US stock futures trade lower as China’s growth slows

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When will the partial government shutdown begin to weigh on the markets?

Crossmark Global Investments’ Victoria Fernandez on the state of the markets, the outlook for Federal Reserve policy and the potential market and economic impact of the partial government shutdown.

Equity futures are indicating a lower open when the markets resume on Tuesday on concerns about China’s growth.

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U.S. markets are closed on Monday for the Dr. Martin Luther King Jr. Holiday.

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    Equity futures are trading in a shortened electronic session.The Dow Jones Industrial Average futures were lower Monday by 0.4 percent. The SP 500 slipped 0.4 percent and the Nasdaq Composite was off 0.5 percent.

    China’s 2018 growth slowed to the lowest in nearly three decades, which puts pressure on Beijing to add more stimulus.

    The economy cooled in the fourth quarter under pressure from lower domestic demand and the U.S. tariffs on Chinese goods.

    Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 percent on-year as expected from 6.5 percent in the third quarter, the National Bureau of Statistics said on Monday.

    That pulled full-year growth down to 6.6 percent, the slowest annual pace since 1990.

    In Asian markets on Monday, China’s Shanghai Composite ended the day 0.6 percent higher on hopes the government will added more stimulus to boost growth.

    Hong Kong’s Hang Seng also shrugged off the data to finished the day up 0.4 percent.

    Japan’s Nikkei rose to more than a one-month high, adding 0.3 percent on the day.

    In Europe, stocks closed out the day lower.  London’s FTSE traded off by 0.1 percent, Germany’s DAX was down 0.7 percent and France’s CAC slipped 0.3 percent.

    Earnings season kicks into high gear this week, with six Dow companies and 56 members of the SP 500 posting their October-through-December results. Among the big names we’ll hear from are IBM, Ford, Comcast, United Technologies and Intel.

    U.S. stocks closed higher Friday — their fourth consecutive weekly gain — after China reportedly offered to increase its imports from America over a six-year-period to reduce the trade imbalance between the two nations.

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    Equities also got a lift from a Wall Street Journal report that the Trump administration was considering rolling back tariffs on Chinese goods to ensure that current trade negotiations – set to end March 1 – are successful.

    All three major equity averages have now climbed at least 10 percent since they bottomed on Christmas Eve. All three indexes have now notched their biggest four-week gain since 2011.

    Companies consider IPO workaround as shutdown drags on

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    Will the partial government shutdown delay IPOs in 2019?

    PwC Partner and Head of Financial Services Neil Dhar on the potential impact of the partial government shutdown on the IPO market.

    Some companies looking to go public this year are contemplating a workaround as the partial government shutdown drags on into its fourth week.

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    At least two biotech companies are weighing alternative options while the SEC remains largely closed, people familiar with the matter told The Wall Street Journal this week.

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      During the IPO process, companies typically have regular exchanges with the SEC, which ultimately gives them the greenlight to move forward. However, there is another legal option that would allow businesses to bypass some parts of the standard process, pick a price and then move directly to market at that price 20 days later.

      While the method is legal, it could invite increased risk as it’s difficult to predict how the market will act during those 20 days. Normally, companies are priced the day before a listing. Also, as noted by the Journal, it raises concerns the companies could be more susceptible to regulatory, or other, challenges later on.

      A number of companies are rumored to be considering an IPO in 2019, including ride-sharing companies Uber and Lyft, workplace messaging company Slack and apartment marketplace Airbnb.

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      For businesses that are looking to go public in early 2019, the deadline to do so is typically mid-February, according to the Journal, since it allows them to use financial results through the third quarter of 2018.

      The partial government shutdown – the longest in U.S. history – has entered its fourth week, affecting hundreds of millions of workers. The political infighting was triggered by a disagreement over funding for a wall along the country’s southern border. Over the weekend, the president appeared to offer Democrats an olive branch in the form of temporary protection for some undocumented immigrants in exchange for the $5.7 billion he wants to build the wall. House Speaker Nancy Pelosi, D-Calif., however, did not bite on the offer.

      Oil rises as investors latch on to OPEC cuts, supply outlook

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      Oil market braces for cold

      PRICE Futures Group’s Phil Flynn on the impact of the bitter cold weather on energy prices.

      Oil prices rose on Monday, reversing earlier losses, as investors latched on to positive supply-side drivers for the market, although concern about the wider economy simmered in the background after data pointed to a slowdown in China.

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      Brent crude oil futures were up 12 cents at $62.82 a barrel by 1520 GMT, while U.S. crude futures were up 9 cents at $53.89 a barrel.

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        Analysts said a more robust backdrop for financial markets, together with the prospect of slower crude production growth, were the major drivers behind the rally in oil.

