Monday Morning Reads

Economy

Canada's largest oil producing province has ordered an unprecedented output cut, adding to global actions to combat a recent price crash. Facing a pipeline bottleneck and glut of oil in storage, Alberta will force producers to slash output by 8.7%, or 325K barrels per day, until excess crude is drawn down (the cuts will then drop to 95K bpd until Dec. 31, 2019). The measures follow a renewed commitment over the weekend by Saudi Arabia and Russia to extend their deal to manage the oil market. Crude futures +5.2% to $53.59/bbl.

Just days before a crucial OPEC meeting, Qatar announced plans to pull out of the oil cartel in January 2019. "Achieving our ambitious growth strategy will undoubtedly require focused efforts, commitment and dedication to maintain and strengthen Qatar's position as the leading natural gas producer." Qatar has also faced a blockade and diplomatic isolation from its regional neighbors - which maintain the Gulf state supports terrorism - since June 2017.

"I will be formally terminating NAFTA shortly," President Trump told reporters aboard Air Force One on his way home from Argentina, giving six months for lawmakers to approve the USMCA trade deal signed on Friday. "Just so you understand, when I do that - if for any reason we’re unable to make a deal because of Congress, then Congress will have a choice" of the new deal or returning to trade rules from before 1994 when NAFTA took effect.

Another bright spot at the G20 summit in Buenos Aires was the emergence of a joint statement affirming the "importance of the multilateral trading system" and "reforming the WTO to improve its functioning." The milestone follows recent fails at the G7 summit in June and last month's APEC forum in Papua New Guinea. In order to achieve the communique, negotiators had to ditch taboo words like "protectionism" and "fair trade practices."

U.S. stock exchanges, including NYSE (NYSE:ICE) and Nasdaq (NASDAQ:NDAQ), will close Wednesday to honor the memory of former President George H.W. Bush, who passed away late Friday at the age of 94. The last time U.S. financial markets had such a closure was in 2007 after the death of former President Gerald Ford. SIFMA and CME Group (NASDAQ:CME) haven't yet confirmed whether bond, futures and options markets will also suspend trading on Dec. 5.

Emmanuel Macron is considering declaring a state of emergency, which allows authorities to prevent protests and other public gatherings. It follows the third weekend of demonstrations by the gilets jaunes - or yellow vests - which have broadened their protests as a rallying cry for those who say his policies favor the wealthy and punish the working class. Violence exploded on Saturday, leaving 133 people injured, the Arc de Triomphe vandalized, and the heart of Paris dotted with burning cars and smashed storefronts.

Turkish annual consumer inflation slowed last month from a 15-year high in October, dropping to 21.6% from 25.2%, suggesting the central bank's September rate hike is rippling through the economy. The lira strengthened after the report and was trading 1% higher at 5.1629 per dollar, though some fear the sudden downturn in prices brings with it the risk of an early loosening of monetary policy.

Andres Manuel Lopez Obrador has been sworn in as Mexico's next president, starting his six-year term with a promise to end corruption, poverty and extreme violence. The months since his election have been a white-knuckle ride for investors. Most recently, he canceled a $13B new Mexico City airport, leading investors to dump shares, bonds and the peso. Though it has since pared some of those losses, the Mexican bourse is still close to three-year lows.

Stocks

"China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%," President Trump tweeted after a temporary truce in the U.S.-Sino trade war. The move is a boon for automakers including Tesla (NASDAQ:TSLA), BMW (OTCPK:BMWYY) and Ford (NYSE:F), which manufacture in the U.S. for export to China. Carmaker shares on the move premarket: TSLA +3.7%, F +3.1%, GM +4.2%; FCAU +2.8%.

The world's first commercial license for an electric driverless truck is expected to be awarded by Sweden's Transport Agency in January, according to the FT. Powered by the Nvidia Drive (NASDAQ:NVDA) platform, Einride and DB Schenker's "smart container on wheels," called the T-Pod, is considered "Level 4" Autonomous. The vehicle also lacks a driver cabin, which can be half the cost of building a truck, offering more room for freight.

