Good morning. Here’s what you need to know:
- The International Monetary Fund (IMF) will decide today whether to include the Chinese yuan in its benchmark basket. The IMF is expected to announce that the yuan will join the US dollar, euro, British pound, and Japanese yen in its basket of reserve currencies, adding it to the group with special drawing rights. This inclusion would make the yuan more attractive to global central banks as a currency to store their foreign reserves. It would also increase demand from other money managers.
- More people shopped online than in stores during the Thanksgiving weekend, according to the National Retail Federation. SunTrust analysts noticed a decline in traffic, based on their “channel-check” visits to malls and retail outlets in the New York metro area and southeastern parts of the country. Importantly, many retailers began offering deep discounts long before the day after thanksgiving, and today, Cyber Monday. And for this reason, the New York Times noted that Cyber Monday may no longer be accurately described as the biggest online shopping day. Despite the decline in foot traffic, the NRF’s initial surveys show that more people shopped over the holiday weekend due to the deep discounts that were offered long in advance.
- However, preliminary data from analytics firm RetailNext indicated that overall sales fell 1.5%, while average shopper spending dropped 1.4%. ShopperTrak estimated a decrease from last year to a total of $12.1 billion. And so, it might be a few more days before we get a clear assessment of what overall sales were.
- AB InBev plans to sell two of SABMiller’s biggest beer brands to court favour from European regulators for its mega-merger. The Wall Street Journal reported, citing people familiar with the matter, that the company is considering selling Grolsch and Peroni. There’s no deal yet and it may not even happen, The Journal reported. Last month, the two companies announced they were merging in a $108 billion deal.
- US regulators may block the merger between Staples and Office Depot, according to the New York Post. Staples’ $6 billion bid may create one giant corporation that serves the largest government and corporate clients, the Post reported, citing two sources. The Federal Trade Commission is expected to decide whether to sue to stop the deal by December 8.
- European stocks rallied to a three-month high ahead of the European Central Bank’s monetary policy decision due on Thursday. The euro fell to a seven-month low of about 1.0563 against the dollar. ECB president Mario Draghi could announce an extension of the bank’s bond-buying program, signalling that more stimulus is needed for the euro economy.
- Morgan Stanley’s Adam Parker has joined his peers to forecast another year of soft returns for the S&P 500. The benchmark index would close 2016 at 2,175, marking a 4% rally from current levels, according to Parker in a client note this weekend. It’s not the end of the bull market, though, as returns are only slowing down mid-expansion.BMO’s Brian Belski and Bank of America Merrill Lynch’s Savita Subramanian are among the pros who have also put out this long-term, secular bull market call.
- Global markets are slightly higher. China’s Shanghai Composite index staged a rally after dropping 5% on Friday, to trade marginally in the green. Germany’s DAX was up by about 1%, or 105 points, and France’s CAC was up 0.65%, or 32 points. US stock futures were little changed.
- In economic data, Chicago PMI is due at 9:45 a.m. ET, pending home sales at 10:00 a.m., and the Dallas Fed manufacturing survey at 10:30. China’s manufacturing and non-manufacturing PMIs will cross at 8:00 p.m. and 8:45 p.m. respectively.
- The rest of the week is packed. It’s jobs week, meaning we’ll get the final employment report before the Federal Reserve’s meeting mid-December. Other data due this week include US auto sales, ISM Manufacturing, the Fed’s Beige Book, and the outcome of OPEC’s meeting.
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