        “The stock market performance is one of the reasons why oil keeps marching higher. There also seems to be a general belief that the agreed cut in OPEC+ production will be sufficient to balance the market,” PVM Oil Associates said in a note.

        Global equities fell after data pointed to a slowdown in Chinese economic growth in 2018 to a 28-year low. The numbers fed concern that the outlook for global growth may be darkening, particularly given U.S.-China trade tensions.

        But stocks are still up nearly 8 percent so far this month, which in turn has given oil investors more confidence to bet aggressively on a rise in crude prices.

        “It remains quite likely that the trade spat with the U.S. has played a part in this latest slowdown,” CMC Markets chief market analyst Michael Hewson said.

        “But investors should also factor in that it simply isn’t possible for the Chinese economy to grow at the pace that it has over the last 10 years, in the next 10 years.”

        While there is concern that a slowing global economy could impact oil demand, production cuts implemented by the Organization of the Petroleum Exporting Countries are likely to support crude oil prices, analysts said.

        “You can’t justify oil prices at these levels. We’re looking basically at an average of almost $70 a barrel for Brent in 2019,” ING commodities strategist Warren Patterson said.

        “I am getting increasingly concerned about how tight the market will be going into 2020.”

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        A separate report from China’s National Bureau of Statistics on Monday showed crude oil refinery throughput in 2018 climbed to a record 12.1 million barrels per day (bpd), up 6.8 percent from the previous year.

        In the United States, energy companies cut the number of rigs drilling for oil by 21 in the week to Jan. 18, taking the count down to 852, the lowest since May 2018, energy services firm Baker Hughes said on Friday.

        (Additional reporting by Henning Gloystein in SINGAPORE; Editing by Dale Hudson and Louise Heavens)

        EU fines Mastercard $648M over cross-border barriers

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        The European Commission said on Tuesday it had fined Mastercard 570.6 million euros ($648.3 million) for limiting the possibility for merchants to benefit from better conditions offered by banks elsewhere in the European Union.

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        “By preventing merchants from shopping around for better conditions offered by banks in other member states, Mastercard’s rules artificially raised the costs of card payments, harming consumers and retailers in the EU,” European Competition Commissioner Margrethe Vestager said in a statement.

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          The Commission granted Mastercard a 10 percent fine reduction for cooperating with its investigation.

          The fine is the latest in a series of actions over the past decade that the Commission, acting as the antitrust regulator for the 28-member European Union, has taken to reduce card fees for merchants.

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          It has, for example, taken decisions to make legally binding commitments by Visa Europe to cap the levels of interchange fees for all debit and credit card transactions within the European Economic Area.

          It has also looked into the fees charged on card payments made by tourists visiting the European Union.

          ($1 = 0.8801 euros)

          (Reporting by Philip Blenkinsop)

          Stocks trade lower on IMF global growth outlook

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          It is conceivable that the Fed needs to ease in another year or so, Ray Dalio says

          Bridgewater Associates founder Ray Dalio on the outlook for Federal Reserve, concerns over U.S. debt and the current market environment facing investors.

          U.S.stocks are trading  lower as markets return to trading amid worries about global economic growth and concern about Brexit.

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          The IMF predicted the global economy to grow at 3.5 percent in 2019 and 3.6 percent in 2020, down 0.2 and 0.1 percentage point, respectively, from last October’s forecasts.

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            Markets were closed Tuesday for the Dr. Martin Luther King Jr. Holiday.

            All three major indexes are trading lower.

            Johnson Johnson on Tuesday forecast 2019 sales that fell short of analysts’ estimates after reporting better-than-expected fourth-quarter profit and revenue.

            The company said it expects 2019 sales in the range of $80.4 billion to $81.2 billion, compared with the average analyst estimate of $82.69 billion, according to IBES data from Refinitiv.

            Arconic Inc shares slumped more than 20 percent after the aluminum products maker said it was no longer pursuing a sale.

            Also on Monday, China’s 2018 growth slowed to the lowest in nearly three decades, which puts pressure on Beijing to add more stimulus.

            The economy cooled in the fourth quarter under pressure from lower domestic demand and the U.S. tariffs on Chinese goods.

            Fourth-quarter gross domestic product (GDP) grew at the slowest pace since the global financial crisis, easing to 6.4 percent on-year as expected from 6.5 percent in the third quarter, the National Bureau of Statistics said on Monday.

            That pulled full-year growth down to 6.6 percent, the slowest annual pace since 1990.

            In Asian markets on Tuesday, China’s Shanghai Composite ended the day  1.2 percent lower.

            Hong Kong’s Hang Seng ended the session down 0.7 percent.

