Morning Call For Monday, Dec. 4


OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.62%) this morning are up +0.62% at a new record high after the Senate on Saturday passed legislation that will cut the U.S. corporate tax rate to 20% from 35% in 2019. Also giving U.S. equity markets a boost is the legislation in the House that will push the next funding deadline to the Friday before Christmas, which will avoid a potential partial government shutdown this Friday and give U.S. legislators time to put together a spending bill. In addition, U.S. political risks eased after ABC news suspended a reporter they said that had made a “serious error” on his report on former national security adviser Flynn, saying that Trump had not asked Flynn to contact Russia as a presidential candidate, but that Trump had asked Flynn to contact Russia when he was president-elect about issues including working together to fight ISIS. European stocks are up +1.20% as industrial companies with significant revenue exposure to the U.S. also moved higher on the passage of U.S. tax cuts. Asian stocks settled mixed: Japan -0.49%, Hong Kong +0.22%, China -0.24%, Taiwan +0.49%, Australia -0.07%, Singapore -0.32%, South Korea +1.23%, India +0.11%.

The dollar index (DXY00 +0.33%) is up +0.27%. EUR/USD (^EURUSD) is down -0.34%. USD/JPY (^USDJPY) is up +0.64% at a 2-week high as the rally in stocks reduces the safe-haven demand for the yen.

Mar 10-year T-note prices (ZNH18 -0.24%) are down -8 ticks.

Eurozone Dec Sentix inventor confidence fell -2.9 to 31.1, weaker than expectations of -0.6 to 33.4.

Eurozone Oct PPI rose +0.4% m/m, stronger than expectations of +0.3% m/m, although Sep was revised downward to +0.5% m/m from the previously reported +0.6% m/m.

The Japan Nov consumer confidence index rose +0.4 to a 4-year high of 44.9. right on expectations.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Oct factory orders (expected -0.4%, Sep +1.4% and +0.7% ex transportation), (2) USDA weekly grain export inspections.

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