Morning Brief: Six market themes to track in 2018

Tuesday, January 2, 2018

What to watch today

2018 has arrived. With U.S. stocks coming off their best year since 2013, investors come into the second year of the Trump administration and the second-to-last year of the decade with Wall Street expecting higher stock prices amid corporate tax rates that have been slashed.

Tuesday should be quiet in markets as traders and investors return to work. The year will begin with a little look back at 2017. At 9:45 a.m. ET, we’ll get the December U.S. manufacturing PMI report. Economists are expecting a print of 53.9. Any reading above 50 signals growth.

Later this week, the December jobs report, auto sales, and ISM manufacturing readings will be released. Economists forecast that 188,000 jobs were created in December while the unemployment rate should hold steady at 4.1%. On the earnings side, results from Monsanto (MON), Stanley, Black & Decker (SWK), and Constellation Brands (STZ) will be highlights.

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Top news

Bridgewater’s Steinberg killed in plane crash: Bridgewater Associates executive Bruce Steinberg and his family were among 10 Americans killed when a charter plane crashed into a mountain in Costa Rica on Sunday. [Bloomberg]

New York Fed takes names in search for next chief:  It may be the trickiest job to fill in central banking. And as the Federal Reserve Bank of New York search committee casts a wide net to find a replacement for its outgoing president, William Dudley, the wish list is getting long. [Bloomberg]

BP expects US earnings uplift from tax reform: British energy company BP (BP) expects a positive impact on future post-tax earnings from changes to U.S. corporate taxes, it said on Tuesday. The company said the lowering of the U.S. tax rate requires revaluation of BP’s U.S. deferred tax assets and liabilities and estimated a one-off non-cash charge of about $1.5 billion on 2017 fourth-quarter results. [Reuters]

Pension funds’ dilemma: What to buy when nothing is cheap?:  Retirement systems that manage money for firefighters, police officers, teachers and other public workers aren’t pulling back on costly bets at a time when markets are rising around the world. Some public pension funds are adding to traditional allocations of stocks and bonds while both are expensive. Others are loading up on more private-equity or real-estate holdings that are less liquid and sometimes carry high fees. [The Wall Street Journal]

For more of the latest news, go to Yahoo Finance

Iranian students protest at the University of Tehran during a demonstration driven by anger over economic problems, in the capital Tehran on December 30, 2017. Students protested in a third day of demonstrations, videos on social media showed, but were outnumbered by counter-demonstrators.(Photo credit STR/AFP/Getty Images)

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The Morning Brief provides a quick rundown on what to watch in the markets, top news stories, and the best of Yahoo Finance Originals.