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Daily from Wall Stret, Jan 26



  • Trump Greets UK PM May as World Leaders look for Cues
  • Mexico Peña Nieto says won´t Pay for Wall


While Peña Nieto says Mexico will not pay for the announced wall on the US Mexican border, U.S. President Donald Trump said on Thursday his Mexican counterpart, Enrique Pena Nieto, should cancel his scheduled visit to Washington if Mexico refuses to pay for a wall he has ordered constructed along the border.

“The U.S. has a 60 billion dollar trade deficit with Mexico. It has been a one-sided deal from the beginning of NAFTA with massive numbers… of jobs and companies lost. If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting,” Trump said on Twitter.

His message could undo a planned summit next week during which the two leaders were expected to address a relationship frayed by the new U.S. president’s determination to build a wall along their shared border and to renegotiate the North American Free Trade Agreement.

Even before Trump’s tweet, Pena Nieto faced growing pressure at home to scrap the meeting over objections to the border wall, Reuters reports.

Meanwhile,Theresa May will provide the first test for how world leaders can deal with Donald Trump when she arrives in the U.S. to welcome the new president to the global stage and lay the groundwork for a U.S.-U.K. trade deal.

Today’s Markets

In Asia, Japan +1.8%. Hong Kong +1.4%. China +0.3%. India +1.2%.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt +0.5%.
Futures at 6:20, Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude +0.3% to $52.92. Gold -0.5% to $1191.90.
Ten-year Treasury Yield +1 bps to 2.53%

Wednesday’s Key Earnings

Abbott (NYSE:ABT) flat on in-line earnings.
AT&T (NYSE:T) +0.1% AH adding subs and branded smartphones.
Boeing (NYSE:BA) +4.2% seeing more plane deliveries.
eBay (NASDAQ:EBAY) +8.6% AH after rise in holiday sales.
Freeport-McMoRan (NYSE:FCX) -3.1% as copper output seen slowing.
Las Vegas Sands (NYSE:LVS) -4.2% AH pinched by tight margins.
Mattel (NASDAQ:MAT) -10.7% AH on a weak holiday quarter.
Qualcomm (QCOM) -3% AH overshadowed by global challenges.
United Technologies (NYSE:UTX) -0.6% after revenues fell short.
Western Digital (NYSE:WDC) -0.4% AH hit by recent charge.


  • Mexican President Enrique Pena Nieto is coming under pressure to cancel his meeting with Trump after he formally announced plans to build a border wall. The U.S. President also slashed funding to so-called sanctuary cities in the start of a strategy to tighten immigration controls. Construction of the wall will begin within “months,” according to Trump, stating Mexico would reimburse the U.S. for the cost “100%.” Related tickers: ADP, WU, MGI, PYPL, XOOM, ACN
  • President Trump will impose a temporary ban as early as today on virtually all refugee admissions to the U.S. from “countries that have tremendous terror.” “Our country has enough problems without allowing people to come in who, in many cases or in some cases, are looking to do tremendous destruction,” he told ABC News. Trump is also preparing to act on another pledge, imposing what he’s called “extreme vetting” of visa applications.
  • Pyongyang is ready to test-fire an intercontinental ballistic missile “at any time, at any place,” said Choe Kang Il, deputy director general for North American affairs at North Korea’s foreign ministry. “Our measures to bolster our nuclear arsenal are all defensive in nature.” The country has conducted a total of five nuclear tests, including two last year, but has never successfully launched an ICBM.
  • The British economy showed no signs of losing momentum at the end of 2016, with a better-than-expected set of economic figures in Q4. GDP grew by 0.6% in the three months to December, the same rate of growth as the previous two quarters. Meanwhile, Theresa May is on her way to the U.S., where she will meet leading Republicans in Philadelphia this evening before tomorrow’s audience with the President Trump.
  • Italy’s highest court has ordered limited changes to a controversial new electoral law, in a ruling that could pave the way for an early national vote as soon as June. Elections in the EU’s No. 4 economy, and one whose political and economic problems have spawned a strong populist movement, could deepen uncertainty in the region, with votes already slated this year in the Netherlands, Germany and France.



Johnson & Johnson has put $30B on the table for Actelion (OTCPK:ALIOY) in a deal that will also spin off the Swiss firm’s R&D unit. The all-cash offer, valued at $280 per Actelion share, will be payable in U.S. dollars and was unanimously approved by the boards of both companies. J&J (NYSE:JNJ) further outlined that the transaction will be financed by cash held outside of the United States. Actelion shares +20% in Zurich.

European earnings roundup: Ericsson (NASDAQ:ERIC) +2.2% premarket despite swinging to a loss in Q4 and cutting its dividend. Unilever (NYSE:UL) is 4.5% lower in early trade after warning that tough conditions are likely to continue in the first half of 2017. Bottoms up! Diageo is confident of achieving its targets for the year after posting better-than-expected sales. DEO +6% premarket.

