Tax plan faces Senate hurdle, EU waits for more Brexit concessions, and bitcoin's wild week.
Senate up
The House yesterday approved its version
of legislation to overhaul the U.S. tax code in a 227-205 vote, passing
a key milestone in the administration’s plan to cut taxes across the
board for companies and individuals. The Senate Finance Committee
approved their – far different
– version of the legislation yesterday, which includes delaying
corporate tax cuts for a year. With voting going along party lines, it
remains critical that the GOP lose no more than two members, so the
legislation is likely to change on the Senate floor. The timeline remains tight to get a full vote effectively by the week after Thanksgiving.
Europe waits
There are doubts that a breakthrough
in Brexit negotiations can be achieved at the summit in December after
EU leaders said they are waiting for U.K. Prime Minister Theresa May to
deliver further concessions. Brexit Secretary David Davis said there
will be clarity on the divorce bill “in a few more weeks”
in a speech in Berlin yesterday. The mammoth task facing British
bureaucrats extricating the nation from the EU can be seen in a study
that finds 313 separate programs across departments preparing for the exit.
Bitcoin’s wild week
Bitcoin is closing in on $8,000 just days after suffering a 29 percent crash. The cryptocurrency touched $7,997.17 overnight and was trading at $7,860.12 at 5:40 a.m. Eastern Time. Its dominance may come under threat
from planned offshoots with bitcoin diamond, bitcoin silver, bitcoin
unlimited and super bitcoin among the proposed new splits. That follows
the launch of the relatively successful, if even more volatile, bitcoin cash. There is some good news for bearish investors, though: two Swiss structured-product houses are now offering vehicles to profit from price drops in the digital currency.
Markets mixed
Overnight, the MSCI Asia Pacific Index climbed 0.4 percent, while Japan’s Topix index closed 0.1 percent higher. India’s Sensex stock index
rose after Moody’s Investors Services upgraded the Indian economy to
Baa2. In Europe, the Stoxx 600 Index was 0.2 percent lower at 5:50 a.m., with the gauge set for a second weekly decline. S&P futures slipped 0.2 percent, the 10-year Treasury yield was at 2.367 percent and gold was slightly higher.
Commodity exit
Norway’s sovereign wealth fund shook up the oil equity market yesterday when it proposed
selling off the $35 billion in oil and gas stocks in its holdings.
While it’s ironic that a fund built almost entirely on oil revenues may
turn its back on oil companies, it probably makes sense
from a risk-management perspective. In the crude market, Saudi Arabia’s
Energy Minister said OPEC and its allies should announce an extension
of their output curbs when they gather at the end of this month. A barrel of West Texas Intermediate for December delivery was trading at $55.90 at 5:50 a.m.