By Lorcan Roche Kelly
Quid pro quo
Transcripts of Gordon Sondland’s testimony to House impeachment panels undermine the assertions by President Donald Trump and his allies that there was nothing unusual about the administration’s contacts with Ukraine. Sondland, a Trump donor serving as ambassador to the European Union, testified that by early September he presumed that withholding $400 million of aid was tied to getting Ukraine to announce an investigation into Joe Biden’s son’s activities in the country. There was also bad news for the president in off-year elections in Virginia where Democrats seized control of both houses of the legislature from Republicans for the first time in 26 years.
The IHS Markit composite Purchasing Managers’ Index for the euro area edged up to 50.6 in October, showing growth prospects for the common currency region remain in the doldrums. While the biggest drag on the reading continues to be German manufacturing, there were some early signs of improvement in factory orders data this morning. The stand-out performer is France, with the country’s progress particularly stark when compared to its larger neighbor.
Xerox Holdings Corp. is considering a cash-stock offer for the $27 billion PC giant HP Inc., according to a report by the Wall Street Journal. It is unclear how Xerox would fund the acquisition of a company several times its market value, but the board did decide recently to sell its stake in Fuji Xerox for $2.3 billion. Elsewhere, Walgreens Boots Alliance Inc. is looking at a potential deal to take the company private in what could become the largest leveraged buyout in history.
Without any new trade developments to give extra impetus to the rally, markets are having a quiet session. Overnight, the MSCI Asia Pacific Index slipped 0.1% while Japan’s Topix index closed broadly unchanged. In Europe, the Stoxx 600 Index was down 0.1% at 5:45 a.m. Eastern Time. S&P 500 futures pointed to a flat open, the 10-year Treasury yield was at 1.846% and gold was slightly higher.
Dallas Fed President Robert Kaplan yesterday said that he sees the steepening yield curve as a sign monetary policy is in the right place. Today we hear from Chicago Fed President Charles Evans, New York Fed President John Williams and Philadelphia Fed President Patrick Harker. In oil news, the EIA releases its crude investory report at 10:30 a.m. while Brazil is set to auction oil prospects in giant offshore fields. Earnings today come from Qualcomm Inc., CVS Health Corp, and The New York Times Co., among many others. Also keep an eye on Uber Technologies Inc. shares, with the lockup period ending today possibly leading to a flood of shares in the ride hailing giant hitting the market.