Good morning. Today is the 102nd Annual NYSE Tree Lighting. Proud to say the tree comes from historic Peekskill, 5 minutes from my house. Swing by the Financial District today and get a firehose of Holiday cheer. Yesterday S&P futures were trading modestly higher before a report that Microsoft was lowering AI sales quotas for its reps sent futures lower as we headed towards the Open. Microsoft denied the report however and the S&P 500 recovered throughout the day. The index finished just off its highs, up 0.3% while the equal-weight outperformed and small caps were sharply higher as the Russell 2000 jumped 2%. Theme baskets (nuclear, robotics, space, etc.) saw strong gains. The November ADP employment report came in below expectations. Job losses were completely driven by small businesses, adding to worry about the K-shaped economy but also further cementing rate cut expectations next week. S&P futures weren’t doing much this morning but moved higher after Meta started to gain on reports it will be making cuts to its Metaverse business. Futures are now up modestly, near the highs of the day. Employment data painted a stronger picture of the labor market today. However, futures and yields didn’t react too much overall. Yields moved a little higher after a sharp decline in Challenger job cuts, and then again after claims data fell versus last week. It looks like it was the first sub-200k data since January ’24 and lowest since Sept. ’22. Rates are moving off those levels however, with Treasury yields currently up 1-2bp across the curve.

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