Top 5 Things to Know in the Market on Thursday

1. China talks tough on HK, underlining trade impasse

China ramped up its criticism of the bill passed by the Senate earlier this week tying China’s trade preferences in the U.S. to its respect for Hong Kong’s political autonomy. Reports suggest the bill will be sent to President Donald Trump today for signing.

"If the U.S. side obstinately clings to its course, the Chinese side will inevitably adopt forceful measures to take resolute revenge, and all consequences will be borne by the United States," the Communist Party’s People’s Daily said in a front-page editorial.

Trump indicated on Wednesday that the administration is considering exempting Apple (NASDAQ:AAPL) from the increase in import tariffs on Chinese goods that is scheduled to come into force on Dec. 15. That would make it easier for the hike in import duties to go ahead, given that it would pre-empt a sharp rise in iPhone prices that would be highly visible evidence of the negative impact of tariffs on U.S. consumers.

Trump also said China wasn’t “stepping up” as he hoped as regards ongoing trade talks. China’s Commerce Ministry said it would keep all communications channels with the U.S. open, but Reuters sources said there is a growing risk that no deal will be signed this year.

2. More retailers to report as stocks edge lower

U.S. stock markets are on course to open the day slightly lower, after overnight news from China underlined the obstacles to reaching a ‘phase-1’ deal to de-escalate trade tension in the short term.

By 5:45 AM ET (1045 GMT), the futures on all three main U.S. indices were down less than 0.1%, with Dow futures a modest 11 points in the red.

A day after weak results from Kohl's (NYSE:KSS) sent a shudder through the sector, it’s show time for another handful of battered retailers.

Macy’s Inc (NYSE:M) and BJs Wholesale Club Holdings Inc (NYSE:BJ) get the ball rolling ahead of the open, while Nordstrom Inc (NYSE:JWN), Gap Inc (NYSE:GPS) and Ross Stores Inc (NASDAQ:ROST) round off what should be an eventful day after the closing bell. Jack In The Box Inc (NASDAQ:JACK), Splunk Inc (NASDAQ:SPLK) and Williams-Sonoma Inc (NYSE:WSM) are also all scheduled to report.

3. Impeachment Hearings

Impeachment hearings are set to continue in front of the House Intelligence Committee at 9 AM ET, with testimony from former White House Russia expert Fiona Hill and David Holmes, an official with the U.S. embassy in Kyiv.

Their testimony, in the last hearing scheduled for this week. will build on some explosive disclosures Wednesday by Gordon Sondland, a former Trump donor who is now Ambassador to the EU. Sondland said he had pressed Ukraine to announce investigations into the son of Joe Biden at the “express direction” of Trump, adding that “everyone was in the loop”, including Secretary of State Mike Pompeo.

Later in the day, Laura Cooper, the deputy assistant secretary of defense for Russia, Ukraine and Eurasia, had also testified that Ukraine was aware that the administration was holding back military aid approved by Congress as early as July 25, undermining Republican claims that the country’s government couldn’t have felt itself under pressure to offer a ‘quid pro quo’ because it wasn’t aware of what Trump wanted.

4. Fiat Chrysler under pressure from GM lawsuit

Fiat Chrysler (NYSE:FCAU) shares extended losses in Europe overnight after General Motors (NYSE:GM) sued the company for alleged racketeering by bribing union officials to ensure it didn’t lose a long-standing advantage in labor costs over the other big two Detroit motor companies.

Fiat Chrysler shares fell 1.6% in Milan, after losing 3.7% on Wednesday in New York as the news broke.

Shares in France’s PSA Group, the owner of the Peugeot, Citroen and Opel brands, edged fractionally higher, with any concern at the possible disruption of its merger talks with FCA offset by the feeling that PSA shareholders were upset about paying too much for the deal in the first place.

5. Jobless Claims to draw more attention

There may be more eyes on the weekly jobless claims numbers than usual at 8:30 AM ET, after initial claims hit their highest level since June in last week’s report. Economists expect initial claims to fall to 219,000 from 225,000 – a figure that’s still extremely low by historical standards.

Elsewhere, the Philadelphia Fed releases its monthly manufacturing survey at the same time, while existing home sales data are due at 10 AM ET.

Elsewhere across the world, the European Central Bank will release the accounts of Mario Draghi’s last meeting as president, a day ahead of his successor Christine Lagarde’s first keynote speech.

Earlier, the central bank of Indonesia left its key interest rate unchanged after three successive cuts, but it still loosened conditions further by cutting banks’ reserve ratio requirements. South Africa’s central bank is due to make its call on local rates at 7:30 AM ET.

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