Futures Pointing To Roughly Flat Open On Wall Street

The major U.S. index futures are currently pointing to a roughly flat open on Tuesday, with stocks likely to show a lack of direction following the weakness seen in the previous session.

Traders may be reluctant to make significant moves ahead of the release of the Labor Department’s closely watched report on consumer price inflation on Wednesday.

The report is expected to show consumer prices rose by 0.2 percent for the fifth straight month in November, while the annual rate of consumer price growth is expected to tick up to 2.7 percent in November from 2.6 percent in October.

Core consumer prices, which exclude food and energy prices, are expected to increase by 0.3 percent for the fourth straight month in November. The annual rate of growth by core consumer prices is expected to remain at 3.3 percent.

While the Federal Reserve is widely expected to lower rates by another 25 basis points next week, the data could impact the outlook for future rate cuts by the central bank.

The Labor Department released a report this morning showing the jump by U.S. labor productivity in the third quarter was unrevised from the previous estimate, although it also showed a downward revision to the increase by U.S. unit labor costs.

After showing a lack of direction early in the session, stocks moved mostly lower over the course of the trading day on Monday. The major averages all moved to the downside, with the Nasdaq and the S&P 500 pulling back off last Friday’s record closing highs.

The major averages finished the day firmly in negative territory. The Dow fell 240.59 points or 0.5 percent to 44,401.93, the Nasdaq slid 123.08 points or 0.6 percent to 19,736.69 and the S&P 500 declined 37.42 points or 0.6 percent to 6,052.85.

A slump by shares of Nvidia (NVDA) weighed on the markets, with the AI darling tumbling by 2.6 percent on the day.

The drop by Nvidia came amid news a Chinese regulator has launched an investigation into whether the chipmaker violated the country’s antimonopoly laws.

Traders may also have been cashing in on recent strength in the markets, which has lifted the major averages to record highs.

The weakness on Wall Street also came as traders looked ahead to the release of closely watched U.S. inflation data later in the week.

Reports on consumer and producer price inflation, which are due to be released on Wednesday and Thursday, respectively, could impact the outlook for interest rates.

Telecom stocks came under considerable selling pressure over the course of the session, dragging the NYSE Arca North American Telecom Index down by 1.7 percent.

Significant weakness was also visible among interest rate-sensitive utilities stocks, as reflected by the 1.6 percent loss posted by the Dow Jones Utilities Average.

Brokerage and banking stocks also saw notable weakness, while gold stocks moved sharply higher along with the price of the precious metal.

Commodity, Currency Markets

Crude oil futures are slipping $0.22 to $68.15 a barrel after jumping $1.17 to $68.37 a barrel on Monday. Meanwhile, after surging $26.20 to $2,685.80 an ounce in the previous session, gold futures are climbing $12.30 to $2,698.10 an ounce.

On the currency front, the U.S. dollar is trading at 151.66 yen compared to the 151.21 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.0523 compared to yesterday’s $1.0554.

Asia

Asian stocks ended mixed on Tuesday after Chinese exports and imports both missed expectations in November, signaling growing trade challenges.

Gold ticked higher, the U.S Treasury 10-year yield fell one basis point to 4.19 percent and the dollar held steady ahead of key U.S. consumer and producer inflation readings due this week that will help shape the outlook for the Federal Reserve’s monetary policy.

Oil prices fell slightly, retreating after recent gains driven by increased stimulus pledges from China and heightened tensions in the Middle East.

China’s Shanghai Composite Index surged more than 3 percent at the open before giving up most gains to close up 0.6 percent at 3,422.66. Hong Kong’s Hang Seng Index reversed course to end half a percent lower at 20,311.28.

Chinese exports grew at a slower pace and imports posted an unexpected decline in November, official data revealed today.

Exports grew 6.7 percent annually in November, which was weaker than the 12.7 percent increase posted in October. Imports decreased 3.9 percent from a year ago compared to the 2.3 percent drop in October.

Japanese markets eked out modest gains as the yen lost ground against its American counterpart for the second consecutive day. Signals of a policy shift in China also boosted sentiment.

The Nikkei 225 Index rose 0.5 percent to 39,367.58, while the broader Topix Index ended 0.3 percent higher at 2,741.41. China-exposed stocks such as Fanuc, Yaskawa Electric and Shiseido surged 3-4 percent.

Seoul stocks recovered from one-year lows as policymakers affirmed their intention to stabilize markets and financial authorities said the excessive volatility in recent days would be addressed.

The Kospi jumped 2.4 percent to 2,417.84. Tech heavyweight Samsung Electronics rose 1.1 percent and automaker Hyundai Motor surged 4.7 percent.

Australian stocks closed lower after the Reserve Bank of Australia kept interest rates on hold, as widely expected, with a dovish tilt.

The benchmark S&P/ASX 200 Index dipped 0.4 percent to 8,393, while the broader All Ordinaries Index ended down 0.4 percent at 8,650.

Technology stocks and banks declined, offsetting gains in the mining and energy sectors. IAG shares fell 1.7 percent after the insurer said it would defend itself against a class action in the Victorian Supreme Court.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index ended down 0.6 percent at 12,723.37.

Europe

European stocks have moved lower on Tuesday, with miners leading losses after data showed Chinese exports grew at a slower pace in November and imports unexpectedly shrank, in a worrying sign for the world’s second-largest economy.

In addition, focus shifted to upcoming U.S. CPI data and the ECB policy meeting. The European Central Bank’s (ECB) monetary policy decision is due on Thursday, with the central bank expected to cut interest rates by 25 bps for the third time in a row.

The French CAC 40 Index is down by 0.8 percent and the U.K.’s FTSE 100 Index is down by 0.6 percent, although the German DAX Index is just above the unchanged line.

Ashtead shares have plunged after the British construction equipment rental group said it plans to move its listing from London to New York.

Delivery Hero SE, a German food delivery platform, has also plummeted as it’s Middle East subsidiary Talabat started trading in Dubai.

TeamViewer has also tumbled after the software firm agreed to acquire the London-based IT firm 1E for an enterprise value of $720 million.

Meanwhile, FirstGroup has rallied. The transport group has agreed to acquire RATP London from RATP Developpement for an enterprise value of 90 million pounds ($114.8 million).

Automaker Volkswagen has also moved to the upside following reports that talks with unionists will continue next week.

In economic news, German consumer price inflation rose to a four-month high in November due to less favorable energy base effects, Destatis reported.

The consumer price index registered an annual increase of 2.2 percent in November following a 2.0 percent rise in October. That matched the estimate published on November 28.

Inflation, based on the harmonized index of consumer prices, stood at 2.4 percent, the same as in October and in line with the flash estimate.

U.S. Economic News

While the Labor Department released a report on Tuesday showing the jump by U.S. labor productivity in the third quarter was unrevised from the previous estimate, the report also showed a downward revision to the increase by U.S. unit labor costs.

The report said labor productivity shot up by 2.2 percent in the third quarter, unrevised from the initial estimate and in line with economist estimates.

The sharp increase in labor productivity in the third quarter reflects a modest acceleration from the 2.1 percent surge in the second quarter.

Meanwhile, the Labor Department said the increase in unit labor costs in the third quarter was downwardly revised to 0.8 percent from the 1.9 percent jump originally reported. Economists had expected the pace of unit labor cost growth to be unrevised.

Revised data also showed unit labor costs slumped by 1.1 percent in the second quarter compared to the previously reported 2.4 percent spike.

At 1 pm ET, the Treasury Department is scheduled to announce the results of this month’s auction of $58 billion worth of three-year notes.