While elements of the Brexit deal could still be "clarified," European Commission President Jean-Claude Juncker is ruling out any renegotiation of the divorce agreement after Theresa May delayed a critical parliamentary vote on her proposal to leave the EU. She now plans to meet with European leaders before an EU summit in Brussels on Thursday. If a deal cannot pass through parliament, the range of outcomes runs from a leadership challenge, a May resignation, a general election in the U.K., a second referendum on EU membership or a temporary stop on Britain's withdrawal.

Economy

Grappling with violent demonstrations over living costs, the French government is preparing for a "Black Tuesday" of protests by high-school students who have jumped onto the Yellow Vest bandwagon. Emmanuel Macron addressed the nation last night for the first time since the Gilet Jaunes demonstrations began, promising to raise the minimum wage and speed up tax relief. The concessions will likely cost the country between €8B-€10B.

Rome has in recent weeks shown willingness to reduce its deficit target, but it remains unclear if a compromise can be found. According to La Repubblica, the European Commission is willing to accept an increase in Italy's deficit target to 1.95% for next year, while Italy's Finance Minister Giovanni Tria is pushing the government to reduce its deficit target to 2.0% (from 2.4%).

The road map for the next stage of trade talks between the U.S. and China was discussed this morning, Beijing time, during a telephone call between Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer. "Both sides exchanged views on putting into effect the consensus reached by the two countries' leaders at their meeting, and pushing forward the timetable and roadmap for the next stage of economic and trade consultations work," China's commerce ministry said.

U.S. stock index futures are up more than 0.6% on a fresh dose of optimism over the U.S.-China trade dispute. The move higher followed another volatile session on Wall Street, which saw the Dow recover from a 507-point drop on Monday. Most Fed watchers are still expecting a December rate hike, but the fact that there is doubt - due to recent market moves and a weaker November employment report - appears to be lifting sentiment.

Disregarding time-related shifts, the U.S. budget deficit in the first two months of fiscal 2019, which began Oct. 1, was $13B, or 6% higher, than the previous year, according to the Congressional Budget Office. The federal debt and deficit have grown dramatically since President Trump took office, a product of tax cuts, bipartisan spending and ongoing growth in mandatory programs like Social Security and Medicare.

It was a choppy session for Indian assets overnight, with stocks and the rupee initially roiled by a surprise resignation of the central bank governor - before posting a recovery - with the RBI yet to decide on naming an interim or full-term chief. The country's ruling Bharatiya Janata Party was also trailing in vote count in three big heartland states in a setback for Prime Minister Narendra Modi, and months ahead of a general election.

Stocks

Google CEO Sundar Pichai is in the hot seat today, testifying before the U.S. House Judiciary Committee on Alphabet's (GOOG, GOOGL) social media practices. The hearing officially focuses on "Google and its Data Collection, Use and Filtering Practices," but it's also likely to cover accusations of political bias, a controversial plan to return to China, and whether the tech giant violates antitrust laws.

A Canadian provincial court weighing whether to grant bail to Huawei CFO Meng Wanzhou, who faces possible extradition to the U.S. on allegations of evading Iran sanctions, adjourned on Monday without deciding her fate. Proceedings have now been rolled over to today because the judge wants to hear more about the issue of surety, meaning who will take responsibility for Meng's actions if she is released.

Apple has filed an appeal to overturn a sales ban on some of its older iPhone models in China. The ruling by the Fuzhou Intermediate People's Court follows a request for an injunction by Qualcomm (NASDAQ:QCOM), which has been locked in a legal battle with Apple (NASDAQ:AAPL) for years. Two patents were said to be infringed: one related to photo editing and another to swiping on a touch screen device.

Google is accelerating the shutdown of its Google Plus product after finding a software flaw for the second time this year that allowed partner apps to access its users' private data. The social media service will be taken offline in April, four months ahead of schedule. While no evidence was found that any other apps had accessed the data - such as name, email, gender and age - the bug affected 52.5M Google+ accounts (GOOG, GOOGL).

In an update on its first employee buyout offer in 13 years, Verizon (NYSE:VZ) said about 10,400 have been accepted as part of the voluntary separation offer. It comes as the largest U.S. wireless carrier by subscribers works to cut $10B in costs and upgrade to a faster 5G network. At the end of the third quarter, Verizon had 152,300 employees on its payroll.

WPP +5% premarket on word that the advertising giant will slash 3,500 jobs worldwide. It follows a torrid year that included the exit of CEO Sir Martin Sorrell, as well as fierce competition from digital disrupters like Google (GOOG, GOOGL) and Facebook (NASDAQ:FB). WPP's restructuring, which will be revealed in full during an investor presentation today, will include shutting 80 offices globally and combining operations of a further 100 locations.

Walmart is doubling down on automation and is in the early stages of testing a kitchen robot assistant named "Flippy" at its headquarters in Bentonville, Arkansas. While Flippy can grill up to 150 burgers an hour, Walmart (NYSE:WMT) is interested in using the robot to fry foods - up to eight baskets at a time - for its in-stores delis. The machine costs between $60K and $100K depending on its features.

As it readies mass production of hybrid and electric vehicles, Daimler (OTCPK:DMLRY), parent company of Mercedes-Benz, said it would buy battery cells worth close to $23B by 2030. It currently sources the cells from various suppliers including LG Chem (OTCPK:LGCLF) and SK Innovation (OTC:SKOVF). Hyundai is also pouring almost $7B into clean energy vehicles, developing hydrogen-powered systems for cars, drones and ships amid criticism that the group was too slow to adapt to battery-powered EVs.

Carlos Ghosn, the former chairman of Nissan (OTCPK:NSANY) and Mitsubishi (OTC:MMTOY), has filed a complaint with the Tokyo District Court to protest its decision to keep him detained until Dec. 20, Kyodo News reports. Ghosn is set to stay in detention as long as he remains a criminal suspect. From indictment, cases typically take months to go to trial, during which most who deny wrongdoing are refused bail.

Today's Markets

In Asia, Japan -0.3%. Hong Kong +0.1%. China +0.4%. India +0.5%.
In Europe, at midday, London +1.2%. Paris +1.6%. Frankfurt +1.5%.
Futures at 6:20, Dow +0.6%. S&P +0.6%. Nasdaq +0.8%. Crude +0.9% to $51.45. Gold +0.3% to $1252.70. Bitcoin -5.1% to $3330.
Ten-year Treasury Yield +2 bps to 2.88%

Today's Economic Calendar

6:00 NFIB Small Business Optimism Index
8:30 Producer Price Index
8:55 Redbook Chain Store Sales
1:00 PM Results of $38B, 3-Year Note Auction