Wall Street Breakfast: A Big Wow For The Dow

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Includes: ACM, AJRD, APA, BA, BABA, BIDU, BW, CHK, CHTR, COL, CXW, FB, GD, GEO, GM, GOOG, GOOGL, HII, HLF, HON, HPE, ICE, JEC, KO, KSS, LMT, M, NDAQ, NOC, OA, QIHU, QQQ, RBS, SAIC, SPY, SSNLF, TOSYY, UBER, WWR, XOM
by: Wall Street Breakfast
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.

Nothing's gonna stop us now? The Dow finished with a more than 30-point gain on Thursday, hitting its tenth record closing high in a row and matching the best streak of consecutive records since 1987. Futures are heading lower today, but that could change during the session. Hopes for tax cuts and a rollback on regulations from President Trump are helping fuel the rally, with investors also excited about big federal infrastructure spending.

Economy

Speaking of tax reform... Treasury Secretary Steven Mnuchin said yesterday he expects a plan to pass through Congress before the August recess. "We think it's critical that we get back to more normalized economic growth. More normalized economic growth is 3% or higher," he added. Meanwhile, President Trump spoke positively about a border adjustment tax, stating it "could lead to a lot more jobs in the U.S."

"There will be no mass deportations... There will be no use of military in this," DHS Chief John Kelly said during a press conference following meetings in Mexico City. But Mexican officials signaled little progress had been made in bridging differences between the two countries. "We're going to have a good relationship with Mexico I hope," the U.S. President said in Washington. "And if we don't, we don't."

The yuan was hardly changed during today's session after President Trump called China the "grand champions" of currency manipulation, but his new Treasury secretary pledged he wouldn't be making any snap judgments on Beijing and its currency controls. "With Mnuchin officially sworn in... I suspect most comments on foreign exchange policies come from him," said Shuji Shirota, head of macroeconomic strategy group at HSBC Securities.

China, for the first time, became Germany's most important trading partner in 2016, overtaking the U.S., which fell back to third place behind France. The development is likely to be welcomed in Berlin, which has made it a goal to safeguard global free trade after Trump threatened to impose heavy tariffs and his top adviser accused Germany of exploiting a weak euro to boost exports.

Britain should be charged about €60B when it leaves the European Union, Austrian Chancellor Christian Kern declared, becoming the first EU leader to put a value on the size of the U.K.'s Brexit bill. The money is not strictly a charge for leaving, since the bill comprises various financial commitments made during the U.K.'s membership, such as pension obligations to EU officials and past pledges to the bloc's budget and projects.

Stocks

"[It's] difficult to announce that sort of loss, particularly one of that magnitude," Royal Bank of Scotland (NYSE:RBS) CFO Ewen Stevenson declared, after the company reported its ninth consecutive year in the red. Restructuring and misconduct charges pushed the lender to book a near £7B loss. The bank is targeting cost savings of £750M in 2018, and hopes to turn an annual profit by then. RBS -3.4% premarket.

China's securities regulator is considering offering a shortcut for some of the country's largest technology firms to list their shares, allowing them to jump a long line of applicants and boost domestic bourses. Reuters sources said the companies being considered for the shortcut could include Ant Financial (NYSE:BABA), Zhong An Online Property and Casualty Insurance and Qihoo 360 (NYSE:QIHU). Related tickers: ICE, NDAQ

Following a report by the Nikkei, a spokesman for Toshiba (OTCPK:TOSYY) said he was "not aware" that U.S. nuclear unit Westinghouse was considering a potential Chapter 11 filing. Analysts say the option could put the entire TVs-to-construction conglomerate at risk if exercised now, since Toshiba has guaranteed as much as ¥793.5B ($7B) to cover potential Westinghouse liabilities.

Two senior Samsung executives have offered to resign to take responsibility for the conglomerate's involvement in the graft scandal involving South Korean President Park Geun-hye, sources told Yonhap. Samsung Electronics (OTC:SSNLF) has also approved a new clause that aims to make donations more transparent, with any payment of more than 1B won ($882K) being screened and approved by its board.

