Good morning and welcome back. Here’s what you need to know.
- Asian markets rose in overnight trading, with the Nikkei gaining 1.5 per cent and the Shanghai Composite up 0.25 per cent. European markets are mostly lower, with the exception of London and Spain. In the United States, futures markets have re-opened and point to a positive open.
- As Japanese stocks continue to rise, the Japanese yen continues to weaken against the dollar, driven by expectations that newly-elected Prime Minister Shinzo Abe will up the pressure on the Bank of Japan to implement more accommodative monetary policy in a bid to stimulate the beleaguered Japanese economy. Abe, who was inaugurated today, will hold a press conference at 7:30 AM ET. See Jeff Gundlach’s new Japan trade >
- U.S. holiday retail sales grew 0.7 per cent this year versus analysts’ expectations of 3 to 4 per cent growth according to MasterCars’s Spending Pulse. This year’s figures mark the most tepid pace of expansion since 2008, when the U.S. economy was in recession.
- The White House is considering expanding mortgage refinancing relief to include underwater borrowers who have mortgages not backed by government agencies, WSJ’s Nick Timiraos reports. The plan would require congressional authorization to modify the charters of the government-backed mortgage agencies, Fannie Mae and Freddie Mac.
- President Obama will leave Hawaii for the White House today, cutting his scheduled vacation short, in order to deal with “fiscal cliff” negotiations in Washington. As the January 1 deadline approaches, negotiations should dominate the newsflow in markets, and perhaps the best hope at this point is for a temporary deal that extends the timeline for tax hikes and spending cuts that gives politicians more time to negotiate.
- Toyota forecasts its sales will rise 2 per cent next year to record levels, owing to strong projected sales in the United States. The Japanese automaker expects overseas demand to counter what the company expects to be a 15 per cent drop in domestic sales due to the recent expiration of car subsidies in Japan.
- Chinese credit rating agency Dagong put the United States on “negative watch” on Christmas, citing “political conflict and the defect in national debt management” as its primary concern. Although Dagong’s judgment has no significant implications for markets, it serves as yet another reminder of the dangers the fractured U.S. political process poses to the country’s credit rating.
- The Syrian general who heads the nation’s military police force has defected to join rebel forces in an ongoing military conflict against the Assad regime. The defection marks perhaps the most significant shift in allegiances the conflict has seen in recent months, owing to the general’s high-ranking position in the Syrian military.
- The October reading of the S&P/Case-Shiller Home Price Index will be released at 9 AM ET. Economists expect the index to cool slightly to 145.93, down from 146.22 in September.
- At 10 AM ET, the Richmond Federal Reserve Manufacturing Report for the month of December is released. Economists expect the headline index to fall to 8 from last month’s 9 reading. Follow the releases LIVE on Money Game >
- BONUS: Jessica Simpson is pregnant with a second child.