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Wall Street Breakfast: Trade War On The Horizon?

Wall Street Breakfast profile picture
Wall Street Breakfast

President Trump kept up pressure on trading partners over the weekend, threatening European automakers with a tax on imports if the EU retaliates against his plan to slap tariffs on metals. Canada, the biggest supplier of steel and aluminum to the U.S., also said it would counterattack if hit by the tariffs, while China declared it would defend its interests. U.S. stock index futures are mixed to start the week as fears of a trade war rumble on.


The euro traded choppily around the $1.23 level overnight as elections propelled the eurosceptic 5-Star Movement to become Italy's largest single party, but no faction was projected to gain a majority of parliamentary seats. Support for the currency was also seen after Germany's Social Democrats backed the renewal of an alliance with Angela Merkel's conservatives, reviving the grand coalition after months of political uncertainty.

A survey closely monitored by the ECB indicated that the eurozone economy hit a slight "speed bump" in February as the central bank looks to end its ultra-easy monetary policy. The bloc's final composite PMI fell to 57.1 from January's 58.8, but remained way above the 50 level that indicates expansion. It's "too early to read too much" into the monthly decline, said Chris Williamson, chief economist at IHS Markit.

A South Korean delegation has left for North Korea, aiming to bring Pyongyang and Washington together for talks in a bid to rein in Kim Jong-un's nuclear and missile programs. Over the weekend, Iran also announced it wouldn't negotiate over its ballistic missiles until the U.S. and Europe dismantle their own nuclear weapons, keeping up the Islamic Republic's tough stance on the issue.

China's National People's Congress has officially kicked off with over 3,000 lawmakers descending on Beijing, where the country's rubber-stamp parliament is expected to eliminate the two-term limit for the presidency. Continuing a campaign to reduce risks in China's financial system, Premier Li Keqiang also set a target for economic growth for 2018 at "about 6.5%," a slight recalibration from last year's objective of "around 6.5% or higher if possible."

Amid tensions between the nations, Russia's Gazprom (OTCPK:OGZPY) is canceling its contracts to supply Ukraine with natural gas after a Stockholm arbitration court ordered it to pay more than $2.5B to Naftogaz. Russia's energy ministry said the move poses no immediate threat of natural gas to Europe, but Ukraine's government warned that it could use the supplies as a political weapon.

"The U.S. is set to put its stamp on global oil markets for the next five years," the IEA said in its latest monthly report. Beyond that, however, the agency warned that oil supply could become tight unless investment in new production rebounds from historic declines in recent years. The forecast kick-starts the annual CERAWeek conference, a gathering of thousands of oil executives, traders, bankers and investors in Houston.


The U.S. Committee on Foreign Investment has ordered Qualcomm (QCOM) to delay tomorrow's upcoming shareholder meeting by a month as it investigates whether a proposed buyout by Singapore-based Broadcom (AVGO) would put national security at risk. The intervention comes as Qualcomm shareholders were set to vote on whether to replace six of its directors with candidates put forward by Broadcom, which is seeking to force a $142B takeover. QCOM -2.3% premarket.

The EU will unveil plans this month to tax large global tech companies' revenue at a rate in the 2% to 6% range, French Finance Minister Bruno Le Maire told Le Journal du Dimanche. The proposal aims at increasing the tax bill of firms like Amazon (AMZN), Google (GOOG, GOOGL) and Facebook (FB), which are accused of rerouting their EU profits to low-tax countries such as Luxembourg and Ireland.

"We've always been considering entering the U.S. market," Xiaomi (XI) Chairman Lei Jun said at the sidelines of China's annual legislative session in Beijing. "We plan to start entering the market by end 2018, or by early 2019." The move would extend the Chinese smartphone maker's Western expansion as it plans a highly anticipated IPO that would likely raise at least $10B in the second half of this year.

Walmart will start offering prepared meals at its stores for the first time, a move that could boost the nation's biggest grocer following Amazon's (AMZN) $13.7B purchase of Whole Foods. Ten different meals are now available in 250 stores, and the program will expand to 2,000 locations by year's end. Prices of Walmart's (WMT) prepared meals will range from $8 to $10.

