Here is what you need to know.
China’s services sector nears its lowest level in a decade. China’s Caixin-Markit Services PMI fell to 50.2 in November, hitting its lowest level since July 2014. Any reading below 50.0 would represent a services sector that is contracting, and would be the lowest since record-keeping began in November 2005. China’s yuan fell to a 5-year low in response to the news, sliding 0.6% to 6.5567 per dollar.
North Korea says it successfully tested a hydrogen bomb. North Korea says it has successfully tested a “miniaturized” hydrogen bomb. The Democratic People’s Republic of Korea announced the test on state TV hours after South Korea reported an artificial earthquake had occurred 30 miles north of the DPRK’s nuclear testing center. However, many experts are sceptical of the claims, suggesting North Korea’s state-run television likes to exaggerate or outright lie. In response to the news, the South Korean won weakened 0.8% to 1197.20 per dollar, a near 5.5-year low.
Crude oil is under pressure. West Texas Intermediate crude oil hit a low of $34.80 in early trade. Wednesday’s selling has not yet been able to take out the almost 7-year low of $33.98, which was set in December. Currently, WTI is trading lower by 2.5% at $35.07 per barrel. Elsewhere, Brent crude oil touched an 11-year low of $34.83 per barrel before recovering to its current $35.13.
A report says Valeant is naming a new CEO. The embattled pharmaceutical company is reportedly going to name a new CEO as Michael Pearson remains hospitalized with pneumonia. Current CFO Robert Rosiello and former CFO Howard Schiller are being considered for the temporary role.
Verizon wants to sell its data centres. Verizon is looking to sell its data centres for more than $2.5 billion, according to Reuters. Up for sale are 48 data centres, which generate EBITDA of about $275 million, someone close to the matter told Reuters. Verizon is being advised by Citigroup.
Virtu has been picked as the next NYSE market maker. Bloomberg reports, a notice sent to traders on the floor of the New York Stock Exchange revealed JPMorgan has chosen Virtu as the exchange’s next market maker. Virtu replaces KCG on Wednesday.
Monsanto reports ahead of the opening bell. The Bloomberg consensus expects the ag giant to lose $0.23 per share on revenue of $2.39 billion. Monsanto has guided for a loss of $0.28 per share.
Stock markets around most of the globe are lower. France’s CAC (-1.6%) leads the way lower in Europe, Overnight, Australia’s ASX (-1.1%) paced the decline while China’s Shanghai Composite (+2.3%) outperformed. S&P 500 futures are sharply lower, down 30.25 points at 1981.50.
The minutes from the December Fed meeting will be released. The minutes will provide more detail from the meeting which produced the first Fed rate hike since June 2006. Traders will be parsing the minutes closely for any clues as to when the Fed might hike again, and what the pace of the rate hike cycle might be.
US economic data picks up. ADP Employment Change kicks off a heavy morning of data at 8:15 a.m. ET, and is followed by the trade balance at 8:30 a.m. ET. Then, factory orders and ISM Services will cross the wires at 10 a.m. ET. Finally, crude oil inventories will be released at 10:30 a.m. ET. The US 10-year yield is down 5 basis points at 2.19%.