Wednesday’s Market Prepper

Economy

Two of today's key reports - retail sales and the Consumer Price Index - may provide more clues than Janet Yellen about how soon the Fed could raise interest rates. The Chair testifies for a second day, this time before the House Financial Services Committee, following her comments on Tuesday that helped drive stocks to new highs. "Waiting too long for accommodation would be unwise," she said when pressed on rate hike timing. "I would say every meeting would be live."

With the water level at Lake Oroville dropping, Californian authorities have lifted a mandatory evacuation order, allowing residents to return to their homes near the reservoir's dam. But Butte County Sheriff Kory Honea warned the region to "maintain situational awareness." How much will it cost California to fully fix the dam? The Department of Water Resources estimates around $100M-$200M.

Shaping Middle East policy for the years ahead, President Trump will host Israeli Prime Minister Benjamin Netanyahu at the White House today in their first meeting since the inauguration. Likely items on the agenda: the war in Syria, the Iran nuclear deal, the Israeli-Palestinian conflict, settlement-building, moving the U.S. embassy to Jerusalem and whether a Palestinian state will ever emerge.

"We don't give back our own territory. Crimea is territory belonging to the Russian Federation," said Maria Zakharova, a spokeswoman for the Russian Foreign Ministry. It came as a response to yesterday's comments from White House press secretary Sean Spicer. "President Trump has made it very clear that he expects the Russian government to de-escalate violence in the Ukraine and return Crimea," he told a news briefing.

Turmoil in Washington over the resignation of Michael Flynn has overshadowed Defense Secretary Jim Mattis' trip to NATO headquarters. He's still expected to deliver a message declaring the Trump administration stands behind its allies, but believes Europe should step up its defense contributions. According to the latest figures, only five allies (Estonia, Greece, Poland, the U.K. and U.S.) met or exceeded the required 2% of GDP defense spending benchmark in 2016.

Stocks

Shares in Toshiba tumbled almost 9% overnight after the conglomerate said it would book a $6.3B hit to its U.S. nuclear unit. Facing a March 27 deadline to avoid a delisting, CEO Satoshi Tsunakawa said he would consider selling the entire memory chip division, a reversal of a previous plan to limit the sale to 20%. That would leave Toshiba (OTCPK:TOSYY) with few growth prospects, relying on public infrastructure projects, elevators and a struggling consumer electronics business.

SoftBank's Masayoshi Son, who has boasted of creating the "Berkshire Hathaway of tech," has thrown himself into the world of private equity and hedge funds with a $3.3B acquisition of Fortress Investment Group (NYSE:FIG). The deal comes as SoftBank (OTCPK:SFTBY) emerges as one of the world's largest investors with the imminent launch of its record-setting $100B technology fund. FIG climbed 27.2% in after-hours trading.

The Obamacare exodus continues... this time with a major health insurer. Humana (NYSE:HUM) said it will pull out of the Affordable Care Act marketplace in 2018, making the announcement after it ended a merger agreement with Aetna (NYSE:AET). President Trump said the decision was proof that "Obamacare continues to fail" and "will repeal, replace & save healthcare for ALL Americans."

Meanwhile, Cigna is looking to terminate its merger agreement with Anthem (NYSE:ANTM), seeking a $1.85B break-up fee and additional damages exceeding $13B. The suit comes in the wake of a federal court's decision blocking the planned $54B merger between the two insurers - a deal Cigna (NYSE:CI) argues is effectively dead. Wave good-bye to U.S. health insurer consolidation?

In its biggest year to date, the U.S. solar market nearly doubled its annual record, according to Greentech Media, topping out at 14,625 megawatts of solar PV installed in 2016. More records? For the first time ever, U.S. solar ranked as the number one source of new electric generating capacity, while growth of nonresidential installations surpassed residential solar for the first time since 2011. Related tickers: ASYS, AXTI, CSIQ, CSUN, CVV, DQ, EMKR, ENPH, FSLR, GEX, GLBL, HQCL, JASO, JKS, RGSE, SEDG, TSLA, SOL, SKYS, SPWR, TAN, TERP, TSL, VSLR, YGE

Due to problems with the output voltage, Toyota (NYSE:TM) is recalling all of its Mirai fuel cell vehicles. The automaker has about 2,800 of the zero-emissions cars on the road in Japan, the U.S., some markets in Europe and the UAE. Toyota dealers will update the fuel cell system software at no cost to the customer (the process will take about half an hour).

Pilots at American Airlines have denounced the carrier's chief executive, Doug Parker, citing his decision last week to skip a meeting with President Trump. The Allied Pilots Association issued a symbolic vote of "no-confidence" in his leadership abilities, and cited lagging pay increases and "questionable economic and strategic decisions." At the time, American (NASDAQ:AAL) said Parker would miss the meeting due to a previously scheduled event.

With more countries engaging in cyber attacks against each other, more civilians are being caught in the crossfire. That's why Microsoft (NASDAQ:MSFT) President Brad Smith is calling for a "Digital Geneva Convention." World governments would pledge not to hack the private sector or stockpile security vulnerabilities to steal user data, and promise to work with businesses to identify security threats when they occur.

Currently in charge of Today, Noah Oppenheim has been named the new president at NBC News (NASDAQ:CMCSA), replacing Deborah Turness. Alongside, NBC News is tapping into the international market with its purchase of a 25% holding in Euronews (to be renamed Euronews NBC). The network reaches 277M households across EMEA, but has a small viewership. NBC reportedly spent about $30M for its stake.

Facebook has announced a soon-to-come app that will allow users to stream videos in their news feed through set-top boxes such as Apple TV (NASDAQ:AAPL), Samsung Smart TV (OTC:SSNLF) and Amazon Fire TV (NASDAQ:AMZN). The move extends Mark Zuckerberg's effort to transform Facebook (NASDAQ:FB) into a "video-first" company and compete for TV ad dollars.

CEO Jack Dorsey bought $7M worth of TWTR shares this week, showing investors just how much confidence he has that Twitter can turn around its business. He tweeted about the stake on Valentine's Day, appropriately adding the hashtag "Love Twitter." The 426,000 shares ranged in price from $15.84 to $16.60.

Around the industry, it's known as getting "blanked," or getting a "goose egg," or "doughnut." Goldman Sachs (NYSE:GS) didn't pay any 2016 bonuses to about 100 investment bankers, according to Bloomberg, signaling that their services are best provided elsewhere. According to sources, the move is more draconian than in the past when underperformers still got a little something and the absolute number (100) is also larger than past years.

Investor moves: Procter & Gamble (NYSE:PG) +2.7% premarket after Nelson Peltz's Trian Fund Management took a $3.5B stake in the company. Warren Buffett's Berkshire Hathaway (BRK.A, BRK.B) sharply increased bets on airlines (LUV, DAL, AAL), Apple (AAPL) and Sirius XM (NASDAQ:SIRI) in Q4, while taking a stake in Monsanto (NYSE:MON). In another 13F filing, Carl Icahn listed increased holdings in Herbalife (NYSE:HLF) and Hertz (NYSE:HTZ), but exited his stake in Voltari (NASDAQ:VLTC).