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Top 5 Things to Watch on Wednesday, Dec. 18

Investing.com -- The House of Representatives is set to vote on articles of impeachment against President Donald Trump, setting up a trial in the Senate in January. Fiat Chrysler confirms its merger agreement with Peugeot , while German business confidence hits its highest in six months. Plus, the weekly report on U.S. oil supplies is due, along with earnings reports from Micron and General Mills. Here's what you need to know in financial markets on Wednesday, 18th December.

1. House set to vote on articles of impeachment

The House of Representatives is to vote on sending two articles of impeachment to the Senate, setting the stage for only the third impeachment trial of a U.S. President in history.

The vote is expected to play out along partisan lines, after last-minute wavering by some Democrat representatives came to nothing. A vote in favor of impeachment will pave the way for a trial in the Republican-controlled Senate in the new year.

Given the GOP’s control of the Senate and the requirement for a two-thirds majority, the odds of Donald Trump being removed from office still appear low.

2. Peugeot, Fiat Chrysler agree on forming world's 4th biggest auto group

Fiat Chrysler Automobiles (NYSE:FCAU) and France’s Peugeot (PA:PEUP) formally agreed the terms of the merger that they proposed at the end of October, a deal that will create the world’s fourth-largest automotive group behind Toyota (NYSE:TM), Volkswagen (DE:VOWG_p) and General Motors (NYSE:GM). Shares in both companies rose modestly.

The terms of the deal remain largely unchanged, meaning that FCA shareholders will get their $6.1 billion special dividend before the deal closes, while Peugeot will distribute its 46% stake in components group Faurecia (PA:EPED) to its shareholders.

The two groups are still basing their business plan - 3.8 billion euros ($4.1 billion) in synergies within four years, on the assumption of no plant closures. They’ve finessed the awkward issue of the French state’s double voting rights by saying that these won’t be carried over to the new group. But all strategic shareholders will receive new double voting rights after three years.

3. Stocks to open mixed

U.S. stock markets are set for a mixed opening in the absence of major news overnight, and with market participants’ thoughts slowly turning toward the Christmas and New Year holiday period.

By 6:20 AM ET (1120 GMT), all three major indexes were up less than 0.1%, with Dow futures up 14 points, S&P 500 futures up 1.6 points and Nasdaq 100 futures up 4.4 points.

Stocks to watch later will include Pacific Gas & Electric (NYSE:PCG), which won court approval for its $13.5 billion plan to settle with fire victims, along with General Mills, which reports before the open. Chipmaker Micron is also due to report earnings.

4. German business sentiment hits six-month high

German business confidence, as measured by the Ifo research institute, hit its highest level in six months, another indication that Europe’s largest economy, highly exposed to external trade, is stabilizing as the U.S. and China move toward putting their trade dispute on hold.

The overall business climate index rose to 96.3 from an upwardly revised 95.1 in November, with both expectations and the assessment of current conditions improving – albeit in services more than in manufacturing.

Clemens Fuest, the ifo president, said the figures were “good news” but noted that manufacturing remains “fragile”.

Elsewhere, Eurozone consumer inflation was confirmed at 1.0% in November, with the core rate running at 1.3%, well below the European Central Bank’s target.

5. Inventories due as crude hits three-month high

The U.S. government will publish its weekly assessment of U.S. oil supplies at 10:30 AM ET, with analysts expecting a net drawdown of 1.288 million barrels in inventories. Private estimates by the American Petroleum Institute, which have shown at best a spotty correlation in recent weeks, suggested oil stocks rose by 4.7 million barrels last week.

U.S. crude oil prices are taking a breather after hitting $60 a barrel for the first time since September on Tuesday, on the back of upbeat U.S. economic data. By 6:20 AM they were at $60.48 a barrel, down 0.6%, while Brent futures were down 0.4% at $65.83.

Speculative long interest hit its highest level since May last week, as hedge funds drew comfort from the measures announced by the OPEC+ group to curtail supply in the first quarter. Even so, many expect the market to stay oversupplied in the first half of 2020. IHSMarkit said on Tuesday it expects Brent prices to average only $57/bbl next year.

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