Friday Market Prepper

Economy

In his first phone call with China, President Trump told Xi Jinping he would honor the nation's "One China" policy, while the latter urged closer ties between the countries. The declaration ends weeks of uncertainty in Washington's approach to Asia and comes on the eve of a visit by Japan's Shinzo Abe to the White House. Earlier today, China reported an initial trade surplus of $51.35B for January, more than $21B of which was with the United States.

President Trump's "wall" along the U.S.-Mexico border would be a series of fences and walls that would cost as much as $21.6B, and take more than three years to construct, based on a U.S. Department of Homeland Security internal report. The price tag is much higher than a $12B figure cited by Trump in his campaign and estimates of as high as $15B from Republican Congressional leaders. Related tickers: ACM, CX, CXW, EXP, FLIR, FLR, GEO, GVA, KBR, MLM, NUE, STLD, SUM, TPC, TTEK, USCR, USG, VMC, WMS, X

"SEE YOU IN COURT, THE SECURITY OF OUR NATION IS AT STAKE!" tweeted President Trump, after the suspension of his immigration order was upheld by three judges in the U.S. Appeals Court. The government now has 14 days to ask the 9th Circuit to have a larger panel of judges review the decision "en banc," or appeal directly to the U.S. Supreme Court, which will likely determine the case's final outcome.

In a 52-47 party-line vote early this morning, Senators confirmed Georgia House Budget Chairman Tom Price as Secretary of Health and Human Services, placing him atop a sprawling agency tasked with dismantling the Affordable Care Act. During one of his two confirmation hearings last month, Price told lawmakers Obamacare would be replaced "piece-by-piece" and "no one is interested in pulling the rug out from anybody." Related tickers: UNH, AET, ANTM, CI, HUM, WCG, CNC, MOH, GTS, HQY, HCA, THC, UHS, LPNT, CYH, HCP, SEM

"The eurozone must remain together. And what we agreed on should be delivered together by all the euro member states," German Chancellor Angela Merkel declared, after Finance Minister Wolfgang Schaeuble said Greece would have to leave the bloc if it failed to meet its bailout commitments. Meanwhile, Moody's is warning the impasse between the IMF and eurozone member states is "credit negative" for Athens.

Hundreds of thousands of Iranians rallied today to mark the anniversary of the 1979 Islamic Revolution, following President Trump's warning that he had put the country "on notice." Marchers were seen carrying "Death to America" banners and effigies of Trump. "Some inexperienced figures in the region and America are threatening Iran... They should know that the language of threats has never worked," President Rouhani told the crowd at Azadi Square.

"The oil market is in wait-and-see mode," according to the IEA's latest report, which said OPEC's output cuts have achieved a record initial compliance rate of 90%, making it one of the deepest cuts in the group's history. OPEC production fell by 1M bpd to 32.06M bpd in January, the first month of its agreement, and "appears to have made a solid start to what is a six-month process." Crude futures +1% to $53.53/bbl.

Stocks

Morgan Stanley is exploring a move of its headquarters from Midtown Manhattan to Hudson Yards, the vast development going up on the West Side, WSJ reports. The bank might purchase of the remaining 2M feet at 50 Hudson Yards, the planned tower where money manager BlackRock (NYSE:BLK) is also expected to move its headquarters. MS +1.1% premarket.

Blackstone has agreed to acquire insurance broker AON's employee benefits outsourcing unit for $4.3B in cash, giving BX ownership of a business that processes work benefits for 15% of the U.S. population. It will also allow Aon to exit the capital-intensive business, allowing it to invest in growth areas beyond its core insurance brokerage operations.

Trading volumes at China's three largest bitcoin exchanges have plummeted after the PBOC put the virtual currency market under sharper scrutiny in a move that coincided with efforts to stem capital outflows. China has been the world's leading venue for bitcoin trading, with analytics site Bitcoinity estimating that the OkCoin, Huobi and BTCC exchanges account for more than 90% of the global bitcoin market. Related tickers: OTCQX:GBTC, OTCQB:BTCS, COIN

"I just visited our Oculus Research lab in Redmond, Washington where some of the best scientists and engineers in the world are pushing the boundaries of virtual and augmented reality," CEO Mark Zuckerberg wrote on Facebook (NASDAQ:FB). "We're working on new ways to bring your hands in virtual and augmented reality. Wearing these gloves, you can draw, type on a virtual keyboard, and even shoot webs like Spider-Man."

The Galaxy S8 will be unveiled in New York next month, according to WSJ, and Samsung (OTC:SSNLF) is ready to display a whole host of new features. While the physical home button will be stripped away and the fingerprint scanner moved to the back of the device, an earphone jack will be present and only curved-screen versions will be released. The company will also showcase its new virtual assistant called Bixby, and possibly its recently trademarked "Samsung Hello."

Research firm Canalys said the Apple Watch (NASDAQ:AAPL) experienced its best quarter yet in the final three months of 2016, with 6M smartwatches shipped, bringing the annual total to an estimated 11.9M. This reflected year-on-year quarterly growth of 12%, despite the company experiencing supply problems. Canalys also estimated the smartwatches made around $2.6B for Apple, accounting for 80% of all smartwatch revenues worldwide.

Takata will probably report a third consecutive annual loss as it booked a one-time charge after agreeing to settle a U.S. criminal investigation. The net loss will likely be ¥64B ($562M) in the year through March, compared with a November forecast for a ¥20B profit, Takata (OTCPK:TKTDY) said in a statement. The loss would be its widest since listing in 2006.

"We may continue to face pressure to reduce costs from new presidential administration relating to F-35 program," Lockheed Martin (NYSE:LMT) said in its annual 10-K report. "A decision to cut spending or reduce planned orders for F-35 would have an adverse impact on results of operations," but the program is "expected to represent a higher percentage of our sales in future years" (it totaled 23% of net sales in 2016).

Fighting back? Emirates said a flight from Seattle to Dubai was delayed for over six hours after it was unable to obtain a $300 spare part from Delta (NYSE:DAL), which has led a campaign against Gulf carrier state subsidies. Delta confirmed the incident, but said "this was the last spare part of its kind in our Seattle inventory and, according to policy, was kept on hand to ensure coverage for Delta's own operation." DAL +1.5% premarket.

DuPont is prepared to sell part of its crop protection business and associated R&D to a "single buyer to create a strong crop protection industry competitor," the Philadelphia Inquirer reports. A plan to separate some of the pesticides units from the rest of the company would be designed to gain European approval of DuPont's (NYSE:DD) planned merger with Dow Chemical (NYSE:DOW). Potential buyers? FMC Corp. (NYSE:FMC) and Monsanto (NYSE:MON).