OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 -0.13%) this morning are down -0.12% as U.S. lawmakers need to come up with a spending bill by Friday to prevent a partial shutdown of the government. The most likely scenario is an extension of the government shutdown deadline until December 22. Weakness in energy stocks is undercutting the overall market with Jan WTI crude oil (CLF18 -1.27%) down -1.20% after the API late yesterday reported a +9.2 million bbl surge in U.S. gasoline inventories last week. European stocks are down -0.76% on negative carry-over from a decline in Asian markets as technology stocks sold-off. European stocks fell even after German Oct factory orders unexpectedly increased, a sign of economic strength in the Eurozone. Asian stocks settled lower: Japan -1.97%, Hong Kong -2.14%, China -0.29%, Taiwan -1.64%, Australia -0.44%, Singapore -1.19%, South Korea -1.54%, India -0.63%. Asian markets moved lower, led by losses in electronics makers and auto producers, as China’s Shanghai Composite posted a 3-1/2 month low and Japan’s Nikkei Stock Index slid to a 2-1/2 week low. 

The dollar index (DXY00 +0.03%) is up +0.03%. EUR/USD (^EURUSD) is down -0.13%. USD/JPY (^USDJPY) is down -0.36%.

Mar 10-year T-note prices (ZNH18 +0.14%) are up +4.5 ticks.

German Oct factory orders unexpectedly rose +0.5% m/m, stronger than expectations of -0.2% m/m.

ECB Executive Board member Mersch said the ECB faces the risk of keeping its monetary policy too accommodative for too long as “the recovery in the Eurozone continues to develop robustly and employment has increased markedly. Wages, as well as underlying inflation, seem to have made a trend reversal.”

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) weekly MBA mortgage applications (previous -3.1% with purchase sub-index +1.8% and refi sub-index -7.7%), (2) Nov ADP employment (expected +190,000, Oct +235,000), (3) revised Q3 non-farm productivity (expected +3.3%, previous +3.0%) and revised Q3 unit labor costs (expected +0.2%, previous +0.5%), (4) EIA weekly Petroleum Status Report.