Thursday’s Market Prepper

Economy

In an interview with CBS This Morning that will air today, House Speaker Paul Ryan will express fears that the GOP is pushing the President to the other side of the aisle after last week's healthcare bill collapse. "I don't want that to happen," he'll warn, referring to Trump's offer to work with Democrats. Reports also suggest House Republicans may try to hold another vote next week on their Obamacare replacement.

According to a draft proposal being circulated by the U.S. trade representative's office, the U.S. would keep some of NAFTA's most controversial provisions, including an arbitration panel that lets investors in the three nations circumvent local courts to resolve civil claims. NAFTA negotiations also wouldn't deal with forex policies or targets for bilateral trade deficits, but could allow tariffs to be reinstated if a flood of imports causes "serious injury" to domestic industries.

Turkey has officially ended the military operation "Euphrates Shield" it launched in Syria last August. The development comes ahead of today's visit to Turkey by Secretary of State Tillerson, who will meet with President Erdogan. Topics that will likely be discussed include ISIS, Iranian sanctions and Halkbank (OTCPK:THBIY), and the extradition of U.S.-based cleric Fethullah Gulen.

Theresa May is set for another battle in parliament, this time to push through her Great Repeal Bill - a piece of legislation aimed at removing EU law from Britain's statute book. The government will publish the White Paper today, which will be debated, consulted on and very likely amended over the next few months. The FTSE 100, as well as sterling, is muted as investors mull the implications.

Brazil's government has enacted a bigger spending freeze while opting for smaller tax breaks as it seeks to regain the nation's investment grade rating. Brazil's largest export markets are also urging the country to enact independent controls over its meat production, in response to the recent "Weak Flesh" scandal that plagued the $14B industry.

"Russia is reducing its oil production in stages, in accordance with the plans that we worked out voluntarily with our production companies," Energy Minister Alexander Novak said at the International Arctic Forum. Russian President Vladimir Putin and his Finnish and Icelandic counterparts will take the stage shortly, discussing their outlook for energy development in the Arctic.

Stocks

ConocoPhillips is selling oil sands and western Canadian natural gas assets to Cenovus Energy (NYSE:CVE) for C$17.7B, doubling the latter's production to 588,000 barrels of oil equivalent per day. It marks the latest international oil major to pull back from a region where high costs and low crude prices have made it hard to make an acceptable return. COP +5.2% premarket.

Expected to be the world's largest equity sale, Saudi Aramco (Private:ARMCO) has formally selected JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS) and HSBC as international financial advisers for its IPO. The trio joins Moelis and Evercore, which have been appointed independent financial advisers, and NCB and Samba Capital, which have been named local advisors.

Toshiba's most prized position is on the block after shareholders approved a proposal to split off its NAND flash memory unit. A sale will value the chip business at no less than ¥2T ($18B) and comes in the wake of mounting losses at U.S. nuclear unit Westinghouse. Toshiba (OTCPK:TOSYY) shares gained as much as 5.6% in Tokyo on the news.

Kicked out of Texas... Exxon Mobil's (NYSE:XOM) effort to stop the multi-state investigation into whether it fully disclosed the financial risks of climate change suffered a blow yesterday, as a U.S. district judge moved the case to New York. While the case involves "important issues," the alleged collusion at the center of the lawsuit took place at a United for Clean Power press conference in Manhattan.

Twenty-three people were hospitalized after a chemical leak at Kellogg (NYSE:K) headquarters, but none were believed to be seriously injured. "With Freon heavier than air, it's going to want to seek the lowest spot. So it started to go down to some of the lower floors which made us evacuate the rest of the north side of the building," said Battle Creek Fire Chief David Schmaltz.

Due to slumping sales and a shrinking customer base, Amazon (NASDAQ:AMZN) is shutting down its Quidsi unit, the parent company of sites like Diapers.com and Soap.com. "We have worked extremely hard for the past seven years to get Quidsi to be profitable and unfortunately we have not been able to do so," an Amazon spokeswoman declared. The restructuring will result in 263 layoffs.

NBCUniversal has reached an advertising deal with Snap (NYSE:SNAP) for the Winter Olympics that could be worth $50M-$75M, sources told WSJ. The two had partnered last year with a deal regarding highlights for the Rio Olympics, the first time NBC (NASDAQ:CMCSA) allowed Olympic video off its property. Strong bonds? NBC recently invested $500M in Snap's IPO.

"We deeply regret this mistake, which has cost all of us a tremendous amount," said Bill Ackman, "deeply and profoundly" apologizing for losing roughly $4B on a stake in Valeant Pharmaceuticals (NYSE:VRX). Nonetheless the board of Pershing Square (OTCPK:PSHZF) decided after a review of his performance that he should continue to manage the investments. The hedge fund has swung to losses of 2.5% so far in 2017.

Brussels expects to lure other financial players after convincing Lloyd's of London to make the city its post-Brexit European hub. "In the short term, there is no measurable impact of Brexit.... The whole point of the plan is that we can continue to operate in the EU from the customer, the insurer point of view basically seamlessly," said Chairman John Nelson.

Volkswagen will soon do what's been impossible since its emissions crisis began: sell diesel-powered cars in the U.S. The EPA just gave VW (OTCPK:VLKAY) dealers the green light to sell 2015 model year diesels after the automaker updated the vehicles' emissions software. It's a significant milestone in recovering from Dieselgate and rebuilding its relationship with environmental regulators.

Ford will announce production of a new engine in Ontario today, in an investment that would boost Canada's auto industry after years of job losses to Mexico and the United States. Sources said the 7X engine, for large pickup trucks, is part of the C$700M in new investments secured during a 2016 agreement between Ford (NYSE:F) and its 7,000 unionized Canadian workers.

Due to potentially faulty airbags, Toyota (NYSE:TM) is recalling a total of about 2.9M vehicles in Japan, China, Europe and other regions including its Corolla Axio sedan and RAV4 SUV crossover. The automaker said the latest call backs were part of a wider recall of Takata (OTCPK:TKTDY) inflators ordered by global transport authorities last year.

After a holdup last year tied to concerns over human rights, the Trump administration is pushing forward to sell nearly $5B in Lockheed Martin (NYSE:LMT) F-16s to Bahrain. The newest notice for the sale allows for 40 days of congressional review before a formal notice to the legislative body.

SpaceX hopes to make history today with the launch of the first large, liquid-fueled rocket powered by engines previously fired into space. The aim is to demonstrate the viability of the "flight-proven" hardware, which could usher in an era of frequent, inexpensive flights to orbit and beyond. The blastoff of the Falcon 9 (Private:SPACE) rocket is slated for 6:27 p.m. from the Kennedy Space Center.