In a deal that would make Europe's second-largest insurer a world leader in the property and casualty market, AXA (OTCQX:AXAHY) has agreed to buy Bermuda-based XL Group (XL) for around $15.3B. Under the terms of the transaction, XL Group shareholders will receive $57.60 per share, representing a premium of 33% to XL's closing share price on March 2. XL +30.5% premarket.

Fantastical romance The Shape of Water won the Oscar for Best Picture on Sunday, with Guillermo del Toro claiming the honor for best director. Other winners: Gary Oldman was named best actor for playing Winston Churchill in Darkest Hour (TWX), while Frances McDormand claimed the award for best actress in Three Billboards Outside Ebbing, Missouri (FOXA).

Several big brands are once again beating a hasty YouTube (GOOG, GOOGL) retreat. Nike (NKE), 20th Century Fox (FOXA), Expedia (EXPE), Alibaba (BABA) and Wix.com (WIX) have suspended ads from InfoWars' channels after their commercials were streamed on the network's videos. YouTube ad campaigns don't necessarily permit firms to know where their commercials will show up but do allow organizations to use exclusion filters.

Almost 2,500 workers at General Motors' (GM) South Korean unit, equivalent to 15% of its staff, have applied for a redundancy package that the automaker is offering as part of a major restructuring. GM said last month it would close down one plant and decide on the fate of three others in the coming weeks - decisions that hang on financial support and concessions from Seoul and local unions.

A U.S. judge has dismissed a lawsuit filed by institutional investors who purchased bonds from Volkswagen's (VLKAY) U.S. unit and claimed the automaker had made false and misleading statements before Dieselgate. In other news, VW reportedly intends to change the legal structure of its trucks business this month as a first step towards an IPO of the division.

The Florida Senate has rejected a proposal to ban assault weapons, and voted for a measure to arm some teachers, weeks after 17 people were killed in the deadliest high school shooting in U.S. history. The bill also raised the minimum age to buy a rifle or a shotgun to 21 from 18, banned the use of bump stocks and included $400M in funding for schools to address mental health issues. Related tickers: AOBC, RGR

Today's Markets

In Asia, Japan -0.7%. Hong Kong -2.3%. China +0.1%. India -0.9%.
In Europe, at midday, London +0.2%. Paris +0.3%. Frankfurt +0.3%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq +0.2%. Crude +0.2% to $61.39. Gold +0.2% to $1325.60. Bitcoin +0.3% to $11513.
Ten-year Treasury Yield flat at 2.85%

Today's Economic Calendar

9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
12:30 PM TD Ameritrade IMX

Companies reporting earnings today »

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Wall Street Breakfast, Seeking Alpha's flagship daily business news summary, is a one-page summary that gives you a rapid overview of the day's key financial news. It is designed for easy readability on the site or by email (including mobile devices), and is published before 7:30 AM ET every market day. Wall Street Breakfast's readership of over 3.4 million includes many from the investment banking and fund management industries. Sign up here to receive the Wall Street Breakfast in your inbox every business day.Check out our Podcast RSS feed

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Comments (371)

06 Mar. 2018
Biotricity Announces Commercial Rollout of Proprietary Bioflux Devicehttps://finance....
Read about half the comments. Must be difficult having a Preident who is a Liar.
my Preident could drop some lbs so could Kim !
This isn't a market , I thought Don was going to teach market ?
techy46 profile picture
Gee = I wonder why?????

"CNN's Jim Acosta objected to his network not being called upon during Monday's White House press briefing, noting it was the third straight time White House press secretary Sarah Huckabee Sanders didn't take a question from the cable network.

"Sarah, this is the third briefing you have not taken a question from CNN. Do you expect the Justice Department to enforce all subpoenas, Sarah?" Acosta asked as Sanders left the podium.

