The Monday Market Minute
- Global stocks edge lower as investors retreat from Friday's job-fueled rally and prep for a series of major event risks later this week.
- China's November exports fall for a fourth consecutive month, trimming its U.S. trade surplus to $24.6 billion as tariffs and slowing demand bite.
- Oil prices ease after last week's OPEC-led rally, with production cuts holding U.S. crude near the $60 per barrel mark.
- Wall Street futures indicate modest opening bell declines ahead of Wednesday's Fed rate decision, an ECB policy meeting Thursday and UK election results before the market opens on Friday.
U.S. equity futures edged lower Monday ahead of what is set to be a major week of event risks for world markets as investors re-set expectations for growth and trade following stronger-than-expected domestic jobs data and weakening China exports.
The Federal Reserve will gather for its final two-day policy meeting of the year on Tuesday, while Christine Lagarde will chair her first meeting as President of the European Central Bank Thursday in Frankfurt. That same day, voters in Britain will head to the polls for their third national election in four years with the aim of delivering a majority government that can unlock the country's current Brexit deadlock.
House Democrats, meanwhile, could vote on articles of impeachment against President Donald Trump this week, focusing on allegations that he threatened to withhold financial aid to Ukraine in exchange for that country's co-operation with an investigation into one of his domestic political rivals.
Each of these comes amid a run-up to what could be a significant increase in U.S. tariffs on China-made goods, which are set to kick-in on December 15 and will include around $160 billion in consumer items such as toys and cellphones.
The mid-December tariff deadline, which was reiterated by President Donald Trump's key economic adviser Larry Kudlow last week, comes amid a protracted slowdown in China exports, which fell for a fourth consecutive month in November, narrowing its trade surplus with the United States to around $24.6 billion, according to customs data published Sunday in Beijing.
Wall Street futures appeared unmoved by the mountain of event risk ahead of it this week in early Monday trading, however, with contracts tied to the Dow Jones Industrial Average priced 26 points from Friday's near-record close of 28,015.06 points following a stronger-than-expected November payroll report that included 266,000 new jobs and the lowest unemployment rate -- 3.5% -- in at least 50 years.
Contracts linked to the S&P 500, meanwhile, suggest a modest 2 point decline for the broader benchmark of U.S. stocks, which has gained some 25.5% so far this year.
Macy's Inc. shares were an early mover of note, falling 2.7% in pre-market trading after analysts at Goldman Sachs lowered their rating on the struggling retailer after it slashed its full-year earnings outlook late last month.
European stocks were weaker in London and Frankfurt, as well, by mid-day trading as stronger currencies in both markets, as well as broader risk-off sentiment ahead of the week's key events clipped gains on major bourses around the region.
London's FTSE 100 was marked 0.17% lower in the opening minutes of trading as the pound jumped to a multi-month high of 1.3164 against the U.S. dollar following polling data indicating a comfortable win for Prime Minister Boris Johnson's Conservative Party in Thursday's general election.
Germany's trade-sensitive DAX index, meanwhile, slipped 0.12% after the weaker-than-expected China export data, pulling the region-wide Stoxx 600 benchmark 0.1% lower in the opening minutes of trading in Frankfurt.
Overnight in Asia, flat China stocks kept markets in the region in check, while a modestly softer yen helped Japan's Nikkei 225 to a 0.33% gain that closed the benchmark at 23,430.76 points.
Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, slipped modestly lower to 97.628 as investors prepped for Wednesday's Fed rate decision, which the CME Group's FedWatch tool suggests is 99.3% likely to make no changes to the central bank's current lending range of 1.5% to 1.75%.
Global oil prices were also softer following the surprise weakness in China exports, with traders also using the data to book profits from last week's 7% surge on the back of OPEC's decision to deepen its pact on production cuts by 500,000 barrels per day, taking official total to 1.7 million barrels, or around 1.7% of total global output.
Brent crude contracts for February delivery, the global benchmark, were seen 56 cents lower from their Friday close and trading at $63.83 per barrel, while WTI contracts for January delivery were marked 52 cents lower at $58.68 per barrel.