Stimulus Saga, Copper Roars, CyberPunk Fiasco - What's up in Markets

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Stimulus Saga, Copper Roars, CyberPunk Fiasco - What's up in Markets

By Geoffrey Smith -- The stimulus saga will drag on into the weekend (as will the Brexit talks), copper hits its highest in nearly eight years, Europe gets another couple of positive data surprises, Nike (NYSE: NKE ) reports earnings, and shares in the developer of videogame CyberPunk 2077 fall another 20% as Sony (NYSE: SNE ) pulls it from the PlayStation store. Here's what you need to know in financial markets on Friday, December 18th.

1. Stimulus talks

The never-ending saga of the U.S. stimulus package is set to extend into the weekend, after disagrements over end-dates for some Federal Reserve lending programs held up negotiations on Capitol Hill on Thursday.

Congress will have to pass a stopgap bill on extending the government’s funding today in order to  keep the talks going to their expected completion sometime over the next three days.

““We’re going to stay right here until we’re finished, even if that means working through the weekend, which is highly likely,” Senate Leader Mitch McConnell was quoted as saying after Thursday’s negotiations.

The package reportedly includes direct checks of $600 million as well as an extension to the enhancement of unemployment benefits, an issue that has gained importance after two straight weeks of sharp increases in initial jobless claims .

2. Copper hits highest level in nearly 8 years

Crude oil prices have cooled a little overnight, but the rally in the rest of the industrial commodity complex continues unabated.

Copper Futures topped $8,000 a ton in London overnight for the first time since January 2013, in what has become in large part a bet on heavy investment in renewable energy technologies, from electric vehicles to offshore wind farms.

The spread of EVs has developed a particular importance for the metal, given that each car produced requires four times as much copper as a car with an internal combustion engine. Commodities trader Trafigura estimates world copper demand will grow by some 44% over the next decade.

3. Stocks set to open flat ahead of 'quadruple witching'; Nike's earnings due 

U.S. stocks are set to open mixed, ahead of the ‘quadruple witching’ today as December options contracts on stocks, indices and other products all expire.

By 6:30 AM ET, Dow Jones Futures , S&P 500 futures and NASDAQ Futures were all essentially flat, with none moving more than 0.1%.

Stocks likely to be in focus later include FedEx (NYSE: FDX ), which is indicated down 3% despite reporting a bumper quarter that underlined the scale of the online shopping boom after the bell on Thursday.

Companies reporting earnings in the course of the day include Nike, Darden Restaurants (NYSE: DRI ) and cruise operator Carnival (NYSE: CUK ).

4. European data better than expected, again

Data released overnight in Europe again suggested that the economic impact of the latest lockdown may not be as bad as feared.  

The closely-watched German Ifo business climate index rose unexpectedly to 92.1 from an upwardly revised 90.9 in November, defying expectations for another drop. That corroborated an earlier positive surprise this week from IHS Markit’s purchasing manager indices. German producer prices for November also came in higher than expected, suggesting that companies in Europe's largest economy had retained some pricing power despite the slowdown.

In the U.K. meanwhile, retail sales fell by less than expected, and consumer confidence improved by more than expected, albeit remaining at a very low level. 

Not willing to be outdone by Congress, the Brexit negotiators are also expected to work through the weekend to hammer out remaining differences, chiefly over fishing rights, if reports are to be believed.

5. CyberPunk fiasco deepens as Sony pulls the plug

Some problems just can’t be glossed over, however. Shares in video game publisher CD Projekt (WA: CDR ) fell another 20% after Sony withdrew its CyberPunk 2077 game from the PlayStation store amid a torrent of complaints about the game’s bugs.

CyberPunk had been one of the most hotly-anticipated games of the year, and the spectacularly botched launch, which has forced the company to offer refunds to irate buyers, has driven its stock price down 45% this week, pushing it back to levels last seen in the March panic.

CD Projekt said there were no talks yet with Microsoft (NASDAQ: MSFT ) on whether to pull the game from its X-Box store.

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