OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 -0.07%) this morning are down -0.11% and European stocks are down -0.17% as they consolidate this week’s gains in U.S. stock indexes to record highs and to 2-1/4 year highs in European bourses. The dollar moved lower and T-note prices ticked up in overnight trading on the expectations that President Trump this afternoon will appoint Jerome Powell as the next Fed Chair. The markets expect Powell to keep outgoing Fed Chair Yellen’s cautious approach to withdrawing stimulus. The markets also await the rollout today by Republican House leaders of their tax reform plans. Losses in European stocks were contained after German Oct unemployment fell more than expected and the unemployment rate held at a record low. Asian stocks settled mostly lower: Japan +0.53%, Hong Kong -0.26%, China -0.37%, Taiwan -0.17%, Australia -0.10%, Singapore -0.33%, South Korea -0.36%, India -0.08%. Japan’s Nikkei Stock index bucked the trend of weaker Asian markets and rose to a new 21-1/3 year high, led by a 5% jump in Honda Motor, after the company raised its annual operating profit forecast and announced a share buyback. Also, an unexpected jump in Japan Oct consumer confidence to a 4-year high lifted Japanese stocks.

The dollar index (DXY00 -0.22%) is down -0.18%. EUR/USD (^EURUSD) is up +0.25%. USD/JPY (^USDJPY) is down -0.06%.

Dec 10-year T-note prices (ZNZ17 +0.06%) are up +1 tick.

German Oct unemployment fell -11,000 to 2.495 million, better than expectations of -10,000. The Oct unemployment rate held at a record low of 5.6%, right on expectations.

The German Oct Markit/BME manufacturing PMI was revised up to 60.6 from the previously reported 60.5, the strongest pace of expansion in 6-1/3 years.

The Eurozone Oct Markit manufacturing PMI was revised downward to 58.5 from the previously reported 58.6, still the highest pace of expansion in 7-1/2 years.

Japan Oct consumer confidence unexpectedly rose +0.6 to 44.5, stronger than expectations of -0.3 to 43.6 and a 4-year high.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Oct Challenger job cuts (Sep -27.0% y/y), (2) weekly initial unemployment claims (expected +2,000 to 235,000, previous +10,000 to 233,000) and continuing claims (expected +1,000 to 1.894 million, previous -3,000 to 1.893 million), (3) Q3 non-farm productivity (expected +2.6%, Q2 +1.5%. Q3 unit labor costs expected +0.4%, Q2 +0.2%), (4) New York Fed President William Dudley delivers closing remarks at an Alternative Reference Rates Committee Roundtable, (5) USDA weekly Export Sales.