CN put rate cuts back in play after pledging to adopt more supportive monetary and fiscal policy to bolster the economy. Officials said they will use interest rate and RRR cuts, and also plan to step up efforts to stabilise the housing market. Mexico approved tariffs of up to 50% on CN and other Asian imports, broadly aligning itself with US efforts targeting CN. Trump said any deal for Warner Bros. Discovery must include the sale of CNN, adding another political wrinkle to Netflix's bid and deepening the partisan divide around the transaction.
Fed voted to cut rates by 25bps, as widely expected, with two dissenters favouring a hold and one pushing for a 50bp cut. The statement and press conference made clear that a material deterioration in labour market conditions is now a precondition for further easing, which puts next week's NFP squarely in focus. We saw a clear broadening in equities yesterday after the Fed, RSP193 outperformed while retail related themes lagged the tape. Tech underperformed, and that trend should extend following ORCL194 . ORCL's earnings did little to calm the market, with the stock dropping over 10% after close yesterday. Key concerns include disappointing revenue growth, including cloud, negative free cash flow, and a 15bn increase in capex guidance for this fiscal year. Questions around AI and capex financing will remain top of mind, and ORCL's print should see the recent Tech Divergence theme extend further. Asian markets are under pressure overnight, and NQ1!25673 are down over 1% in Asian hours. Bxc initially bounced, but that move has now fully unwound.
Remaining key catalysts ahead include AVGO407.4723 earnings tomorrow, Dec 16 NFP, Dec 18 CPI, Dec 18 MU260.61, NKE65.83 and FDX284.03 earnings, Dec 23 3Q GDP, and the timing of an IEEPA decision.