Investing.com - Here are the top five things you need to know in financial markets on Wednesday, December 20:
1. Trump set for first major legislative victory with tax reform
Final passage of the Republican tax bill is expected on Wednesday in what would be U.S. President Donald Trump's first major legislative victory since taking office in January.
The U.S. Senate approved the tax-cut legislation in a 51-48 party line vote with the House expected to also give the green light on Wednesday to tax cuts for corporations and individuals.
As no obstacles are expected in the final vote, Trump has already declared his victory and announced a news conference for 1:00PM ET (18:00GMT) at the White House.
2. Eyes to remain on Washington
Apart from the tax legislation, lurking in the background, yet again, is the threat of a government shutdown as the U.S. Congress struggles through another contentious week as infighting over defense spending, healthcare and other matters complicates the drive to pass a temporary spending bill by Friday’s midnight deadline.
The last time government agencies had to shut down because Washington could not pay its bills was in October 2013.
Leading Republicans in the Senate and House of Representatives expressed optimism that a funding bill, coupled with a large new disaster aid package, would pass by Friday's deadline, but if history is any type of teacher, politicians are likely to bicker up to the eleventh hour.
The House could vote as soon as Wednesday on legislation that extends most funding for domestic programs through January 19.
Conservative Republicans are insisting on higher military funding through the rest of the fiscal year ending on Septtember 30 as part of the House bill, with Democrats opposed unless other non-defense spending matches the request.
Along with tax reform, the debate over the government shutdown will likely get a lot of mainstream press, a key factor as Congressional elections near. With a third of the 100-member Senate and all 435 seats in the House up for grabs, these elections could turn the tide if Democrats obtain victories which could complicate Trump’s agenda.
3. Global stocks mostly lower as tax reform euphoria fizzles
Global stocks were mostly lower on Wednesday as bullish sentiment over the tax overhaul fizzled in what could be considered the typical case of “buy the rumor, sell the news”. With markets heading into Christmas and New Year’s, traders were likely focused on closing shop for the holidays and trade was expected to be thin.
Wall Street ended lower a day earlier despite the confirmation that the Senate passed the package and, despite needing the rubber stamp from the House on Wednesday, tax legislation was seen as all but a “done deal”. Still, U.S. futures pointed to a slightly higher open on Wednesday which may suggest a recovery of those levels. At 5:58AM ET (10:58GMT), the blue-chip Dow futures rose by 90 points, or 0.36%, S&P 500 futures gained 9 points, or 0.33%, while the Nasdaq 100 futures traded up 24 points, or 0.38%.
Elsewhere, European bourses dipped on Wednesday as they seemed to follow the slight profit-taking seen a day earlier on Wall Street. The pan-European STOXX 600 has risen more than 8% so far this year while the benchmark Euro Stoxx 50 has gained around 11%.
Earlier on Wednesday, Asian shares closed with mixed signs. China’s Shanghai Composite ended Wednesday with losses of 0.27%, while Japan’s Nikkei 225 closed up 0.10%.
4. Bitcoin cash soars 50% as “parent” continues to slump
Bitcoin Cash soared nearly 50% on Wednesday as bitcoin exchange Coinbase announced after Tuesday’s stock market close that it would allow its customers to buy, sell, send and receive the alternative currency.
Bitcoin Cash was the result of the fork of the original Bitcoin on August 1 in an effort to make transactions move faster.
Bitcoin, meanwhile was on track for a fourth day of losses, as bullish trend leading up to launch of CME’s Bitcoin Futures last Sunday appeared to wear off. The number one digital currency by market cap hit an all-time high prior to the launch
On the Bitfinex exchange, Bitcoin was at $17,234.00, down $1680.00 or 8.88%, by 6:00AM ET (11:00GMT) Wednesday.
5. WTI oil moves higher on expectation for U.S. inventory decline
Oil prices showed mixed signs on Wednesday as market participants made bets on a bullish U.S. crude stockpile data, but the London barrel struggled to pocket gains.
After the market close on Tuesday, the American Petroleum Institute said U.S. crude oil stockpiles fell by 5.2 million barrels.
The Energy Information Administration will release official government data at 10:30AM ET (16:30GMT) on Wednesday amid expectations for a decline of about 3.8 million barrels.
U.S. crude oil futures rose 0.31% to $57.74 at 6:02AM ET (11:02GMT), while Brent oil slipped 0.03% to $63.74.