Fed Pivot, Media War & Asia’s Economic Split

Global markets are entering a pivotal week defined by high-stakes monetary policy and massive corporate consolidation. US stock futures edged higher on Monday, extending gains from the previous fortnight as investors position themselves for the Federal

Reserve’s final policy meeting of the year. While the macro narrative is dominated by expectations of easing interest rates, the corporate landscape is being reshaped by Netflix’s audacious bid for Warner Bros Discovery’s assets, a move that has already drawn political and regulatory fire.

Wall Street appears confident that the central bank will ease monetary policy on Wednesday. Following the delayed release of September’s core personal consumption expenditures price index, which came in softer than anticipated, sentiment has shifted firmly towards a rate cut. According to CME’s FedWatch tool, futures markets are currently pricing in an approximate 88% probability of a reduction in the federal funds rate.

This optimism is reflected in the pre-market action, with S&P 500, Nasdaq 100, and Dow futures all trading in positive territory. This follows a strong performance last week where major indices secured their second consecutive week of gains. While Monday’s economic calendar is relatively light, volatility may increase later in the week as marquee earnings reports are released, with results due from Broadcom, Adobe Systems, Costco, Oracle, and Lululemon.

In the corporate sphere, the spotlight is on Netflix’s proposed $72 billion acquisition of Warner Bros Discovery’s film studios, TV assets, and streaming division. However, the path to closing this deal is fraught with regulatory peril in both the US and Europe. Industry unions and theatre owners have already voiced concerns regarding potential job losses and the monopolisation of the film industry.

Political scrutiny is also intensifying. On Sunday, US President Donald Trump signaled his intent to scrutinise the merger closely, citing potential antitrust issues. "I’ll be involved in that decision," Trump stated, adding, "That’s going to be for some economists to tell…. But it is a big market share. There’s no question it could be a problem."

Market analysts agree that concessions will be necessary. Anthony Saglimbene, chief market strategist at Ameriprise Financial, noted, "Both companies probably expect that they may need to sell assets to close the deal. And I think there’s more than enough room for them to do that."

Economic data from Asia highlighted a sharp divergence between the region’s two largest economies. Japan’s economy contracted at an annualised rate of 2.3% in the third quarter—worse than the initial 1.8% estimate—marking the fastest rate of decline since 2023. This contraction complicates the Bank of Japan’s position ahead of its meeting next week. Despite the slump, the BOJ is widely expected to raise rates, as inflation has remained above the 2% target for over three years.

Conversely, China reported a wider-than-expected trade surplus of $111.68 billion for November. Exports rebounded significantly, growing 5.9% year-on-year. Crucially, this growth occurred despite a 29% plunge in shipments to the US, driven by prohibitively high tariffs. Chinese manufacturers have successfully pivoted to alternative markets, with exports to the European Union rising 14.8%, shipments to Australia surging 35.8%, and trade with Southeast Asian economies increasing by 8.2%.

Oil prices also touched two-week highs on Monday, with Brent crude reaching $63.85 per barrel. Traders are betting that a Fed rate cut will stimulate economic growth and energy demand. Simultaneously, geopolitical supply risks remain in focus as the G7 and EU discuss replacing the price cap on Russian oil with a full maritime services ban.