Investing.com - Joe Biden signals China's status quo will not return; Salesforce acquired Slack for $ 27.7 billion; the market is preparing to take a breather; UK becomes first western country to approve COVID-19 vaccine; ADP To Release Private Sector Employment Report For November; oil prices fluctuate as OPEC + members squabble over yet another surge in US oil inventories. Here's what you need to know about the financial market on Wednesday December 2.
1. Biden will keep the tariffs imposed by Trump on goods from China for now
US President-elect Joe Biden has said he will not immediately lift import tariffs on goods from China when he comes to power in January, signaling that trade relations between the world's two largest economies are likely to remain tense even after Donald Trump will leave the White House.
“I'm not going to take any immediate steps, and the same goes for tariffs,” Biden told the New York Times..
Biden said he would pursue policies against China's "abuses" such as "intellectual property theft, dumping of goods, illegal corporate subsidies, and coercion of technology transfers" from US companies to Chinese partners..
Also in an interview, Biden reiterated his willingness to join the UN-backed JCPOA agreement with Iran (Joint Comprehensive Plan of Action on Iran's Nuclear Program), if strict adherence to the agreement can be verified..
2. Salesforce takes over Slack
Salesforce agreed to buy Slack for $ 27.7 billion in its second 11-figure M&A deal (M&A) a week after S&P Global invested $ 44 billion in IHS Markit.
The deal will strengthen Salesforce's presence in the enterprise software market, and is directly aimed at driving stiffer competition with Microsoft, whose Teams app has slowed Slack sales growth since its introduction last year..
The deal - the largest in Salesforce history - will also give Slack shareholders a dividend payout that seemed unlikely for much of the past 18 months..
3. The global rally in the market is fading, but the "party" on the metals market continues
Growth in global stocks stopped overnight after a tumultuous early December, fueled by more encouraging news about vaccines. However, by morning in Europe, even the news that the UK approved the emergency use of the Pfizer and BioNTech vaccine for COVID-19 was not enough to support growth in Europe, and the reference STOXX 600 fell by 0.9% in the morning..
The US stock market will also open lower after Monday's S&The P 500 and the Nasdaq Composite closed at new record highs. By 06:30 am ET (11:30 GMT) {{8873 | Dow Jones 30}} futures were down 106 points, or 0.4%, while S&P 500 & Nasdaq Composite Futures Down 0.2%.
The situation is different in the currency and metals markets, where the weakness of the dollar continues to support both precious and industrial metals. Copper hit a seven-year high this week, while aluminum futures immediately peaked in more than two years. Meanwhile, the dollar index fell to a new 30-month low.
4. Renewal of incentive negotiations, focus on ADP
The dollar's weakness was driven in part by expectations of further easing of monetary policy and an expansion of fiscal policy after the peaceful Janet Yellen takes over the levers of power. Yellen warns of "ruin" if more is not done now to support the economy amid rising coronavirus infections.
Against this backdrop, talks on a fiscal stimulus package resumed on Tuesday for the first time since the election, but soon met with opposition from Senate leader Mitch McConnell..
Treasury Secretary Mnuchin and Fed Chairman Power will continue their congressional appearances later today, but are unlikely to add anything to the comments made on Tuesday..
Of greater interest is the November ADP Private Sector Employment Report, which is due out at 08:15 am ET (13:15 GMT). According to forecasts, employment is expected to increase by 410 thousand jobs from October.
5. Oil prices fluctuate due to disputes in OPEC and rising US inventories
Crude oil prices fell amid doubts about OPEC's production policy and under pressure from news of an increase in US oil inventories for the third week in a row.
Data from the American Petroleum Institute (API) showed that crude oil inventories rose more than 4 million barrels last week, much more than expected. While the weekly consumption schedule is difficult to understand due to Thanksgiving distortions, the numbers seem to support the notion that U.S. demand is eroding as restrictions on doing business and social events tighten..
Government reserves data are due to be released at 10:30 am ET (15:30 GMT) and OPEC prepares for day three of talks on whether to slightly increase production in January.
US crude prices fell 0.7% to $ 44.42 a barrel by 06:30 am ET (11:30 GMT), while Brent crude fell 0.5% to $ 47.20.
By Jeffrey Smith
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