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Top 5 Things to Know in the Market on Tuesday

Investing.com -- Donald Trump says he may not do a deal with China until after the election next year, and his bad mood with France's Emmanuel Macron hasn't improved any either. He called the French President "insulting" and "disrespectful" ahead of today's NATO summit. Stocks fell and havens rose on the news. Elsewhere, Salesforce and Workday will report earnings, and the upcoming OPEC+ meeting give today's private-sector report on U.S. oil supplies added meaning. Here's what you need to know in financial markets on Tuesday, 3rd December.

1 Trump dangles trade deal delay

President Donald Trump raised the prospect of delaying a trade deal with China until after the 2020 election, rattling markets that have been happy to push ever higher on promises that a deal was just around the corner.

“In some ways, I like the idea of waiting until after the election for the China deal," Trump told reporters in London ahead of a summit of leaders from the NATO alliance. He added that China "want to make a deal now and we will see whether or not the deal is going to be right.”

Trump’s comments come less than two weeks before the next round of tariffs on Chinese imports is due to kick in. The new tariffs would affect a broad range of products, making it harder to cushion the impact of the policy on U.S. consumers. They also come one day after Trump announced new tariffs against steel and aluminum imports from Brazil and crisis-ridden Argentina, whom he accused of currency manipulation.

2. France to retaliate against Trump’s retaliation

The French government said it would retaliate against President Trump’s decision to impose tariffs of up to 100% on $2.4 billion of French goods, a measure that Trump styled on Monday as retaliation against France’s initiative to introduce a tax on digital services that affects mainly U.S. giants such as Facebook (NASDAQ:FB) and Amazon.com (NASDAQ:AMZN).

The U.S. Trade Representative’s office had also warned that other countries with digital taxes could also be in line for sanctions. They include Italy, Austria and Turkey, while the U.K. aims to introduce one from next year.

Finance Minister Bruno Le Maire said in a radio interview that the tariff plans are “unacceptable” and not worthy of an ally. On the subject of alliances – Trump said ahead of the NATO summit that French President Emmanuel Macron had been “disrespectful” in calling the alliance ‘brain-dead’ in a recent interview.

3. Stocks set to open lower

U.S. stock markets are set to extend Monday’s losses after heavy falls in Asia overnight which spilled over into European markets on Tuesday morning as Trump raised the possibility of not proceeding with the oft-promised ‘phase-1’ trade deal with China.

By 6:30 AM ET (1130 GMT), Dow futures were down 85 points or 0.3%, while S&P 500 futures were down 0.3% and Nasdaq 100 futures were down 0.4%.

Haven assets have outperformed as might be expected. The yield on the 10-year Treasury note fell five basis points to 1.79%, while gold futures rose to a two-week high of $1,476.65 a troy ounce.

4. Software updates due

Salesforce and Workday, two of the buzziest names in business software report after the closing bell Tuesday.

Salesforce’s earnings per share are expected to rise to 66c from 61c a year ago, while revenue is expected to grow to $4.45 billion from $3.39 billion.

Workday’s earnings are set to grow faster, albeit from a lower base, to 37c from 31c, on a 24% rise in revenue to $921 million.

5. Oil hit by tariff comments ahead of API data

Crude oil futures are battling to stay in positive territory after the latest outburst from the self-styled “Tariff Man” cast fresh doubt over the outlook for global demand next year, ahead of this week’s crucial meetings between OPEC and its allies.

By 6:30 AM ET, U.S. crude futures were up 0.2% at $56.06 a barrel, while the international benchmark Brent was up 0.1% at $60.95, both down over 1% from the highs they hit on Monday on reports of deeper output cuts from the cartel.

The meetings will put a sharper-than-usual spotlight on the American Petroleum Institute’s weekly update at 10:30 AM ET on U.S. oil supplies, which have registered some chunky stock builds in six of the last eight weeks. Estimates for the government data, due Wednesday, suggest the market expects a draw of 1.8 million barrels.

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