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Wall Street Breakfast: Brexit Deal And Jobs Report
Dec. 8, 2017 7:05 AM ET|
Includes: AAPL, ALL, AMZN, BAC, C, CB, CBOE, CME, FB, GOOG, GOOGL, GS, HCMLY, MSFT, MUSIC, NTDOY, NVDA, QQQ, RBS, SNE, SPY, T, TOSYY, TRV, TSN, TWX, VIVHY, WDC, WFC

Wall Street Breakfast
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

"We have made the breakthrough we needed," said European Commission President Jean-Claude Juncker, declaring a long-awaited Brexit deal and the opportunity to now discuss trade arrangements. A financial settlement was agreed that was "fair to the British taxpayer" and enshrined the "special rights of EU nationals," announced Theresa May, adding a guarantee that there would be "no hard border" in Ireland.

Economy

Providing the latest snapshot of the American economy, the Labor Department will release its latest nonfarm payrolls report at 8:30 a.m. ET. Economists expect that 200,000 jobs were added in November, while the unemployment rate held steady at 4.1%. The strong figures will likely force the Fed next week to hike rates for the third time this year and push central bank officials toward more aggressive monetary policy in 2018.

Working against a midnight deadline, the Senate has passed a stop-gap spending measure to continue funding the federal government for two weeks. The bill will now be sent to President Trump for his signature. In other news from Capitol Hill, the White House said it will move forward with a massive infrastructure program in 2018.

With October's massive wine country wildfires and the current blazes sweeping Southern California, this year will go down as one of the most devastating fire seasons ever for insurance losses. California Insurance Commissioner Dave Jones said YTD losses already top $10B. Among the state's largest insurers: Travelers (NYSE:TRV), Allstate (NYSE:ALL) and Chubb (NYSE:CB).

Chinese trade unexpectedly accelerated last month in an encouraging sign for the world's second-largest economy. November exports rose 12.3% from a year earlier, while imports expanded 17.7%, resulting in a trade surplus of nearly $40.21B. Iron ore and copper imports also enjoyed a stellar rebound, which could help stem a recent pullback in commodity prices.

Stocks

Toshiba and business partner Western Digital (NYSE:WDC) have agreed to settle a dispute next week, according to several sources, over the Japanese conglomerate's plans to sell its $18B chip unit. The deal will see Western Digital drop arbitration claims in exchange for Toshiba (OTCPK:TOSYY) allowing it to invest in a next-gen chip production line that is slated to begin in 2018.

The U.K.'s breakthrough in Brexit negotiations will not alter RBS's plans to establish an alternative trading hub inside the EU, CEO Ross McEwan told Bloomberg News. The financial institution also sees a reduced chance of reaching an agreement with the DOJ over its mortgage bond probe this year, although it's "well-capitalized to handle a settlement."

Another report by Bloomberg suggests Goldman Sachs (NYSE:GS) won't serve as a market-maker, nor will it carry any inventory in the derivatives, but the bank will clear Bitcoin futures contracts for certain clients. The WSJ reported earlier that BofA (NYSE:BAC) and Citigroup (NYSE:C) - for now - won't be clearing the products (futures begin trade on Sunday evening at the CBOE and a week later at the CME).

Acting CFPB Director Mick Mulvaney is reviewing whether Wells Fargo (NYSE:WFC) should pay tens of millions of dollars over alleged mortgage lending abuse, as well as potential sanctions, Reuters reports. Wells said in October it would refund homebuyers who were wrongly charged fees to secure low mortgage rates, a black mark against a lender which has already been roiled by a phony accounts scandal.

Former LafargeHolcim CEO Eric Olsen was indicted and placed under judicial supervision late Thursday over allegations that the cement maker indirectly financed jihadists in Syria. Lafarge (OTCPK:HCMLY) is accused of paying Islamic State and other terrorist groups through a middleman so that the company's factory in Jalabiya could continue to operate as the war raged around it.

Seeking to triple the size of its production capacity, plant-based burger maker Beyond Meat has raised $55M in a funding round led by venture capital firm Cleveland Avenue. Also participating in the round was Tyson Foods (NYSE:TSN), which increased its holdings. The largest U.S. meat company by sales previously took a 5% stake in October 2016.

The federal judge who will oversee the Justice Department's bid to stop AT&T (NYSE:T) from buying Time Warner (NYSE:TWX) has set a March 19 date for the court to hear the case. That decision means the trial will come earlier than the DOJ wanted and later than AT&T asked for, but still before the merger's termination date of April 22.

YouTube plans to introduce a paid music service in March, Bloomberg reports, marking a third attempt by parent company Alphabet (GOOG, GOOGL) to catch up with rivals Spotify (Private:MUSIC) and Apple (NASDAQ:AAPL). While Warner Music has already signed on, YouTube is in talks with two of the other big music publishers, Sony Music Entertainment (NYSE:SNE) and Universal Music (OTCPK:VIVHY).

Nvidia has releashed a new Titan graphics card, which it is billing as the "most powerful PC GPU ever created." However, it's not aimed at gamers, but rather AI and machine learning, with an eye-popping price tag of $2,999. The Titan V will be the first consumer-grade card based around Nvidia's (NASDAQ:NVDA) new Volta architecture.

Sales of Sony's PlayStation VR headset have surpassed 2M units, making it the top seller in what remains a sluggish market for virtual reality. By Dec. 3, Sony (SNE) said it had also sold 70.6M PS4 consoles since the platform was launched in 2013, maintaining its lead over Microsoft's (NASDAQ:MSFT) rival Xbox, and sustaining momentum despite the recent popularity of Nintendo's (OTCPK:NTDOY) Switch.

Cowen estimates that Amazon (NASDAQ:AMZN), Google (GOOG, GOOGL) and Facebook (NASDAQ:FB) will save a combined $4.5B on taxes in 2018 thanks to the GOP tax bill, while the tech giants should also benefit from the measure's capex expensing provision. The firm forecasts those savings to translate into big EPS boosts for each company, with Amazon boasting an expected upside of 24%. Google and Facebook will both get an EPS bump of 8%.

Today's Markets

In Asia, Japan +1.4%. Hong Kong +1.2%. China +0.6%. India +0.9%.
In Europe, at midday, London +0.4%. Paris +0.5%. Frankfurt +1.2%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.5%. Crude +1% to $57.24. Gold -0.4% to $.1248.10 Bitcoin -12.2% to $14794.
Ten-year Treasury Yield +1 bps to 2.39%

Today's Economic Calendar

8:30 Non-farm payrolls
10:00 Wholesale Trade
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
Companies reporting earnings today »
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