The Monday Market Minute

  • Global stocks gain amid renewed trade war optimism heading into a Thanksgiving holiday-shortened week with U.S. benchmark nears record highs.
  • China plans overhaul of intellectual property protections in move seen a key to reaching a phase one trade agreement with the United States.
  • Hong Kong holds local elections that deliver a resounding victory for pro democracy candidates in the China-controlled territory
  • European shares gains as merger deals add to market sentiment, with LVMH buying U.S. Jeweler Tiffany for just over $16 billion.
  • Wall Street futures suggest solid opening bell gains for all three benchmarks, with a 7 PM Eastern time speech from Fed Chairman Jerome Powell keeping investors focused throughout the session.

Market Snapshot

U.S. equity futures jumped higher Monday, pulling all three major benchmarks back towards all-time peaks, as investors added to bets of a near-term trade pact between Washington and Beijing and reacted to a mini-wave of merger deals that boosted market sentiment around the world.

China's move late Sunday, via a statement from the State Council and Communist Party's Central Office, to pledge major change to the way it protects international property rights supported a weekend narrative that a so-called Phase One trade agreement could be reached before the end of the year.

That view was echoed by U.S. national security adviser Robert O'Brien, who told a conference in Halifax, Nova Scotia that it was still "possible" to reach a deal, but cautioned that weekend elections in Hong Kong needed to proceed without violence or interference. The local polls in Hong Kong, which has been crippled by anti-Beijing protests for the past five months, delivered a resounding victory for pro-democracy candidates in the China-backed protectorate.

Two major merger deals over the weekend, including the biggest-ever in the luxury goods sector, a $16.2 billion takeover of U.S. jeweler Tiffany & Co. (TIF) - Get Report by France's LVMH Group  (LVMUY) , added to the session's positive tone, as did a $10 billion play by Switzerland's Novartis AG (NVS) - Get Report for cholesterol drug-maker Medicines Co. (MDCO) - Get Report

Wall Street futures looked on pace to test record highs Monday in the Thanksgiving holiday-shortened week, with contracts tied to the Dow Jones Industrial Average indicating a 90 point advance and those linked to the S&P 500 guiding for a 10 point gain for the broader benchmark.

Another takeover deal, this time involving state-side rivals Charles Schwab (SCHW) - Get Report and TD Ameritrade (AMTD) - Get Report , added to the early morning gains after the online brokerage groups agreed to a $26 billion merger that was widely reported on Friday.

Overnight in Asia, Japan's Nikkei 225 booked a solid 0.78% gain to bring the benchmark back towards its recent 13-month high, while the region-wide MSCI ex-Japan index added 0.66%, despite a mixed session for China-based equities, heading into the closing hours of trading. 

European stocks were also off to a solid start with basic resource and auto stocks driving the Stoxx 600 to an early 0.70% gain, led in part by a 0.6% rise for the trade-sensitive DAX index in Frankfurt and a 0.7% bump higher for the FTSE 100 in London.

Away from equities, the U.S. dollar index, which tracks the greenback against a basket of six global currencies, edged modestly lower to 98.22 amid the improved equity market sentiment, while benchmark 10-year Treasury note yields bumped to 1.786% ahead of a speech from Federal Reserve Chairman Jerome Powell later today in Providence, Rhode Island. 

Global oil prices added to recent gains amid the trade-pact optimism, as well as the weaker dollar, as trades covered bearish positions from last week and looked to next month's OPEC meeting in Vienna for a possible extension of the cartel's production cuts which are currently taking 1.2 million barrels of crude from the market each day.

Brent crude contracts for January delivery, the global benchmark, were seen 2 cents higher from their Friday close and trading at $63.41 per barrel, while WTI contracts for the same month were marked 2 cents higher at $57.79 per barrel.