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The U.S. tax-cut bill advances toward passage, Australia’s prime minister wins a reprieve and Donald Trump prepares to call out China as a threat. Here are some of the things people in markets are talking about.
Tax Vote
The fractious Republican caucus in the Senate has lined itself up behind compromise tax-reform legislation, the culmination of a six-week sprint designed to deliver a major policy victory for their party and President Donald Trump before year’s end. With corporate and individual tax rates set to fall, a preliminary score from the congressional Joint Committee on Taxation showed the bill increasing federal deficits by $1.46 trillion over 10 years -- before accounting for any economic growth that might result. Votes are planned in the House and Senate by the middle of the week. Trump predicted the economy is “going to start to rock” thanks to the legislation.
Bitcoin Futures
The world’s biggest exchange starts trading futures in bitcoin at the start of the week, the latest step toward mainstream recognition of the cryptocurrency that has garnered attention for its massive run-up in price this year. The CME Group Inc. will be following its Chicago rival Cboe Global Markets Inc. in introducing derivatives on bitcoin, which has surpassed $19,000 this month after starting the year under $1,000. Having futures contracts will allow investors to short, or bet against it, as well as get exposure to the cryptocurrency on a regulated exchange.
China’s Challenge
In a demonstration of how successfully China is moving up the value chain in global production, an electric-car maker from the country has launched sales of its first vehicle just three years after its foundation, with a model that undercuts the price of a rival from pioneer Tesla Inc. The move comes days after news that China’s top smartphone makers are moving to challenge Apple Inc. on its home turf in the U.S., with Huawei Technologies and Xiaomi Corp. in talks with American wireless operators to sell their flagship products to consumers as soon as next year. The increasing competition of Chinese value-added products presents a challenge to the U.S., which has recorded record trade deficits thanks to its trading partner’s low costs. President Trump plans to mention China in a keynote national-security speech scheduled for Monday, when he will call out the country for engaging in “economic aggression,” the Financial Times says.
Australian Politics
A by-election shored up Prime Minister Malcolm Turnbull’s government, restoring his majority in the lower house of parliament. John Alexander, of Turnbull’s Liberal Party, will return to parliament after claiming victory in the district of Bennelong, defeating Labor candidate Kristina Keneally, a top-tier contender, as a former leader of the respective state. The win is a reprieve for Turnbull, who had lost his majority amid a citizenship fiasco gripping parliament. More than a dozen lawmakers across various parties have been caught out by a constitutional rule that bars dual nationals from being parliamentarians -- with some unaware their parents’ heritage sometimes automatically bestows them with citizenship of other nations. While Turnbull’s grip on the helm tightened for now, Labor leader Bill Shorten said that if the marginal swing toward Labor were replicated at the next national election due by 2019, Turnbull would be ousted.
Markets
U.S. stocks rallied to new highs on Friday and the dollar strengthened as the tax bill made progress in Congress. The S&P 500 Index, Dow Jones Industrial Average and Nasdaq 100 Stock Index closed at records. Asian investor focus turns to the Bank of Japan, which meets to set policy this week amid lingering suspicions among some market players that Governor Haruhiko Kuroda may fine tune stimulus next year. Other central banks setting policy this week are in the Czech Republic, Hungary, Taiwan and Thailand. Athletic wear giant Nike Inc., FedEx Corp., CarMax Inc., Bed, Bath & Beyond, drugstore operator Rite Aid Corp. and Micron Technology Inc. are among companies scheduled to announce earnings this week. The U.S. and U.K. update their estimates for third-quarter GDP and China releases property-price data.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- U.S. Central Intelligence Agency information helped to thwart an attack in Russia.
- With box-office receipts like these, there may never be a last jedi.
- Canada investigates the suspicious deaths of a billionaire couple.
- Ex-U.K. Prime Minister David Cameron is set to take a role in a U.K.-China development fund.
- A Hongkonger has become first from the city to hike the whole Appalachian Trail.