Investing.com -- Two days of crucial meetings for the oil market kick off in Vienna, while Japan launched its biggest stimulus package in three years and Saudi Arabia prepares to close the books on the record-breaking IPO of oil company Saudi Aramco. There'll be more hints on the U.S. labor market ahead of the Big Reveal of the non-farm payrolls report on Friday, and there's a little more trade brinkmanship from China. Here's what you need to know in financial markets on Thursday, 5th December.
1. Shinzo Abe launches big fiscal stimulus package
Japan launched its biggest fiscal stimulus package in three years hoping to lifting an economy that has been hit by the Chinese slowdown, a separate trade war with South Korea, a rise in the domestic consumption tax and, not least, typhoons in the last 12 months.
The overall package of measures, at 13.2 trillion yen ($121 billion) was larger than expected, and is around 1.9% of expected gross domestic product over the 15 months through which it will be spread.
The news pushed the yen slightly lower against the dollar to 108.96 by 6:15 AM ET (1115 GMT).
2. OPEC warms up for the big one
The Organization of Petroleum Exporting Countries meets in Vienna today to hammer out a position on whether it should cut its output further next year to support world prices. The meeting is a prelude to another one with non-OPEC producers (most importantly, Russia), tomorrow.
Friday’s meeting will determine the fate of the so-called OPEC+ pact which is due to expire at the end of March. Bilateral meetings between ministers have so far yielded no real sense of the direction of travel. While some – especially Iraq – have talked about possibly deepening the existing production cuts by an additional 400,000 barrels a day, no-one has formally backed the idea in public.
U.S. crude futures were up 0.1% at $58.52, while the international benchmark Brent was up 0.5% at $63.33 a barrel.
3. Stocks set to open higher
U.S. stocks were set to open higher, with liquidity issues again trumping fears of a continued trade war.
By 6:15 AM ET (1115 GMT), Dow futures were up 113 points, or 0.4%, S&P 500 Futures were also up 0.4% and Nasdaq 100 futures were up a shade more, 0.5%. The Japanese Nikkei had also risen 0.5% overnight on the back of Abe's stimulus package.
There’s a broad range of earnings reports from the retail sector due, with Dollar General, Kroger, Tiffany & Co (NYSE:TIF) and cosmetics group Ulta Beauty all set to report. Slack may see something of a bounce after rising 1.9% in after-hours trading on Wednesday on the back of a stronger-than-expected outlook.
Saudi Arabia is also due to close the books on the initial public offering of Saudi Aramco.
4. Challenger Job Cuts, initial jobless claims
The monthly Challenger Job Cuts survey and weekly initial jobless claims take pride of place in Thursday’s data calendar, a day ahead of the definitive official labor market report for November.
The first signs, which came out on Wednesday, were not good: ADP’s assessment of only 67,000 private-sector jobs created last month was the weakest in six months, although the hiring component of the Institute for Supply Management’s non-manufacturing survey was one of the more robust parts of a weaker-than-expected report.
There will also be data for factory orders in October at 10 AM ET (1500 GMT). They’ll provide an interesting counterpoint to another set of disappointing factory orders out of Germany, which pointed to a weak fourth quarter with a 0.4% drop on the month that took the year-on-year decline to 5.5%.
5. Chinese brinkmanship
There’s an increasing air of brinkmanship in talks between the U.S. and China over trade, with Beijing repeating on Thursday that the U.S. needs to cut import tariffs as part of a phase-1 deal with China.
“The Chinese side believes that if the two sides reach a phase one deal, tariffs should be lowered accordingly,” Reuters reported Foreign Ministry spokesman Gao Feng as saying, adding that the two sides were maintaining close communication, despite Chinese annoyance at the U.S. forcing non-trade elements such as human rights and Hong Kong into the picture.
There is now only 10 days before a new round of U.S. tariffs kicks in, covering about $156 billion of Chinese imports annually.