The Opener
Published
Wall Street's ability to shrug off Brazil's political shock yesterday, with the Dow and Nasdaq closing higher even as Bovespa suffered its worst day since 2020, is being tested again overnight by a thicker stack of geopolitical risk spanning Ukraine, the Gulf, and Europe's auto sector.
Russia launched 16 ballistic missiles and more than 280 drones at Ukraine overnight, according to President Zelenskiy, who says delays in Western air-defense supplies are "directly helping Russia." Putin held calls with Finland's Stubb and Norway's Stoere on the conflict, the Kremlin confirmed, while Germany's Merz warned it would be "absolutely unacceptable" for the US, Russia and China to reach any understanding without Ukraine at the table. Separately, Saudi Arabia contained a fire near the Ras Tanura oil hub after an attack and issued a danger warning for Najran and Khamis Mushait, even as OPEC+ is expected to hold output targets steady at its Sunday meeting.
Europe's industrial strain is showing up in autos: BMW, Volkswagen and Stellantis shares slipped after Mercedes-Benz cut its adjusted return-on-sales outlook for its car business to 2-3%, and Porsche's CFO said he has no knowledge of any broader US tariff relief talks at Volkswagen, assuming tariffs stay in place. France's consumer confidence fell to its lowest since June 2013, and the France-Germany 10-year yield spread widened 6 basis points to 160, both pointing to deepening eurozone unease. China's foreign ministry, meanwhile, urged the EU not to "abuse trade remedy tools" as Brussels weighs new trade measures, and China's 5-year government bond yield dropped to a record low.
Against that backdrop, premarket trading still shows pockets of strength tied to yesterday's earnings. Ferrovial is up 5.2% to $52.97, Credo Technology is up 4.5%, and Cadence Design is up 3.0% after its guidance raise, alongside gains in EPR Properties, Woodward, Navient and SK hynix. Apple's iPhone sales in India reportedly fell as much as 30% during the festive season on higher prices and weaker promotions, and Meta Platforms slipped 0.5% premarket after pricing a stock offering.
The session sets up a contrast between company-specific strength, led by AI-infrastructure and chip-adjacent names, and a geopolitical backdrop that is broadening rather than narrowing, from Ukraine's air defense shortfalls to Gulf energy security to Europe's weakening auto and consumer data.
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