Wednesday Morning Market Prepper

Economy

President Trump will be taking action on immigration today, with plans to sign executive orders to limit the U.S. intake of refugees, as well as a temporary ban on people coming from some Muslim majority countries. "Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!" he wrote on his personal Twitter feed. Related tickers: MLM, VMC, GVA, TTEK, X, NUE, STLD, FLR, KBR, GEO, CXW

When will the gavel drop? According to WSJ, President Trump has culled the candidates to fill a vacancy on the Supreme Court to a handful of federal appellate judges. The list includes Neil Gorsuch, Thomas Hardiman, Raymond Kethledge and William Pryor. Trump said he would make his nomination next week, replacing the late Justice Antonin Scalia.

Italy's Constitutional Court has begun a hearing to assess the legitimacy of the country's electoral law, which relates to voting in the lower house of parliament. The ruling, which is expected later today, could influence the timing of new elections. Former Prime Minister Matteo Renzi introduced the legislation, known as "Italicum," saying it would bring stability to the country, but his opponents claim it gives too much power to the winning party.

Heavy pollution enveloping much of Europe has prompted emergency measures across the continent, as extreme cold, no wind and heavy burning of coal and wood for heating left many regions shrouded in smog. In several countries, including Britain, France and Belgium, officials have cautioned against physical exertion for children and the elderly. Hundreds of flights have also been canceled and heavy polluting vehicles have been ordered off the road.

More positive data out of Japan... Exports climbed for the first time in 15 months in December, rising 5.4% on strong sales of electronics and car parts, a positive sign for the export-reliant economy as global demand picks up. The Nikkei got a boost from the news, closing up 1.4%, as well as getting a lift from a recovery in the U.S. dollar.

Puerto Rico's new governor wants to replace a law that allows the U.S. territory to redirect revenues earmarked for bondholders to pay for essential services. It's the latest move to court debt holders ahead of high-stakes restructuring talks. Spokesman Ramon Rosario told reporters that the government planned to introduce legislation on the so-called debt moratorium law today.

Canada will focus on preserving its U.S. trade ties during talks to renegotiate NAFTA, but may not be able to help Mexico avoid being targeted by the Trump administration. "We love our Mexican friends. But our national interests come first and the friendship comes second," government sources said on the sidelines of a cabinet retreat in Calgary. "The two are not mutually exclusive."

Stocks

Deutsche Bank is preparing plans to sell off parts of its of its asset management arm, which is believed to have a market cap of at least €6B. According to Handelsblatt, a partial flotation is considered a done deal. Alarm bells? CEO John Cryan said in Davos that "asset management remains absolutely core," but if Deutsche is struggling, how are other banks doing? DB +2.2% premarket.

A golden parachute from Goldman Sachs. Gary Cohn is set to walk away from the Wall Street bank with around $100M as he begins his new role as President Trump's top adviser on the economy. The former COO was recently named as director of the national economic council, and is among half a dozen ex-Goldman (NYSE:GS) employees to have taken up roles with the Trump administration.

Wells Fargo is eliminating its policy of informing branches a day before they are visited by internal inspectors. The decision comes after WSJ reported on the advance notice, describing how it gave staff time to cover up problematic sales practices by shredding documents and forging signatures. "You became numb to it," said one Well's (NYSE:WFC) employee. "It became pretty normal."

European earnings roundup: Santander (NYSE:SAN) +3.6% premarket after the eurozone's largest bank defied margin pressure with Q4 net profit of €1.6B, as a pick-up in Brazil helped offset weakness in the U.K. Novartis (NYSE:NVS) missed expectations as generic competition heated up, but the Swiss drugmaker will return cash to shareholders, raising its dividend and launching a $5B buyback. NVS +1.5% premarket.

Bottled water - not soda - is taking center stage in PepsiCo's (NYSE:PEP) war against Coca-Cola (NYSE:KO). The beverage giant has bought a 30-second Super Bowl ad to debut the company's new premium bottled water brand, "LIFEWTR," that is positioned to compete with its archrival's "smartwater." The product will be priced at around $2.70 for a 1-liter bottle.

Activist investor Thomas Sandell has won a three-year battle to split Bob Evans Farms' (NASDAQ:BOBE) restaurant and packaged food businesses. Golden Gate Capital will purchase the struggling chain of 522 family dining restaurants for $565M, while the faster-growing packaged foods arm, which will retain the Bob Evans Farms name, has acquired Pineland Farms Potato Co. for $115M. BOBE +15.8% premarket.

Ramping up marketing efforts... McDonald's (NYSE:MCD) is celebrating the rollout of its revamped Big Mac sandwiches - Grand Mac, Big Mac and Mac Jr. - by giving away 10,000 bottles of Special Sauce tomorrow at participating locations. The changes come on the heels of news that only one in five millennials have tried a Big Mac, according to a McDonald's memo, which was passed among operators in 2016.

Phillips 66 is buying crude from the U.S. Strategic Petroleum Reserve after submitting a winning bid in an auction held earlier this month by the U.S. Department of Energy. The PSX sale is part of a resolution to sell up to $375M of crude in fiscal 2017 to fund operational improvements to the infrastructure that holds the reserves. The emergency stash is held in salt caverns in Louisiana and Texas.

A U.S. judge overseeing the bankruptcy of Linn Energy (NASDAQ:LINEQ) is backing its goal of shedding $5.5B in debt and splitting into two companies. A final version of the plan is expected to be filed later today, putting to rest one of the biggest bankruptcies filed by an energy firm amid a brutal two-year slump in oil prices.

American Airlines is getting rid of seat-back screens in its new fleet of domestic Boeing (NYSE:BA) aircraft. The carrier reasoned that with over 90% of passengers bringing their own device on board these days, the screens are unnecessary. "We've committed to investing in fast satellite-based Internet access and power at every seat," American Air (NASDAQ:AAL) said in a statement.

With a replacement AirPod going for $69 each, many consumers have been worried about the expensive wireless earbuds. To brush aside the concerns, Apple (NASDAQ:AAPL) has unveiled an app entitled "Find my AirPods." The feature will show a map of where the earbuds were last connected, and could activate a chirping sound to better locate them within close proximity.

So much for the first tech IPO of the year. Cisco (NASDAQ:CSCO) just snapped up AppDynamics for $3.7B, one day before the company was scheduled to sell shares to the public at a valuation of less than $2B. AppDynamics develops software to help businesses monitor their mobile apps and websites, and generated revenue of $158.4M in the first nine months of 2016, up 54% from the prior year.