Good morning! Here’s what you need to know in markets on Wednesday.
Masayoshi Son, the CEO of the Japanese telecom SoftBank, announced Tuesday that his company will invest $50 billion (£39.5 billion) and bring 50,000 jobs to the US after he met with President-elect Donald Trump. According to The Wall Street Journal, Son told reporters at Trump Tower that the investment would come from a $100 billion (£79 billion) fund created in partnership with the Saudi Arabia sovereign-wealth fund and other investors.
The UK government has agreed to set out its plans for Brexit, in a last minute attempt to avoid a potentially humiliating Commons defeat. The Labour party was due to propose a motion tomorrow calling on the government to publish their Brexit plans in advance of triggering Article 50.
Foxconn, the world’s largest contract electronics manufacturer and a major Apple supplier, said on Wednesday that it was in preliminary discussions to expand its operations in the United States. “While the scope of the potential investment has not been determined, we will announce the details of any plans following the completion of direct discussions between our leadership and the relevant US officials,” it said in a statement.
US stocks finished higher but little changed on Tuesday, and the Dow closed at an all-time high. Crude oil fell for the first day since OPEC agreed to cut production last Wednesday.
Asian stock markets followed the US higher. Japan’s Nikkei closed up 0.74%, the Hong Kong Hang Seng is up 0.34% at the time of writing (6.27 a.m. GMT/1.27 a.m. ET), and the Shanghai Composite is up 0.40%.
Manufacturing and industrial production figures are coming. The numbers for October are due at 9.30 a.m. GMT (4.30 a.m. ET). Economists are expecting monthly growth of 0.5% from British manufacturing and 0.2% from industry. Yearly growth is forecast to be 0.8% for manufacturing and 0.5% for industry.
Credit Suisse is stepping up cost-cutting plans and reducing some profit goals. Bloomberg reports that the Zurich-based bank is targeting an operating cost base of less than 17 billion Swiss francs (£13.2 billion, $16.8 billion) by 2018, down from an earlier goal of below 18 billion francs, according to a statement Wednesday on its website.
Standard Chartered, the FTSE 100 emerging markets-focused bank, is looking at setting up a legal base in either Dublin or Frankfurt to ensure it can continue doing business in the European Union following Brexit, according to the Telegraph. Banks based in the UK are fearful that they will lose their so-called passporting rights, which allow them to sell their services across the EU, once Britain leaves Europe.
The global asset management industry has been disrupted, according to a new report by Moody’s Investor Services in which it downgraded the industry to negative. A combination of lacklustre active management performance, global regulation, and increasing cost consciousness has led investors to move away from actively managed funds and into low-cost passive products like exchange-traded funds, or ETFs.
David Kostin, the chief US equity strategist at Goldman Sachs, thinks there is good news coming in 2017, but investors shouldn’t be complacent. Kostin and his team project that the S&P 500 will rise to 2,400 next year, though a late sell-off will bring the index down to 2,300 by year-end.
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