 100 futures are up 50 points, and Dow Jones Industrial Average futures are up 100 points, suggesting a positive opening for the major indices. This follows a rebound in the previous trading session, with support from lower Treasury yields. The 10-year yield is down to 4.79%, and the 2-year yield is down to 4.39%.
Strong performances from mega-cap companies and chipmakers, which have faced significant losses this year, are boosting the equity market this morning.
The NFIB Small Business Optimism survey rose to 105.1 in December from 101.7. Today's data also includes the December Producer Price Index at 8:30 ET.
In individual stock news:
Nvidia (NVDA, Financial) is set to establish its Asian headquarters in Taipei, Taiwan, as reported by the country's national news agency. The chipmaking giant plans to hire at least 2,500 people and will also open a research and development center in Kaohsiung. Meanwhile, rival AMD (AMD, Financial) is looking to set up its own R&D center in Tainan, demonstrating the growing importance of Taiwan in the semiconductor industry.
The latest U.S. Producer Price Index (PPI) data showed a softer-than-expected increase of 0.2% month-over-month for December 2024, as reported by the Bureau of Labor Statistics. This was below the consensus of 0.4% and November's 0.4% rise. Core PPI remained unchanged month-over-month, which was significantly lower than the anticipated 0.3% increase. These figures have implications for tariffs and trade taxes, potentially affecting U.S. companies' input costs and pricing power, according to UBS chief economist Paul Donovan.
Aehr Test Systems (AEHR, Financial) experienced a pre-market drop after reporting lower-than-expected earnings for its fiscal second quarter, with non-GAAP EPS of $0.02 missing consensus by $0.01. The company's revenue of $13.45 million also fell short by $1.58 million. Aehr reiterated its annual revenue guidance of at least $70 million, but CEO Gayn Erickson noted challenges in silicon carbide sales growth outside of China until 2026.
AMD (AMD, Financial) was highlighted by Loop Capital with a Buy rating and a $175 price target, citing the company's potential in accelerated computing and market share expansion in general-purpose computing. The analyst emphasized ongoing debates regarding AMD's role in artificial intelligence and accelerated computing, especially in light of Intel's challenges.
Applied Digital (APLD, Financial) announced a significant $5 billion investment from Macquarie to support its high-performance computing data center development. The investment includes $900 million for the 400MW Ellendale, North Dakota campus, with the option for Macquarie to invest an additional $4.1 billion in future projects. This deal also grants Macquarie a 15% stake in Applied Digital's high-performance computing business.
Apple (AAPL, Financial) is nearing verification of processors produced at Taiwan Semiconductor's (TSM, Financial) Arizona facility, with the first batch expected soon. Apple CEO Tim Cook previously stated that Apple would be among the first to receive chips from this plant, with other customers like AMD (AMD, Financial) and Nvidia (NVDA, Financial) also set to benefit.
The U.S. software sector, including companies like Salesforce (CRM, Financial), HubSpot (HUBS, Financial), Microsoft (MSFT, Financial), and ServiceNow (NOW, Financial), is poised for growth driven by Agentic AI and increased enterprise IT spending. Bank of America analysts noted that despite recent rallies, the sector's revenue multiples and growth expectations remain below historical levels, suggesting further upside potential.
B. Riley Financial (RILY, Financial) saw a 14% surge in premarket trading after disclosing financial actions to strengthen its balance sheet following Freedom VCM Holdings' bankruptcy. The company reduced its Nomura credit facility balance significantly and received subpoenas from the SEC regarding its dealings with Freedom VCM Holdings.
MicroStrategy (MSTR) co-founder Michael Saylor advocated for companies to invest in bitcoin (BTC-USD) instead of traditional bonds, calling them "toxic." His comments followed MicroStrategy's recent purchase of 2,530 BTC, bringing its total holdings to 450,000 BTC.
Archer-Daniels-Midland (ADM, Financial) received an Underperform rating from Bank of America, citing a challenging profitability outlook due to macroeconomic risks and deteriorating biofuel margins. The firm expects ADM's earnings to be flat or decline in 2025, with shares dropping 1.4% in premarket trading.
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