Morning Brief: Trump eyes tariffs on $60B of Chinese imports
Wednesday, March 14, 2018
What to watch today
Investors will be looking for more positive action in the stock market on Wednesday after stocks sold off across the board on Tuesday following a flurry of news out of Washington, D.C., some of which mattered to investors and some of which was largely a sideshow.
In the morning, retail sales data for February will be the economic highlight as economists expect a 0.3% increase in sales over the prior month after January’s data disappointed.
Ian Shepherdson, an economist at Pantheon Macro, notes that retail sales rocketed higher after last summer’s hurricanes in Texas and Florida, pushing three-month annualized sales gains through November to 10%, more than double the prior trend. Recent data is now moving past this inflated period, and some softness in retail sales could persist into the end of the first quarter.
On the earnings side, results expected on Wednesday include quarterly results from Progressive (PGR), Williams-Sonoma (WSM), Noodles & Co. (NDLS), and 3D Systems (DDD).
Top news
Trump eyes tariffs on up to $60B Chinese goods: President Donald Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors, two people who had discussed the issue with the Trump administration said on Tuesday. A third source who had direct knowledge of the administration’s thinking said the tariffs, associated with a “Section 301” intellectual property investigation, under the 1974 U.S. Trade Act begun in August last year, could come “in the very near future.” [Reuters]
Walmart to expand grocery delivery as Amazon battle intensifies: Walmart Inc. (WMT) plans to expand its grocery home-delivery service to more than 100 metro areas this year, a sign its food fight with Amazon.com Inc. (AMZN) is heating up. The service, currently in six cities, will roll out to more than 40% of U.S. households by the end of the year, the company said on Wednesday. [Bloomberg]
Adidas shares jump on buyback, profit optimism: Shares of German sportswear firm Adidas soared on Wednesday after it announced a large buyback, gave an upbeat outlook for 2018 and lifted its 2020 profitability forecast, helped by rapid growth of e-commerce. Adidas, which has seen its shares fall 15% in the past six months as sales growth cooled, said late on Tuesday it plans to buy back up to 3 billion euros ($3.7 billion) worth of its shares by 2021, or almost 9% of its share capital. [Reuters]
Google to ban ads on cryptocurrencies: Alphabet Inc.’s (GOOGL) Google said on Wednesday it will ban advertisements for cryptocurrencies and related content starting in June. Under the new policy, the company will ban ads for unregulated or speculative financial products like binary options, cryptocurrency and financial spread betting among others. [Reuters]
China sovereign fund exits Blackstone investment: China’s sovereign wealth fund China Investment Corp (CIC) has sold its equity holding in Blackstone Group LP, the U.S. private equity firm said in a filing, exiting from an 11-year old investment. The original agreement with Beijing Wonderful Investments — the legal entity set up by CIC to invest in Blackstone — was struck in May 2007, just before the private equity firm’s initial public offering a month later. [Reuters]
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