© Reuters
Investing.com – U.S. stock futures traded broadly flat on Wednesday, with traders consolidating the year's strong gains in the final week of the year. SoftBank received a hefty profit in the form of T-Mobile US shares Toyota announced a record November for global sales. The Chinese economy showed signs of life as the crude oil market continued to stare at turmoil in the Middle East.
1. Futures remain unchanged in the last trading week
U.S. stock futures traded broadly flat on Wednesday, consolidating after recent gains in the final trading week of the year.
At 05:00 ET (10:00 GMT), the contract was up just 3 points, down 1 point, and up 2 points.
The three major indexes closed higher on Tuesday as traders returned to Wall Street after the Christmas break, although volumes were light. The blue chip gained 160 points or 0.4%, the broad-based index also rose 0.4% and the technology group rose 0.5%.
The gains add to an already strong year as investors grew confident that the Federal Reserve would begin cutting interest rates next year, having largely managed to control inflation without triggering a recession.
With only three sessions remaining in the 2023 trading year, the DJIA and S&P 500 are expected to end 2023 13% and 24% higher, respectively, while the Nasdaq Composite has jumped an impressive 44%.
2. SoftBank receives unexpected shares in T-Mobile
SoftBank Group (TYO:) announced overnight that it will acquire approximately $7.59 billion worth of shares in T-Mobile US (NASDAQ:) under the terms set out in the merger agreement between its U.S. telecommunications company Sprint and T-Mobile US dollars will be received.
The news sent the Japanese conglomerate's shares up more than 4%, their biggest gain in more than a month.
Softbank shares have underperformed the broader market this year, with the group trading at a discount of around 45.5% to the value of its assets after falling last month following the bankruptcy of once-successful flexible office space provider WeWork reported its fourth quarterly loss in a row.
3. China's industrial profits jumped in November
There are growing signs that a range of growth-boosting measures to support a patchy recovery from the COVID-19 crisis in China could be having the desired effect, raising the likelihood of meeting the government's growth target of around 5% for this year becomes.
China's industrial profits rose 29.5% in November, up for a fourth month, as overall output improved. On an annual basis, it shrank 4.4%, further down from the 7.8% decline in January-October.
However, the economic recovery remains shaky given continued weakness in the real estate sector, increasing deflationary pressures and weak global demand, suggesting that further stimulus measures may still be needed.
4. Toyota is heading for a sales record in 2023
Toyota (NYSE:), the world's largest automaker, received a belated Christmas present this week after data showed its global production rose 11% to a record level in November.
Domestic sales rose 27% for the month, with both the US and China rising 17%, while sales in Europe rose 15%. This puts the car giant on track to achieve global sales of more than 10 million in 2023 – also a record.
Toyota struggled with global supply chain disruptions last year and had to announce a recall of 1.1 million vehicles earlier this month due to decades-old safety concerns.
5. Oil is consolidating, with Red Sea shipping taking center stage
Oil prices fell slightly on Wednesday after rising sharply in the previous session as traders continued to eye shipping in the Red Sea amid broader tensions in the Middle East.
At 5 a.m. ET, futures were trading 0.2% lower at $75.41 a barrel, while the contract fell 0.1% to $80.75 a barrel.
Both benchmark contracts rose over 2% on Tuesday as further attacks by Yemen's Iran-backed Houthi militia on ships in the Red Sea raised further concerns about shipping disruptions.
However, major shipping companies such as Maersk and France's CMA CGM have resumed transits through the Red Sea after deploying a multinational task force to the region, while Germany's Hapag-Lloyd is expected to decide whether to resume shipments later on Wednesday.
The crude oil market also got a boost on Tuesday from news that the United States has agreed to buy three million barrels of oil to help replenish strategic petroleum reserves.
The Biden administration had conducted sales last year, including a record 180 million barrels, to help control oil prices after Russia's invasion of Ukraine.
The industry body's first weekly estimate of U.S. crude oil inventories is expected later in the session, a day later than usual after the Christmas holiday.
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