Sanders continued walking out of the James S. Brady Briefing Room without looking back or acknowledging the question."
Giorgio il Buffone profile picture
Poor Jimmy. Nobody wants to play with him.
Chinese Steel dumping is the real target.

Giorgio il Buffone profile picture
Buona sera.

I still say the tariffs are just a negotiating ploy. If the chinese make concessions, there will be no tariffs.
The steel tariffs primarily hurt Canada, not China.

We have balanced trade with Canada -- in fact, a slight surplus in net dollar amounts.

The experts are saying this does practically nothing at all to address the U.S. trade imbalance Trump is so concerned about. Almost all of that is with China.
Trump is doing nothing against China. They gave him the royal treatment when he visited and now he is eating out of their hands. They knew exactly how to play his ego.

Trump is attacking the wrong target and pissing of our closest ally.
techy46 profile picture
""I won't rule out direct talks with Kim Jong Un, I just won't," Trump said, according to Politico. "As far as the risk of dealing with a madman is concerned, that’s his problem, not mine."
techy46 profile picture
""I like chaos. It really is good. Who’s going to be the next to leave? Steve Miller or Melania?"
techy46 profile picture
""This is one of the best times I've had with the media — this might be the most fun I've had since watching your faces on Election

- President Donald Trump
techy46 profile picture
Great WSB session, lot's of meat left on those chicken bones!
05 Mar. 2018
Well, if anyone has the patience to read thru all the silly comments made by sky is Gallup or twumettes, or the nambie pambie (sp) dems, I would like to add my paranoid opinion too.

70 y.o. waiting to die, but having fun still. hoping the not holds but the politics is SO dysfunctional. I once heard that when govt does very little, the market goes up. looks like after 2018 dems control. TWUMP vetoes everything except impeachment.

I wish I could find a safe place( like cash) to earn 5%++.

I'm just not sure how our country is going to survive this. republicans are out of their power HUNGRY minds. And dems have been pushed off the left wing cliffs.
Azred profile picture
Oh, hell yay!

Andy Carlini Rooney

You know what I hate. .
I hate Hollywood; and I hate smart people and education and science; I hate a free press; an independent court system and judges; and liberals, Jews, women; and colored people; and young people--why don't they get jobs.

And how about all those non Norwegian immigrants--I don't know--maybe I'm old fashioned--but I like immmigrants who can make America a curling powerhouse again.

I love flags and guns and beer and old cars-- and lots of chicken wings--
And I like to wear my MAGA hat--while I'm eating my wings and drinking my beer

And I like Donald Trump--damnit--and I don't care what Hollywood thinks.
techy46 profile picture
WTF, sure seems like liberals live to inspire hatred doesn't it?
It's better to just judge everyone and look down your nose at them. If you minimize them how can they oppose your superior beliefs?
TomasViewPoint profile picture
Hilarious. Let's talk in stereotypes.

I am a liberal. I graduated without distinction with an English Lit degree from an overpriced college. When I speak I barely move my lips so I seem more dignified. I won't admit that my ancestor were nothing but pig and cow farmers kicking around in the crap. It's just too far beneath me. I only read they NYT's and believe everything in it. I only meet with other liberals and we talk about how ignorant the masses are who are not like us. We talk about how fabulous actors are and look forward to meeting them even if they are degenerate pigs. We hate people who live in non-coastal states. They are so primitive. We hate assault weapons.....you know those guns that are painted black. Everyone else is racist but us of course. Fidel Castro was so trendy before he died. If only the world would be like us all would be nirvana. I hate Trump. He is so stupid but I like all the bitter late night talk show hosts that spoon feed me my pablum of anger. I need to go watch the View.
Tony Pow profile picture
I could not find the post about the Trump's term. Here is my reply:

He will leave in 3 years.

It is good for him too. He has made himself richer already by slipping some law (not amplified by the media except PBS) to take out taxes on some real estate dealings.

He will not be supported by many 'free loaders' after ObamaCare was replaced.

He does not look presidential to me.

I do agree he has some good ideas but the presentation is really bad. His staffs esp. the communication managers have the highest turnover in US history. He does make Twitter a tool to use.

