European, U.S. Stock Futures Slide as Tax Reform, German Election Talk Weighs

European, U.S. Stock Futures Slide as Tax Reform, German Election Talk Weighs

German government talks broke down over the weekend, while competing tax
plans in the U.S. suggest compromise may be elusive heading into the
Thanksgiving break.

European
and U.S. equity futures were trading firmly lower Monday as investors
brace for a bumpy few sessions ahead of the Thanksgiving break amid
stalled tax reform in the United States and the prospect of new
elections in Germany.
Britain’s
FTSE 100 is slated to open around 20 points, or 0.2% lower at the start
of trading, according to financial bookmakers IG, with gains again
linked to the volatility of the pound, which topped the 1.32 mark in
overnight Asia trading. Germany’s DAX index is looking at a 100 point,
or 0.75% slump at the opening bell, while bourses around the region are
likely to experience similar declines.
The
euro slipped heavily against the U.S. dollar in Asia trading and was
marked at 1.1754 at the start of the European session. The weakness is
linked, in part, to the breakdown of coalition government talks in
Germany, where the pro-business Free Democrats walked out over the
weekend, leaving Chancellor Angela Merkel with the likely option of
forming a minority government with the Green party or calling fresh
elections in the new year.
On
Wall Street, the three major benchmarks are all expected to open lower
again Monday, extending Friday’s notable declines and adding further
pressure to the stalled global market rally as competing tax reform
proposals in the House and the Senate give rise to concern that a
compromise may not be found prior to the Christmas break.
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Dow
Jones Industrial Average mini futures were seen 48 points, or 0.21%
lower in overnight trading while mini futures for the broader S&P
500 were marked 6.5 points, or 0.25% into the red.
The
equity moves followed a weaker session in Asia where the Nikkei 225
gave back around 0.6% on the first session of the week to close at
22,261.7 points and the broadest measure of regional share prices, the
MSCI Asia ex-Japan index, slipped 0.05% thanks in part to weakness in
Chinese stocks linked to regulatory changes in the asset management
industry.
Global
oil prices, however, were largely inert in overnight and into the
European session as investors hold positions into next weeks OPEC
meeting in Vienna, where members will try to come to an agreement on
production cuts that have taken 1.8 million barrels per day from the
market and are expected to expire in March.
Brent
crude futures contracts for January delivery, the global benchmark,
were seen 10 cents lower at $63.58 while West Texas Intermediate crude
for the same month, which is more tightly linked to U.S. prices, were
marked 10 cents higher at $56.72 per barrel