The future of the Renault-Nissan alliance "is up to private-sector shareholders and it's important to maintain a stable relationship," Japanese Prime Minister Shinzo Abe told French President Emmanuel Macron at the G20 summit. The French government holds a 15% stake in Renault (OTCPK:RNLSY), which in turn has a 43.4% holding in Nissan (OTCPK:NSANY) and voting majority at its shareholder meetings. Nissan's reciprocal 15% Renault stake carries no voting rights, a long-running source of frustration for the Japanese.

Following the temporary trade war ceasefire between the U.S. and China, President Trump revealed that if Qualcomm's (NASDAQ:QCOM) $44B deal for NXP Semiconductors (NASDAQ:NXPI) came back to Xi Jinping, he would "most likely approve it quickly." "While we were grateful to learn of the comments... the deadline for that transaction has expired," a representative for Qualcomm told Reuters. "Qualcomm considers the matter closed." QCOM +3%; NXPI +5% premarket.

Upgraded AirPods with "wireless charging support" will be released in the first quarter of 2019, along with Bluetooth 5.0 and a W-series chip, according to noted Apple (NASDAQ:AAPL) analyst Ming-Chi Kuo. However, it's still unclear if the charging case will be compatible with current-gen AirPods, or if there will be entirely new earbuds to look forward to. Overly optimistic estimates? Kuo expects Apple to sell 55M, 80M, and 110M AirPod units in 2019, 2020, and 2021.

Amazon is testing its cashierless checkout technology for bigger stores, sources tell the WSJ. If successful, the strategy would further challenge brick-and-mortar retailers racing to make their businesses more convenient. It's unclear whether Amazon (NASDAQ:AMZN) intends to use the technology for Whole Foods, although that is the most likely application if executives can make it work.

The U.S. House Judiciary Committee will likely put off until next week a hearing with Google (GOOG, GOOGL) CEO Sundar Pichai on context filtering practices because of the state funeral of former President George H.W. Bush. After skipping a high-profile Senate hearing, Pichai had agreed to testify before the panel over Republican concerns that the company is biased against conservatives. Google has denied the allegations.

Outbidding private equity firm Apollo Global (NYSE:APO), Nexstar (NASDAQ:NXST) has reportedly reached an agreement to acquire Tribune Media (NYSE:TRCO) for about $4.1B. The deal would make it the largest local U.S. TV station operator by adding Tribune's 42 stations to its portfolio of 174 stations and propel it past rival Sinclair Broadcast Group (NASDAQ:SBGI). A deal could be announced later today.

Deutsche Bank is not at risk of a takeover, its chief executive told Bild am Sonntag, after DB shares fell to a record low on Friday in the wake of a two-day raid related to money laundering allegations. "We are on track to make our first profit for three years. It's only a matter of time before this progress is reflected in the share price," Christian Sewing declared. Speculation in the past has centered around tie-ups with Switzerland's UBS or German peer Commerzbank (OTCPK:CRZBY).

Fighting off competition from Nestle (OTCPK:NSRGY) and Coca-Cola (NYSE:KO), Unilever (NYSE:UN) has agreed to buy GlaxoSmithKline's (NYSE:GSK) consumer nutrition business for €3.3B, expanding its footprint in India with the popular hot malted beverage Horlicks. It will pay for the deal in cash and shares of its listed Indian subsidiary. The Horlicks product line fits the bill for global consumer goods companies hunting for assets to satisfy demand for healthy and convenient foods.

Pressured by investors, Royal Dutch Shell (RDS.A, RDS.B) will begin linking carbon emission targets with executive pay, subject to a shareholder vote in 2020. The firm is still in talks with shareholders over precise emissions targets and what percentage of pay might be affected, but it's estimated that as many as 1,300 high-level employees could be affected.

The U.S. State Department will conduct another environmental review of TransCanada's (NYSE:TRP) long-pending Keystone XL oil pipeline, in a move that could lead to additional delays of the project. TransCanada spokesman Terry Cunha said the announcement was expected after the ruling of Judge Brian Morris on Nov. 8, which halted the pipeline's construction on the grounds that the Trump administration did not complete a full analysis of environmental impacts.