The weakness of the two-party political system is demonstrated here in WSB. Any idea not invented by my party is bad idea. We waste all the time in arguing who's on top. We become a nation of talkers, not doers as in the 50s and 60s.
Joke of the day I heard.

The little girl wanted to be a president when she grew up. After attending a circus, she wanted to be a clown. Her smart father told her she could be both at the same time.
techy46 profile picture
"He has made himself richer already by slipping some law ....."

At 71 how much richer does he really need to be?
techy46 profile picture
US auto needs to copy BMW, Toyota and VW models and make them with robots.

When Asia and EU sue for patent infringement tell them we're retaliating for IT theft that allowed them to make all they consumer electronics they dump in US!
techy46 profile picture
Oh no, the investing bots decided to push it up again!
I do not need someone to dictate who I buy my tea from by taxation.
techy46 profile picture
Dump it all into the bay!
I understand, blasted, but the point was not "taxation" by itself, but "taxation without representation" and not only that, we became a coffee drinking nation as a show of solidarity.
Tariffs are taxes. Someone wins someone loses. It is redistributing the wealth from the consumer to the swamp critter. Have you bought a roll of aluminium foil lately?
GCAP, and WUBA are set to beat earnings estimates and are cheap to buy right now.
It looks like banks will not get what they want from the repeal of Dodd Frank

Leftfield profile picture
A great example of a policy that is simply good for the US brought about by Trump.

After so many generations of politicians who are content merely to infest their swamp, the left and too many others are unable to imagine let alone support an officeholder simply striving to do what's right which is now so far from their experience and ideas they reflexively attack it.
<< A great example of a policy that is simply good for the US brought about by Trump. >>


If you actually had read the article, you would've noticed that it's conclusion was that Trump/Republicans were largely leaving Dodd-Frank intact. Quietly of course, as they had lied to their base they would be scrapping it.

But as your post perfectly illustrates -- it doesn't matter!

Trump does essentially nothing -- but the rubes cheer and give him credit for it!
techy46 profile picture
It's not the banks that want real of Dodd Frank, it's WS investment banks.

It's those like JPM that want to gamble with the houses money!
Tony Pow profile picture
Why huge trade deficit with China

The U.S. trade deficit with China was $375 billion in 2017.

• The above figure is a little exaggerated. Using iPhone as an example, it is designed by Apple and assembled in China with components from many countries. The design is not included in calculating the deficit. It applies to many products including components.

• A foreign country dumps the products to drive our companies out-of-business and then raises prices. So far, China has not raised prices in most products. Some said some Chinese steel products have lower costs than the combined costs of the raw materials. Most likely the costs of the raw materials are based in US, not in China.

• We need to negotiate with China (or any country) to take out tariffs and trade barriers on our products.

• Are we losing competitive edge in some sectors? It could be we are the victims of our own success. The workers have to be protected with regulations and higher wages, so is our environment.

Our high debt could be due to our political system. The politicians do not plan anything longer than four years. They buy votes by satisfying the majority of voters. Their primary tool is borrowing more money.

All these reduce our competitive edge as our taxes are used for consumption (such as wars) instead of investing (such as building bridges or funding researches). Hence, we cannot blame everything on China when our politicians cannot fix our problems.
techy46 profile picture
Trade war is better then nuclear war!
Tony Pow profile picture
Trade war could lead to nuclear war. There are no winners in any war.

About 250 years, the west including US and Japan asked China to open trade. China said No as there was nothing the west produced was needed. The 8-naition alliance forced China to open trades with battleships and guns. They bankrupted China. Now, they want China not to trade except rare earth elements. How ironic!
techy46 profile picture
"There are no winners in any war"

That's pure PC nonsense.

US won WW2 and is still reaping rewards.

There were plenty of casualties and losers!
blueline profile picture
China: "parliament is expected to eliminate the two-term limit for the presidency"

Should we start calling him Emperor Xi? Will it be the new Xi dynasty?
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