Daily Market Outlook – Markets ended on a mixed note overnight amidst a lack of progress at US-China trade front while weaker retail outlook raised concerns over US consumer spending. Shares of Home Depot and Kohl’s fell after the retailers slashed their sales/profit forecasts, weighing on the S&P 500 (-0.1%) and the Dow (-0.4%). NASDAQ rose 0.2%, supported by tech stocks.
President Trump again threatened trade war escalation as he said that he would “raise the tariffs even higher” on Chinese goods if no deal is made with China, casting uncertainty surrounding the progress of the highly anticipated “phase one” trade deal in-the-making. Two US Congress bills passed over the past few hours may be the focus of today. On the positive side, the US House passed a bill extending temporary funding through 20 Dec to avert a widespread government shutdown that would have taken place later this week without it. The bill will go to Senate and is expected to be passed before midnight Thursday. On the flip side, the US Senate passed the Hong Kong Human Rights bill, one month after the House passed a similar bill. The two versions will be consolidated before going to President Trump to be signed into law. Given that the bills were passed unanimously in both chambers, a presidential veto could be overridden. China has previously warned that it will retaliate should the bill become law. The HK bill is likely to cloud the outlook of US/China trade talks.
