Weekly Market Outlook

Five Things You Need to Know to Start Your Day

The hard part starts for OPEC, German industrial orders surge, and Trump protectionist policies meet Republican resistance. Here are some of the things people in markets are talking about today.

Now the cut

Reaching a deal to cut production is one thing; getting an actual reduction in global output is another. Crude production from OPEC members is likely to have risen to a record 34.16 million barrels a day in November, with African members leading the gains, according to a Bloomberg survey of analysts. The organisation has invited 14 other crude producers, who together account for about a fifth of global production, to a meeting in Vienna this week aimed at securing wider production cuts. A barrel of West Texas Intermediate for January delivery was 20 cents lower at $51.59 by 5:17 a.m. ET.

German factory orders

Surprisingly strong factory data from Germany showed orders surged 4.9 percent in October, far ahead of analysts expectations for a 0.6 percent gain, with the growth led by a jump in demand for investment goods. Also in Germany this morning, energy utilities RWE AG and EON SE saw strong gains after the country’s top court ruled that the companies are entitled to compensation from the nation’s decision to exit nuclear energy for power generation.

EU puts pressure on Brexit

European Union governments are preparing to increase the pressure on U.K. Prime Minister Theresa May to secure a post-Brexit trade deal with the EU, or risk losing out on the transitional phase businesses want, according to officials familiar with the matter. It is proving a difficult week for May, with her lawyers having a difficult first day yesterday at the Supreme Court appeal over the triggering of Article 50, while she faces a possible rebellion by some of her party members in a debate in parliament tomorrow demanding her government publishes a plan for Brexit before starting exit negotiations. Bank of England Governor Mark Carney, meanwhile, has warned about the risks of pulling back from globalization, saying the world faces its first lost decade since the 1860s.

Market rise

Overnight, the MSCI Asia Pacific Index climbed 0.9 percent while Japan’s Topix index added 1.1 percent as shares there caught up with yesterday’s rally and were helped by weak yen. In Europe, the Stoxx 600 Index added 0.2 percent by 5:24 a.m. ET with banks and utilities leading the gains. S&P 500 futures were broadly unchanged.

Trump policy pushback

President-elect Donald Trump’s protectionist trade policies, in which he has threatened to use taxes as ‘retribution’ against U.S. companies that move jobs overseas, are prompting resistance from some Republican leaders. Barclays Plc, meanwhile, has calculated that Warren Buffett’s Berkshire Hathaway Inc. could get a boost of $29 billion to its book value should the PEOTUS follow through on the domestic corporate tax cuts he promises.