Investing.com - Here are the top five things you need to know in financial markets on Monday, December 18:
1. CME launches bitcoin futures amid UBS skepticism
The Chicago Mercantile Exchange (CME) launched its own Bitcoin Futures on Sunday following rival CBOE’s own version just a week earlier.
As the world’s largest exchange jumps into the mix, it’s thought that the CME launch could garnish even more interest for the underlying digital currency.
Starting Monday, the CME product will allow investor to make bets on whether they believe the price will rise or fall. The second U.S. bitcoin futures launch is seen as another step towards big institutional investors warming up to a volatile asset that had until recently been accessible only via largely unregulated markets.
Bitcoin continues to have its detractors after having skyrocketed more than 1,800% year-to-date among the furor for alternative currencies in general. While many investors still bet that the rally will continue, UBS chairman Axel Weber said Monday that the digital currency was neither “valuable or sustainable”.
“As soon as small investors invest, the regulators are required.... I would welcome a discussion with regulators about cryptocurrencies,” Weber told Swiss newspaper NZZ.
2. Tax bill remains major market focus
The U.S. tax overhaul continues to be a major market focus with its final passage expected to happen this week.
On Friday, two wavering Republican senators through their weight behind the compromise bill, essentially cementing its approval. Both the House and the Senate are expected to pass the proposal by mid-week, paving the way for U.S. President Donald Trump’s signature.
Debate over the effectiveness of the measure still rages. While corporate and individual taxes are expected to initially fall, the congressional Joint Committee on Taxation calculated that the bill would increase federal deficits by $1.46 trillion over 10 years, before accounting for any economic growth that might result.
Economists have widely proclaimed that the tax cuts will not result in improvements to the economy based on their calculations that the bulk of the benefits will be for corporations and the wealthiest Americans.
However, Trump proclaimed that “tax cuts will increase investment in the American economy and in U.S. workers, leading to higher growth, higher wages, and more jobs!”
3. Global stocks celebrate U.S. tax reform as holidays arrive
Global stocks were broadly higher across the board on Monday as investors celebrated the imminent approval of Trump’s tax overhaul. U.S. stocks closed at record highs on Friday as news that Republicans holding out on approval gave their support.
U.S. futures looked set to continue the celebration on Monday in what will likely be a slow week as the Christmas holidays are just around the corner. At 5:58AM ET (10:58GMT), the blue-chip Dow futures rose by 120 points, or 0.49%, S&P 500 futures gained 9 points, or 0.34%, while the Nasdaq 100 futures traded up 37 points, or 0.56%.
Elsewhere, European bourses shared the bullish feeling with M&A activity also helping to pump prices with the benchmark Euro Stoxx 50 rising around 1%, as revisions to euro zone inflation in November showed no changes made.
Earlier, Asian shares edged up on Monday, with sentiment boosted by expectations U.S. lawmakers will pass a long-awaited tax bill this week, while Chinese stocks were soggy on concerns about liquidity and tighter regulations in the world's second largest economy. Japan’s Nikkei 225 closed with solid gains of 1.63%, but China’s Shanghai Composite ended Monday up a meager 0.05%.
4. Oil gains supported by pipeline outage, Nigeria strike
Oil prices moved higher on Monday amid an ongoing North Sea pipeline outage while a strike by Nigerian oil workers threatened its crude exports and weekly data showed a decrease in U.S. shale output.
North Sea operator Ineos declared force majeure on all oil and gas shipments through its Forties pipeline system last week after cracks were found.
In Nigeria, the Petroleum and Natural Gas Senior Staff Association of Nigeria, whose members mainly work in the upstream oil industry, started industrial action on Monday after talks with government agencies ended in deadlock, potentially hitting the country's production and exports.
Additionally, data from energy services firm Baker Hughes released after the market close on Friday showed that U.S. energy companies cut rigs drilling for new production for the first time in six weeks, to 747, in the week ended December 15.
U.S. crude oil futures rose 0.52% to $57.63 at 5:59AM ET (10:59GMT), while Brent oil traded up 0.33% to $63.44.
5. Hershey nears deal to acquire Amplify for $1.6 billion
Hershey was reported to be nearing a deal to buy the maker of SkinnyPop popcorn Amplify Snack Brands for $1.6 billion.
Citing sources familiar with the matter, CNBC reported that the deal would value Amplify at $12, a 71% premium to Friday’s closing price.
The move fits into Hershey’s move to expand from candy to salty snacks in a term the company has dubbed “snackfection”.
While waiting for the U.S. open, Amplify (NYSE:BETR) closed Friday at $7.00 while Hershey (NYSE:HSY) ended last week at $114.14.