- S&P 500 Rally Pauses as Tumbling Bond, Oil Prices Break Momentum. U.S. equities ended their longest streak of weekly gains in more than a year as slumping oil prices dragged down energy stocks and a selloff in bonds weighed on companies that benefit from investors seeking regular income. Signs of strong growth in the economy weren’t enough to propel stocks higher this week as investors weighed the impact of a potential interest-rate increase by the Federal Reserve next Wednesday. Futures traders now see a hike as a sure thing. With the first-quarter earnings season almost over, stocks lost the boost provided by profits that on average beat Wall Street expectations. The S&P 500 slipped 0.4 percent to 2,372.60 in its first weekly decline since the period ended Jan. 20. The Dow Jones industrial average lost 0.5 percent to 20,902.98. Small-cap stocks in the Russell 2000 Index declined for the third straight week, falling 2.1 percent for the biggest drop this year.
- May Urged to Prepare for `Real' Risk of a No-Deal Brexit. U.K. Prime Minister Theresa May must plan for the “real possibility” that she emerges from two years of Brexit negotiations without a deal, according to a panel of lawmakers. May has warned she is prepared to take Britain out of the European Union with no agreement rather than accept a bad one. That could happen and it would be a “dereliction of duty” not to plan for the consequences, the House of Commons Foreign Affairs Committee said in a report on Sunday.
- Merkel to Warn Trump That U.S. Tax Changes May Spark Retaliation. German Chancellor Angela Merkel will warn U.S. President Donald Trump that a proposed tax overhaul could spark retaliatory measures, including higher tariffs for American companies, according to Der Spiegel magazine. The German government is reviewing its responses to a border-adjustment tax, which would only tax U.S. corporations’ imports and not their exports. Documents for Merkel’s upcoming meeting with Trump cited by Spiegel label the measure a “protective tariff” and say it violates World Trade Organization rules. Responses from Europe’s largest economy could include incrementally higher duties on imports from America and allowing German companies to make their U.S. import tax deductible, thus compensating their competitive disadvantage, according to the report. Eventually, Germany could also lower corporate taxes and social contributions, making itself more attractive to international companies.
- China Trade Minister Looks Forward to Meeting 'Excellent' Ross. China’s new Commerce Minister Zhong Shan said he looks forward to meeting his “excellent” U.S. counterpart Wilbur Ross for a shared mission of increasing cooperation and managing differences between the world’s largest economies. “I noticed that Mr. Ross used to be an excellent entrepreneur, a good negotiator and, I can say, he’s very excellent,” Zhong said at his first press conference as trade minister on Saturday in Beijing. “I’m willing to deal with excellent people, because excellent people are good at thinking strategically for the long term.”
- Turkey's Erdogan Calls Dutch `Fascists' After Minister Grounded. Turkish President Recep Tayyip Erdogan called the Dutch “fascists” after the government of the Netherlands blocked his foreign minister from attending a political rally in the country out of fear of public disorder. Landing rights for the flight of Turkish Foreign Minister Mevlut Cavusoglu were withdrawn, the Dutch Foreign Ministry said Saturday in a statement. The government acted after an invitation to Turks to “participate in a public meeting” with Cavusoglu in Rotterdam put “public order and safety in jeopardy.”
Wall Street Journal
- We Shouldn’t Always Have Paris. The case for pulling out of Obama’s global climate accord.
- GOP Health Plan Risks Backlash From Seniors. Lawmakers are divided over bill’s impact on older people; Democrats see opening.
- Had bullish commentary on (BX), (BLL), (ANET) and (NCLH).
- Had bearish commentary on (SNAP).
- Restaurant Sales And Traffic Tumble. (graph)
- Weekend Reading: All Eyes On The Fed. (graph)
- TRUMP: 2017 was the year Obamacare was 'meant to explode, because Obama won't be here'. Trump's comments echo many prominent Republicans who have said the ACA is "collapsing" or in a "death spiral." Obamacare critics have suggested that the law was intentionally designed to fail to allow Democrats to pass a single-payer healthcare system.
- Iran Oil Minister Says OPEC Happy With $55-$60/Bbl Crude. Most OPEC members see group's long-term interests best served with "reasonably low prices," citing interview with Oil Minister Bijan Namdar Zanganeh. OPEC produces cheapest oil in the world at $8/bbl, while competitor costs reach $48/bbl. OPEC market share fell to 30% from 50% in past 3 decades because high oil prices worked against the group.