Dow futures are down 75 points in pre-opening trading. U.S. stocks are following a general modest selloff that began in Japan and rolled over to Europe. There is no news associated with the selloff.
After a very bad day on Friday, bond prices are higher as U.S. bond traders are also following the crowd in a global bond rally.
Updates from Washington
This week’s trading is likely to be dominated by tax bill talk. The House failed to bring its version of the bill to a vote, and there has been no new deadline given. The real problem seems to be in the Senate. The Senate’s roundly criticized version of the tax bill is nowhere near ready for a vote in the Senate, according to the talk in the weekend political shows.
Trump returns this week from his Asian trip. Trump has been oddly silent about the tax bill while on this trip. I expect that will change when he returns to D.C. But there isn’t much he can really do about it but tweet. I think the odds of a tax bill by year-end are shrinking by the day.
But remember, as long as the bill is alive, the markets will continue to be patient. Stocks will fall on bad news on the bill and bond prices will rise, but neither market will be going very far until that day sometime in the future when the deal is sealed. The picture would change dramatically is Congress fails to produce a bill at all. That seems unlikely given the 2018 election, but Congress did fail on health care. Another failure is not impossible.
Economic reports calendar
Wednesday will be the big day for economic news with Retail Sales and CPI both released. Industrial Production and Housing Starts will be released later in the week.
Opening market reads
- The 2-year is 1.66%
- The 5-year is 2.05%
- The 10-year is up 4/32s to yield 2.385%
- The 30-year bond is higher by 16/32s at 2.855%