The Wednesday Market Minute
- Global stocks hover near record highs despite political risks in Europe and the United States, boosted by ongoing China trade optimism.
- House Democrats prepare to vote on two articles of impeachment against President Donald Trump later today, underscoring political divisions in Washington heading into next year's elections.
- UK PM Boris Johnson confirms plans to set a hard 2020 deadline for EU trade talks as part of his maiden legislation to parliament this week.
- European edge higher after a key reading of German business morale rises to the highest level in at least six months.
- Global oil prices drift lower as the dollar climbs higher and API data shows a bigger-than-expected 4.7 million barrel increase in domestic crude stocks.
- Wall Street futures set for modest gains for both the Dow and the S&P 500, ahead of Q2 earnings from General Mills before the open and chipmaker Micron after the closing of trading .
U.S. equity futures edged higher Wednesday, while global stocks hovered near all-time highs, as investors looked to extend a five-day winning streak on Wall Street even as political risks on either side of the Atlantic keep risk appetite in check.
House Democrats are set to vote on two articles of impeachment against President Donald Trump later today in a move that is unlikely to ultimately remove him from office but will nonetheless underscore the ongoing political divisions in Washington heading into next year's elections.
Trump accused Democratic lawmakers, including House Speaker Nancy Pelosi, of "violating your oaths of office, you are breaking your allegiance to the Constitution" in a furious six-page letter yesterday that outlines the White House's view of the controversial proceedings.
Pelosi, in a letter to House Democrats, insisted that "the facts have made clear that the President abused his power for his own personal, political benefit and that he obstructed Congress as he demanded that he is above accountability, above the Constitution and above the American people."
Stronger-than-expected November housing data, however, which indicated yesterday that building permits rose to the highest levels in more than a decade, continue to support the bullish case for U.S. stocks, which have gained more than 27.3% so far this year, heading into the final trading days prior to the Christmas holidays.
Futures contracts to the Dow Jones Industrial Average suggest a 33 point opening bell gain, while those linked to the S&P are indicating a 2.8 point bump higher for the broader benchmark ahead of earnings from General Mills (GIS) - Get General Mills, Inc. (GIS) Report and chipmaker Micron Technology (MU) - Get Micron Technology, Inc. (MU) Report.
FedEx Corp FDX shares were a notable early-market mover, falling 7.5% in pre-market trading after the world's biggest package delivery group issued its second profit warning of the year amid slowing global trade and increasing pressures from rival shipping companies.
In Europe, Prime Minister Boris Johnson's move to set a firm December 2020 deadline for Britain to either reach a comprehensive trade agreement with the European Union or crash out of the bloc on WTO terms continues to clip gains for the pound, while unsettling broader European markets which continue to find themselves at risk of trade reprisals from Washington.
Stocks in the region did get a boost, however, by the strongest reading for German business morale in at least six months, as the closely-watched Ifo index indicated the bloc's largest economy is "heading into the new Year with more confidence" after barely avoiding recession in the third quarter.
Europe's Stoxx 600 benchmark was seen 0.11% higher by mid-morning in Frankfurt, despite flatlining markets in Germany, while Britain's export-focused FTSE 100 gained 0.23% as the pound remained pressured at 1.3118 against the U.S. dollar following its biggest decline in more than a year yesterday.
Overnight in Asia, regional stocks edged 0.12% higher after the People's Bank of China trimmed one of its key repo lending rates in order to support the country's banking sector heading into the final months of the lunar year. Japan's Nikkei 225, meanwhile, shed 0.55% after the yen held onto gains at 109.44 against the greenback and pressured export-led companies on the benchmark.
Global oil prices were pressured by both a strong U.S. dollar, which bumped higher against a basket of six global currencies following Tuesday's housing data, and figures from the American Petroleum Institute which showed domestic crude stocks rose by a bigger-than-expected 4.7 million barrels last week.
Brent crude contracts for February delivery, the global benchmark, were seen 33 cents lower from their Tuesday close in New York and trading at $65.77 per barrel, while WTI contracts for January delivery were marked 60 cents lower at $60.34 per barrel.