-Prepare for liftoff: Friday’s better than expected U.S. jobs report seems to have cemented the Federal Reserve’s case for liftoff later this month. Economists at Barclays reckon that a rate hike is now fully priced in, while Allianz SE Chief Economic Adviser and Bloomberg View columnist Mohamed El-Erian says it would be difficult for the Fed to avoid raising rates at the conclusion of its meeting on Dec. 16. Federal funds futures imply a 76 percent probability of liftoff in December, and the U.S. two-year Treasury has risen by more than 30 basis points over the past two months. The U.S. dollar, meanwhile, is gaining on most major currencies this morning on the heels of its largest one-week loss since May. In the wake of November’s solid non-farm payrolls report, the conversation has now shifted towards how fast the Fed will have to raise rates and to what terminal level.
-GE pulls plug on appliance sale to Electrolux: It’s the mirror image of Merger Monday for Electrolux AG, as General Electric Co. said it was giving up on its plan to sell its household appliance business to the Stockholm-based company for $3.3 billion. GE will search for another buyer for this business unit and is seeking a $175 million break-up fee from Electrolux. The U.S. Department of Justice had previously rejected Electrolux’s proposal to divest assets to assuage its anti-trust concerns. Shares of the Swedish manufacturer took their biggest hit in nearly four and a half years.
-Winds of political change blowing: Economic and geopolitical turmoil are sparking political change in South America and Europe. Sunday’s Venezuelan elections saw the opposition alliance led by Jesus Torrealba win a majority. A deep recession, high inflation, heavy indebtedness, and a crippled currency proved a toxic combination for President Nicolas Maduro’s populist party. Venezuelan bonds gained as traders digested the results, with the hope that reforms will pave the way for economic stability. Meanwhile, in France, the right-wing National Front party led by Marine Le Pen performed well in the regional elections held on Sunday.
-Chinese executives keep disappearing: Two members of Citic Securities Co.’s executive committee are incommunicado, according to a statement released by the company on Sunday. Some media reports allege that Chen Jun and Yan Jianlin, the investment-banking officials in question, were sought by the Chinese government in connection with a probe into the plunge in domestic stocks this year after their parabolic advance. The brokerage isn’t alone in having high-profile members go missing. In November, Guotai Junan International Holdings Ltd. said that it was unable to contact Yim Fung, chairman and chief executive officer at the brokerage.
-Stocks keep rising: U.S. stock futures continue to push higher following a stunning surge on Friday. The Dow Jones industrial average, S&P 500 and Nasdaq all jumped by just over 2% following a solid U.S. jobs report. And it looks like the positive momentum will continue this morning. Across the pond, European markets are all rising in early trading, with some key indexes notching gains above 1%. Asian markets ended with mixed results.
-Oil below $40: Crude oil futures are falling by more than 1% to trade around $39.50 per barrel as traders expect no near-term fix to the oil glut in the market. The Organization of the Petroleum Exporting Countries (OPEC) reviewed their collective production levels on Friday, but couldn’t agree new targets. Some members of OPEC, and other high cost producers, have been suffering from the slump in prices since mid 2014 caused by oversupply in the market. The lack of agreement effectively leaves output steady at 30 million barrels a day, though actual daily production is estimated at 31.5 million barrels. Saudi Arabia — OPEC’s most powerful member — has been insisting for months that the cartel keep pumping large amounts of oil in what appears to be an effort to squeeze U.S. producers out of the market. Saudi Arabia can afford to sell cheaper oil because it’s inexpensive to produce, while other nations like the U.S., Canada and Brazil have very high production costs.
-Stock market movers — Chipotle and Electrolux: Shares in Chipotle (CMG) are getting dumped premarket after the restaurant chain reported that its E. coli outbreak will damage sales in the fourth quarter. Shares are down about 8% after the company noted in an SEC filing that sales have closely tracked developments in the E. coli outbreak — falling when stores closed, but rebounding when they reopen. Chipotle shares had been on a fantastic, breathless rally for years but have recently crashed back down to earth, falling about 25% in just two months. Over in Europe, shares in Electrolux (ELUXY) are crashing by 12% after General Electric (GE) killed a deal to sell its appliance business to the Swedish company. The $3.3 billion deal had been challenged for months by the U.S. Department of Justice.
– Earnings: It’s a light day for quarterly earnings. Mattress Firm (MFRM) and Vail Resorts (MTN) are reporting ahead of the open while Casey’s General Stores (CASY) and United Natural Foods (UNFI) are reporting after the close.