Morning in New York: investors will continue to assess the environment

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The mood of traders on Thursday, January 8, will be determined by the White House's increased direct intervention in the activities of corporations, which is becoming a new source of market uncertainty. The day before, US President Donald Trump sharply criticized defense companies, demanding that they stop paying dividends and share buybacks until they increase investments in production capacity. However, after that, the American leader announced that he plans to increase the military budget for 2027 from $901 billion to $1.5 trillion.

In addition, stock exchange players will have to evaluate the weekly data on initial jobless claims (consensus: 212 thousand after 199 thousand for the previous similar period). The previous day's ADP and JOLTS statistics showed further signs of labor market cooling, so the growth in the number of applications for benefits may strengthen expectations of Fed policy easing.

Trump has said Venezuela will use U.S. oil revenues to buy U.S. goods, including agricultural products and medical equipment. This move, along with the ongoing escalation of tensions in the region, could support volatility in commodity markets.

TD SYNNEX (SNX) and Lindsay Corporation (LNN) will report before the opening of the main session. Aehr Test Systems (AEHR), Tilray Brands (TLRY ) and WD-40 Company (WDFC) will report their results during the day and at the post-market.

Futures on US indices demonstrate restrained negative dynamics. We assess the balance of risks for the upcoming trades as neutral with moderate volatility. We focus on S&P 500 fluctuations in the range of 6880-6960 points (from -0.6% to +0.6% to the previous session's closing level).

- Shares of Lockheed Martin (LMT), Northrop Grumman (NOC ) and General Dynamics (GD) reacted with a 4-5% drop to the above-mentioned statements of Trump about the ban on dividends and buyback. At the premarket, their quotations are rising within 5-7% on the background of the US President's announced plans to significantly increase the military budget.

- Globus Medical (GMED) securities are up more than 8% ahead of the opening of the main session as the company reported significantly better than forecasts and provided an optimistic guideline for 2026, projecting revenue growth to $3.18 billion to $3.22 billion.

- Resources Connection (RGP) shares were falling 11% in the premarket after posting a weak report. The company's revenue fell 19.2% year-over-year to $117.7 million, and gross margin fell to 37.1%, missing estimates. The company posted a net loss of $12.7 million, largely due to one-time expenses of $11.9 million for CEO changes and staff reductions.

- The announcement of a $130 million public offering caused Phathom Pharmaceuticals (PHAT) stock price to collapse 12% before the start of principal trading.

January 7 trading on American stock exchanges ended mostly in the negative. Dow Jones lost 0.94%, S&P 500 fell by 0.34%, Russell 2000 corrected by 0.29%, only Nasdaq 100 added a symbolic 0.06%. The health care sector (XLV: +0.99%) was the leader of growth, while utility providers (XLU: -2.42%) were the outsiders.

The market has taken a pause after recent capital flows into cyclical sectors.

Shares of the "Magnificent Seven" showed mixed dynamics. Alphabet (GOOGL: +2.48%), which overtook Apple (AAPL: -0.77%) in terms of capitalization for the first time since 2019, was in higher demand from buyers.

The macro statistics published this Wednesday, January 7, formed a contradictory picture and did not have a significant impact on market expectations for rates. The ADP employment report for December recorded a 41k increase in new jobs against a consensus of 48k. The number of open JOLTS job openings for November was 7.146 million against average expectations of 7.726 million. This was further evidence of a cooling labor market. At the same time, ISM's ISM Services Business Activity Index for December rose from November's 52.6 points to its highest level since October 2024 at 54.4, although a decline to 52.2 points was expected. This dynamics indicates the stability of the key sector of the economy.

Donald Trump announced his intention to ban large institutional investors from buying single-family homes, which put pressure on the shares of residential real estate-related funds. The situation around Venezuela continued to put pressure on oil prices. Investors are cautious ahead of the release of the labor market report on Friday.

- AbbVie (ABBV: +4.2%) denied a WSJ report about negotiations on the purchase of Revolution Medicines, which caused positive dynamics of its quotations.

- GameStop (GME: +3.1%) announced an option package for CEO Ryan Cohen tied to extremely ambitious goals, including reaching $100 billion in capitalization.

- AAR (AIR: +2.1%) reported a 16% year-over-year increase in sales for the quarter due to strong component demand and gave a solid outlook.

- Donald Trump's announcement of plans to ban large institutional investors from buying single-family homes triggered a selloff in shares of Blackstone (BX: -5.6%) and other companies related to this segment of the market.

This article was AI-translated and verified by a human editor