Tech veteran Hugo Barra is joining Facebook (NASDAQ:FB) to oversee the social network’s virtual reality efforts, including the work of the Oculus VR team. “Hugo shares my belief that virtual and augmented reality will be the next major computing platform,” CEO Mark Zuckerberg said in a Facebook post. Barra, a former executive at Alphabet’s Google, just left Chinese smartphone maker Xiaomi (Private:XI) this week.

Likely pushing it to its ninth consecutive annual loss, RBS is taking a £3.1B hit to cover the cost of a toxic bond mis-selling scandal in the U.S. “Putting our legacy litigation issues behind us remains a key part of our strategy,” the lender said in a statement. The bailed-out bank has already incurred £50B of cumulative annual losses since taxpayers pumped in £45B to keep it afloat. RBS +3.1% premarket.

More than 20 banks will meet with German regulators on Monday to be briefed on the requirements for moving jobs from London to Frankfurt, as the city hopes to capitalize on the impact of Brexit. Sources said BaFin would make it clear that no “letter-box” operations would be accepted and that banks would have to have significant risk management arrangements and senior executives based in Frankfurt.

Whoops! AFM, the Netherlands’ watchdog, mistakenly published details on hundreds of short selling trades, including bets against Dutch banks by George Soros, before quickly removing them. European market rules introduced after the financial crisis require hedge funds to report their short positions, but only those that are larger than 0.5% of a company’s outstanding shares are supposed to be made public.

Embracing an idea it has previously resisted, the New York Stock Exchange (NYSE:ICE) is trying to introduce a “speed bump” for some stocks. The NYSE will ask the SEC to allow for a 350-microsecond delay for small- to mid-cap companies that trade on what was formerly called the American Stock Exchange. The speed bump was first introduced by IEX, the venue that rose to prominence after the publication of Michael Lewis’ “Flash Boys.”

News from the M&A sector: WGL Holdings (NYSE:WGL) +3.7% premarket after agreeing to be acquired by AltaGas (OTCPK:ATGFF) for about $6.4B in cash. McKesson (NYSE:MCK) is buying privately held CoverMyMeds for about $1.1B to strengthen its technology offerings, and United Rentals (NYSE:URI) is purchasing NES Rentals Holdings II for about $965M. MCK -5.9%; URI +8.7% premarket.

Kraft Heinz plans to give all of its salaried U.S. employees the day off following the Super Bowl, a move that the food giant hopes will generate more publicity than buying a 30-second ad for millions of dollars (like it did in 2016). Kraft (NASDAQ:KHC) is also partnering with Oprah Winfrey on a joint venture called Mealtime Stories, which will initially make ready-to-eat refrigerated products across multiple categories.

The U.S. Navy is moving at warp speed to develop lasers with more lethality, precision and power sources as a way to destroy attacking missiles, drones aircraft and other threats. It plans to fire a 150-kw weapon being developed by Northrop Grumman (NYSE:NOC) off a test ship within a year, according to Rear Adm. Ronald Boxall. “Then a year later, we’ll have that on a carrier or a destroyer or both.”

Exxon Mobil has named an environmentalist to its board: Susan Avery, a former president of the Woods Hole Oceanographic Institution and former professor at the University of Colorado. The appointment is seen as Exxon’s (NYSE:XOM) latest effort to combat criticism of whether the company misled consumers and investors about the potential impact of climate change.

Worries in the auto industry… Kia Motors (OTC:KIMTF) is drawing up a contingency plan in response to President Trump, reflecting growing wariness by Asian exporters about the prospect of new American trade policies. Trump has promised to revive industrial jobs by forcing automakers to stop making cars in Mexico, threatened to tax imports and pledged to make it more attractive for businesses to operate in the U.S.

Just weeks after suddenly tweeting “traffic is driving me nuts” and he’s going to open “The Boring Company,” Elon Musk said it’s on the verge of happening. “Plan to start digging in a month or so,” the SpaceX (Private:SPACE) and Tesla (NASDAQ:TSLA) founder wrote on Twitter. Where will the tunnel be? “Starting across from my desk at SpaceX. Crenshaw and the 105 Freeway, which is 5 mins from LAX.”

Apple has filed two lawsuits against Qualcomm (NASDAQ:QCOM) in China, extending a legal battle with its longtime chip supplier into the world’s biggest market for smartphones. The suits, which Apple (NASDAQ:AAPL) said it filed on Monday in Beijing’s Intellectual Property Court, make claims similar to those in a U.S. lawsuit the iPhone maker filed last week targeting the way Qualcomm sells proprietary technology that is critical for smartphones.

Facebook is updating Trending, the section that highlights popular topics being discussed on its platform, to better prevent fake news stories from appearing there. As part of the update, Facebook (FB) said it’s going to stop pulling in trending topics that surface based off a single news report. Meanwhile, Google (GOOG, GOOGL) kicked 200 publishers off one of its ad networks in the fourth quarter, partly in response to the proliferation of fake news sites.

Global risks stance at a glance:



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