What to Watch: Stocks surging, oil rebounds, German sentiment slumps

Here are the top business, market and economic stories you should be monitoring today in the UK, Europe and abroad:

Stocks surging

The main European stock markets were all pushing up by more than 1% in morning trading as investors reacted to progress on a Brexit deal and expectations that Italy’s government could rein in its controversial spending plans.

Britain’s FTSE 100 (^FTSE), Germany’s DAX (^GDAXI) and France’s CAC 40 (^FCHI) were all rising by more than 1% and the benchmark Italian index (FTSEMIB.MI) was up by about 3%. The pound (GBPUSD=X) and euro (EURUSD=X) were also rising against the US dollar.

Italy’s governing coalition is reportedly planning to reduce next year’s budget deficit target, which could help the country avoid breaking European Union budget rules. The government had been on track for disciplinary action from the EU.

Additionally, EU leaders approved a Brexit deal on Sunday, which covers the divorce terms with the UK and a plan for the future relationship between the two sides. Now UK prime minister Theresa May must convince the majority of members of parliament to back her deal in a vote.

“Can … May sell the Brexit deal at home? As expected, the early signs are not encouraging,” noted Kallum Pickering, a senior economist at Berenberg bank. “But it is still early days. Parliament will spend the next two to three weeks debating the deal before voting on it before Christmas. Only during these debates can we genuinely begin to gauge whether May can get the numbers or not.”

Looking abroad, Asian stock markets were mixed. The Hang Seng index (^HSI) in Hong Kong charged up by 1.7% while the Australian ASX All Ordinaries (^AORD) slumped by 0.8%.

US stock futures were looking perky, with the S&P 500 (ES=F), Dow Jones industrial average (YM=F) and Nasdaq (NQ=F) all set to pop by 1% or more at the open.

Oil prices rebound after ‘Black Friday’

Oil prices were rebounding on Monday, with Brent (BZ=F) and WTI crude futures (CL=F) rising by about 1% to 2% in morning trading. This comes after a two-month slump in prices and a sharp drop on Friday, with prices falling by as much as 8%. Traders have already referred to the day as ‘Black Friday’ for oil.

“2019 will be a choppy year for the oil market as questions surrounding the prospect of a slowing global economy and a supply surplus are expected to increase,” analysts at Fitch Solutions said on Monday.

German business sentiment weakens

German business morale fell by more than expected in November as a trade dispute between China and the US weighed on Germany’s export sector and hurt the economy.

The Munich-based Ifo economic institute said on Monday that its business climate index fell for the third month in a row.

“Sentiment among German businesses weakened further this month,” said Ifo chief Clemens Fuest. “Companies scaled back their assessments of the current business situation albeit from a high level. Their business expectations also clouded over.”

What to expect in the US

Americans head back to work on Monday to do some Cyber Monday shopping.

Traders and investors may decide to trade what they’ve gleaned from the Black Friday shopping data. According to ShopperTrak, in-store traffic was down 1.7% on Thanksgiving and Black Friday as compared to last year. However, according to Adobe Digital Insights, online purchases on Friday were up nearly 24% ($6.22 billion) compared to last year.

This week, the spotlight shifts toward policymakers. On Tuesday, Fed vice chairman Rich Clarida speaks in New York at The Clearing House 2018 annual conference. On Wednesday, Fed chair Jerome Powell speaks at the Economic Club of New York.

The notable earnings this week include tech giant Salesforce.com (CRM) and retail companies Tiffany & Co (TIF) and PVH (PVH).

Rounding out the week, the closely-watched G-20 summit will take place in Argentina from Thursday to Saturday.

With files from Reuters and Yahoo Finance’s Heidi Chung