Dow futures experienced a modest increase on Monday in anticipation of this week’s Federal Reserve policy-setting meeting, as investors navigate the intricacies related to the proposed acquisition of Warner Bros Discovery’s television and film assets by Netflix. The Japanese economy experienced a notable contraction in the third quarter, whereas Chinese exports showed an overall rebound despite a significant decline in exports to the United States.

Dow futures experienced a modest increase on Monday, sustaining the gains achieved in the previous week as investors anticipate the Federal Reserve’s concluding policy meeting of the year. At 02:40, the S&P 500 futures indicated an increase of 13 points, or 0.2%. Nasdaq 100 futures showed a rise of 87 points, or 0.3%, while Dow futures experienced an uptick of 24 points, or 0.1%. All three major U.S. stock indexes experienced positive performance last week, marking their second consecutive week of gains. The S&P 500 and NASDAQ Composite achieved four-day winning streaks by Friday, while the Dow Jones Industrial Average has shown positive results in three of the last four sessions. The prevailing optimism among investors is largely attributed to expectations that the Federal Reserve will adopt a more accommodative stance on monetary policy this Wednesday. This sentiment has been reinforced by the recent release of September’s core personal consumption expenditures price index, which, arriving later than anticipated, showed results that were softer than market forecasts. Reports indicate that Fed funds futures are reflecting approximately an 88% probability of a Federal Reserve rate cut. The economic data calendar is relatively sparse on Monday, with significant earnings reports anticipated later in the week from companies such as Broadcom, Adobe Systems, Oracle, Costco, and Lululemon.

Netflix has revealed intentions to acquire Warner Bros Discovery’s television, film studios, and streaming division for $72 billion. However, the primary challenge lies ahead, as this transaction is expected to encounter significant antitrust examination in both Europe and the United States. “The most significant aspect of a transaction of this magnitude and intricacy is the prospective regulatory challenges that these two firms will need to navigate,” stated Anthony Saglimbene. Both companies likely anticipate the necessity of divesting assets to facilitate the completion of the transaction. There appears to be ample opportunity for them to pursue that course of action. Hollywood unions and theater owners have raised concerns regarding the proposed takeover, cautioning that the deal could lead to job losses, increased concentration of power, and a decline in theatrical movie releases should it successfully navigate regulatory scrutiny. On Sunday, U.S. President Donald Trump engaged in the discourse, asserting that he would influence the decision regarding the advancement of the proposed merger. “I will participate in that decision,” Trump remarked, highlighting a possible consolidation of market power within the entertainment sector. That will be for certain economists to determine…. However, it represents a substantial portion of the market. The president acknowledged, “There’s no question it could be a problem.”

Japan’s economy experienced a sharper contraction than previously assessed in the third quarter, introducing additional intricacies to the Bank of Japan’s forthcoming policy deliberations. Gross domestic product contracted at an annualised rate of 2.3% instead of the previously estimated 1.8% in the three months ending in September, as per data released earlier on Monday, marking the steepest decline since the third quarter of 2023. On a quarter-on-quarter basis, GDP contracted 0.6%, in contrast to analysts’ estimate of 0.5% and an initial reading of 0.4%. The economic fragility elucidates Prime Minister Sanae Takaichi’s stimulus package unveiled last month, which included the most substantial new expenditure since the pandemic. The government projects that the package will enhance the nation’s GDP by approximately 1.4 percentage points annually over a three-year period on an annualized basis. While the Bank of Japan will undoubtedly analyze this economic release, it is broadly anticipated that it will increase its policy rate during the meeting scheduled for December 18-19. This expectation is underpinned by the fact that Japan’s primary inflation measure has consistently met or exceeded the 2% target for over three and a half years, representing the longest duration since the early 1990s.

In November, China’s exports experienced a significant rebound, exceeding forecasts, while imports saw modest growth, resulting in a trade balance that yielded a surplus larger than anticipated. China’s exports experienced a year-on-year increase of 5.9%, as indicated by customs data released on Monday, marking a recovery from a 1.1% decline observed the previous month. Meanwhile, imports saw a rise of 1.9%, in contrast to a 1.0% increase in October. This led to China’s trade balance posting a surplus of $111.68 billion in November, surpassing expectations of $100.20 billion, and an increase from the $90.07 billion surplus observed in the previous month. The increase in exports can be attributed to a notable rise in shipments to markets outside the United States, as manufacturers strengthen their trade relationships globally in response to the high tariffs imposed by President Donald Trump. In November, Chinese shipments to the U.S. experienced a significant decline of 29% compared to the same month last year, according to the data. Conversely, exports to the European Union saw an annual increase of 14.8% last month, while shipments to Australia surged by 35.8%. Additionally, the rapidly expanding economies of Southeast Asia imported 8.2% more goods during the same timeframe.

Oil prices experienced a slight increase on Monday, approaching two-week highs as market participants anticipate a potential interest rate cut by the Federal Reserve this week, which is expected to bolster economic growth and enhance energy demand. Brent futures increased by 0.2% to $63.85 per barrel, while U.S. West Texas Intermediate crude futures also saw a rise of 0.2%, reaching $60.20 per barrel. Both contracts concluded Friday’s trading session at their peak levels since November 18. In addition to the Federal Reserve meeting, advancements towards peace in Ukraine continue to be sluggish. According to sources, discussions are underway among the Group of Seven nations and the European Union to substitute the existing price cap on Russian oil exports with a comprehensive ban on maritime services, a move that would likely further restrict supply from the world’s second-largest oil producer.