Has Coca-Cola outgrown Coke? At an analyst conference, James Quincey, Coke's (NYSE:KO) current COO who will take the reins in May, said the firm must speed up the development of products beyond soda to become "a total beverage company" and "be bigger than the core brand." It's a shift from departing CEO Muhtar Kent, who has long called the company's namesake cola its "oxygen."

Department store operators Kohl's (NYSE:KSS) and Macy's (NYSE:M) are betting on a potential money-spinner - carving out prime space within their sprawling stores and leasing them to other retailers. The move underscores the pressing need for the two chains to better monetize their real estate assets at a time when fewer people are visiting malls.

In his first blog post since succeeding Rex Tillerson, new Exxon Mobil (NYSE:XOM) CEO Darren Woods advocated a nationwide carbon tax to discourage use of polluting fuels. It "would promote greater energy efficiency and the use of today's lower-carbon options, avoid further burdening the economy, and also provide incentives for markets to develop additional low-carbon energy solutions for the future."

"It would be wonderful, a dream would be that no country would have nukes, but if countries are going to have nukes, we're going to be at the top of the pack," President Trump said in an interview with Reuters. "Even if it's a friendly country, we're never going to fall behind on nuclear power." Related tickers: BW, HON, ACM, JEC, SAIC, URRE, OA, COL, LMT, BA, NOC, GD, AJRD, HII

The U.S. Justice Department has reversed an order by the Obama administration to phase out the use of private contractors to run federal prisons. In a memo, Attorney General Jeff Sessions said the policy impaired the government's ability to meet the future needs of the prison system. In after-hours trading: CoreCivic (NYSE:CXW) rose 3.7%, while GEO Group (NYSE:GEO) gained 2.5% on the news.

After winning a $500M verdict against Oculus for unauthorized copying of computer code, ZeniMax Media has asked a federal judge to block the firm from using the software in its products. The injunction could limit the number of games available for sale on the Rift VR headset and could be a blow to a product on which Facebook (NASDAQ:FB) has made a big bet for the future.

Charter Communications may see a post-merger benefit after new FCC Chairman Ajit Pai circulated an order reconsidering a condition imposed for taking over Time Warner Cable. The provision in question called for "overbuild" - for Charter (NASDAQ:CHTR) to add 2M additional broadband homes, 1M of those already getting service from other companies as a way to increase competition for high-speed Internet.

The heated rivalry over self-driving cars has spilled into the courthouse. Anthony Levandowski, a former key manager in the Google (GOOG, GOOGL) self-driving car project, is accused of secretly downloading 14,000 files in December 2015 before departing Waymo to create Otto, a self-driving truck maker acquired last year by Uber (UBER). The information was allegedly used to develop laser sensor navigation.

More tensions? General Motors (NYSE:GM) is backing legislation in many states that tech companies say is designed to put them at a disadvantage in the emerging market for autonomous vehicles, WSJ reports. Under the bill, which was introduced on February 8, carmakers would be allowed to operate self-driving taxi services, but it would only allow access to companies that make their own vehicles.

Thursday's Key Earnings

Apache (NYSE:APA) -3.5% missing expectations.
Baidu (NASDAQ:BIDU) flat AH hitting the reset button.
Chesapeake Energy (NYSE:CHK) -2.9% after in-line results.
Herbalife (NYSE:HLF) -0.2% AH issuing soft guidance.
Hewlett Packard Enterprise (NYSE:HPE) -6.7% AH on disappointing outlook.

Today's Markets

In Asia, Japan -0.5%. Hong Kong -0.6%. China +0.1%. India closed.
In Europe, at midday, London -0.7%. Paris -1.4%. Frankfurt -1.4%.
Futures at 6:20, Dow -0.3%. S&P -0.4%. Nasdaq -0.5%. Crude -0.6% to $54.15. Gold +0.6% to $1258.50.
Ten-year Treasury Yield -2 bps to 2.37%

Today's Economic Calendar

10:00 New Home Sales
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »