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Today's Markets
In Asia, Japan +0.6%. Hong Kong -0.1%. China -0.7%. India +0.3%.
In Europe, at midday, London flat. Paris +0.4%. Frankfurt +0.7%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq flat. Crude +0.4% to $67.36. Gold +0.1% to $1343.60. Bitcoin +1.9% to $8067.
Ten-year Treasury Yield flat at 2.83%
Today's Economic Calendar
7:30 Fed's Rosengren speech
9:00 Fed's Bullard speech
10:00 Consumer Sentiment
10:00 Job Openings and Labor Turnover Survey
1:00 PM Baker-Hughes Rig Count
The banking industry is likely to have benefited from a powerful profit formula, including tax cuts, rising interest rates and more robust economic growth, as earnings reports pour in today from Citigroup (NYSE:C), JPMorgan (NYSE:JPM), PNC (NYSE:PNC) and Wells Fargo (NYSE:WFC). With financials comprising 14.7% of the S&P 500's market cap, the second highest after technology, such a big move could provide a big boost for the market.
Economy
It's the first Chinese trade deficit in more than a year. With analysts pointing to seasonal factors like China's New Year holiday, dollar-denominated exports fell 2.7%, while imports rise 14.4%, resulting in a deficit of almost $5B. The figures come against a backdrop of growing U.S.-China trade tensions with threats exchanged to impose import tariffs.
"Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have BILATERAL deals with six of the eleven nations in TPP," President Trump wrote in a tweet overnight. The comments came hours after he indicated the U.S. might rejoin the trade deal, asking trade representative Robert Lighthizer and economic adviser Larry Kudlow to reopen negotiations.
A petition to split California into three separate states has gathered about 600,000 signatures, well more than the 365,880 required to be on the ballot in November. Leading the effort is venture capitalist Tim Draper, who has been lobbying for the initiative since 2014. To go into effect, California would have to certify the signatures, voters will need to pass the measure, followed by U.S. Congressional approval.
Aluminum prices are heading for their best week in at least three decades, soaring as much as 15.7% to $2,325 per metric ton, as U.S. sanctions on major Russian producer Rusal (OTC:RUALF) sent buyers scrambling to find supplies. Short-term price hikes won't do much to affect the cost of the consumer goods, but if aluminum remains expensive, companies will eventually look to raise prices on products that use the metal.
Hitting back... Russian lawmakers have drafted legislation in response to new U.S. sanctions. It would ban American food and agricultural products, tech equipment and software, medical products, and tobacco and alcohol. The draft also proposes barring cooperation on atomic energy and aerospace, and stopping U.S. firms from taking part in Russian privatization deals.
"Political uncertainty in the Middle East has returned to the fore," the IEA said in its closely watched monthly report. "It remains to be seen if recently elevated prices are sustained and if so what are the implications for the market demand and supply dynamics." With crude futures at highs not seen since December 2014, the IEA also called OPEC's goal to shrink oil stocks a "mission accomplished."
Stocks
After accusing Amazon of hurting the organization, President Trump has ordered the creation of a task force to study the U.S. Postal Service, which has lost $65B since the 2007-2009 recession. "The USPS... must be restructured to prevent a taxpayer-funded bailout," according to the order. Wall Street analysts have estimated that Amazon (NASDAQ:AMZN) pays USPS roughly half what it would to UPS or FedEx (NYSE:FDX) to deliver packages. AMZN -0.6% premarket.
End of an era? In mid-July, Sears (NASDAQ:SHLD) will close its last department store in Chicago, where the company was based for more than 100 years. The planned shutdown comes after the company closed nearly a fifth of its U.S. department stores and shed more than 50,000 jobs in 2017. In the past seven years, it's racked up more than $10.8B in losses.
Speaking at his first news conference as Volkswagen (OTCPK:VLKAY) CEO, Herbert Diess said he would look at the different assets in VW's portfolio and consider whether keeping them makes sense. "We will review all options," he declared, expressing hopes to turn the multi-brand conglomerate into a slimmed down company with strong brands.
SpaceX has authorized a $500M Series I financing round and is selling equity at $169 per share, meaning the company could be worth almost $24B. At the new valuation, SpaceX (SPACE) would be the third-highest valued U.S. private company after UBER and Airbnb (AIRB). Recode notes that backers include Draper Fisher Jurvetson, Founders Fund, Google (GOOG, GOOGL) and Fidelity.
More trouble for Seaworld? Shares slipped 4.2% AH following a disclosure that the company had received a Wells notice from the SEC indicating that agency staff would recommend a civil enforcement action against the company. Seaworld (NYSE:SEAS) received subpoenas last June from the DOJ and SEC regarding its response to the documentary Blackfish, which criticized its treatment of killer whales.
Canada Prime Minister Trudeau is reportedly breaking off a foreign trip to hold an emergency meeting with the premiers of Alberta and British Columbia about their dispute over Kinder Morgan's (NYSE:KMI) Trans Mountain pipeline expansion. Both premiers said they would attend the Ottawa session but made clear they were sticking to their positions.
Following a bitcoin price surge yesterday, Yahoo Japan (OTCPK:YAHOY) said it would buy a 40% stake in cryptocurrency exchange BitARG Exchange Tokyo. Services are planned for launch in the fall. The deal also comes after Japanese online brokerage firm Monex (OTCPK:MNXBY) announced last week that it would acquire hacked crypto exchange Coincheck for $34M.
Qualcomm's recently ousted chairman is gathering potential investors to make a fully financed bid for the chipmaker in the next two months, CNBC reports. Paul Jacobs would then run the company after it's gone private. He's hoping for fewer than 10 owners and has reportedly hired two banks as well as lawyers to work on the deal. QCOM +3.3% AH.
Broadcom shares climbed 4.5% to $250 in extended trading after announcing a plan to buy back up to $12B of its common stock. The repurchase program is effective until the end of the company's fiscal year 2019. Broadcom (NASDAQ:AVGO) moved back to the U.S. from Singapore earlier this month, following President Trump's decision to block its $117B offer to buy Qualcomm (NASDAQ:QCOM).
"With his wife's reluctant permission," Bob Iger had "seriously explored" a presidential bid last election cycle, when the Fox (NASDAQ:FOXA) deal sealed his fate, the Disney (NYSE:DIS) CEO told Vogue. The $52B acquisition, if it passes regulatory muster, will likely keep him at Disney through 2021, dimming the chances for a potential White House run in 2020.
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Thursday's Key Earnings
BlackRock (NYSE:BLK) +1.5% after topping estimates.
Delta (NYSE:DAL) +2.9% increasing passenger traffic.
Rite Aid (NYSE:RAD) -0.6% following in-line earnings.