            Japan’s Nikkei closed down 0.5 percent on the day.

            In Europe, London’s FTSE traded lower by 0.8 percent, Germany’s DAX slipped 0.6 percent and France’s CAC was off 0.6 percent.

            U.S. stocks closed higher Friday — their fourth consecutive weekly gain — after China reportedly offered to increase its imports from America over a six-year-period to reduce the trade imbalance between the two nations.

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            Equities also got a lift from a Wall Street Journal report that the Trump administration was considering rolling back tariffs on Chinese goods to ensure that current trade negotiations – set to end March 1 – are successful.

            Netflix shares fall on mixed quarterly results

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            Netflix shares fall after Q4 revenue miss

            FBN’s Deirdre Bolton reports on Netflix’s fourth-quarter earnings.

            Netflix shares fell in after-hours trading on Thursday after the streaming giant reported mixed quarterly results, missing on quarterly revenue but topping expectations for subscriber additions and earnings.

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            The company posted fourth quarter revenue of $4.19 billion, slightly below Wall Street’s expectation of $4.21 billion. Quarterly earnings per share of 30 cents outpaced the Street’s projection of 24 cents, according to Refinitiv data. Wall Street also eyed a drop in the fourth quarter operating margin to 5.2 percent vs. 7.5 percent last year, citing the release of “so many titles launching in the quarter” as noted in the earnings release.

            Free cash flow was negative $1.3 billion for the quarter as Netflix ramps up investments in original content.

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              Netflix added 8.84 million global paid subscribers in the fourth quarter, including 1.5 million in the U.S. market and 7.31 million in the international market. Those figures topped Wall Street’s expectations and the company’s own expectations. The company now has 139 million global subscribers.

              For the first quarter of 2019, Netflix provided a quarterly revenue forecast of $4.49 billion. The company’s projected addition of 8.9 million global subscribers in the first quarter surpassed Wall Street’s projection.

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              The earnings report came days after Netflix announced its largest price hike ever. The company’s most popular plan will cost $13 per month, up from $11.

              Tesla to cut workforce by 7 percent

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              Tesla cutting seven percent of its workforce as part of effort to lower the price of Model 3

              Synovus Trust Portfolio Manager Dan Morgan on the outlook for Tesla and the tech sector.

              Tesla is swinging the job axe in an attempt to trim costs.

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              The electric automaker is cutting several thousand  jobs, while it ramps up the production of its crucial Model 3 sedan.

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                Tesla shares fell 5 percent in premarket trading

                “Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Chief Executive Officer Elon Musk said in an email to employees that was published on the company’s blog.

                “There isn’t any other way,” he said.

                The company said it would reduce full-time employee headcount by about 7 percent and retain only the most critical temps and contractors, according to Reuters.

                Tesla cut U.S. prices for all its vehicles as the new year began to offset lower green tax credits.

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                The automakers also fell short on quarterly deliveries of its mass-market Model 3 sedan.

                Musk said the company is on target to report a GAAP profit in its fourth quarter, but less than the previous three-month period.

                CVS, Walmart reach new agreement for pharmacy network

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                Walmart reports 3Q revenue miss

                WSJ Assistant Editorial Page Editor James Freeman and FBN’s Maria Bartiromo and Deirdre Bolton break down Walmart’s third-quarter results.

                CVS Health and Walmart said on Friday the world’s largest retailer would remain part ofCVS’s network for commercial and Medicaid pharmacy customers, breaking a contract impasse CVS disclosed earlier this week.

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                Financial terms of the new contract were not disclosed.

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                  On Tuesday, CVS said the companies had failed to agree on pricing and that Walmart was leaving the pharmacy network for the prescription drug plans that CVS manages for companies and health insurers and for the Medicaid program for low income people.

                  The companies said on Tuesday they were still in discussions.

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                  In addition to its retail pharmacies and stores, CVS is one of the country’s biggest pharmacy benefit managers and, after buying Aetna, one of its top health insurance companies. Its prescription plans for the Medicare population were unaffected by the contract dispute as was its Sam’s Club agreements.

                  Walmart senior vice president Sean Slovenski described the terms as “fair and equitable” in a press release.

                  (Reporting by Caroline Humer in New York and Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta and Chizu Nomiyama)

                  Tiffany holiday sales fall as Chinese tourists spend less

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                  Tiffany shares soar to all-time high

                  Capital Wave Forecast Editor Shah Gilani, Ladenburg Thalmann Asset Management President Phil Blancato and FoxNews.com columnist Liz Peek discuss what caused Tiffany’s booming sales.

                  Tiffany  Co tempered its yearly profit forecast on Friday after its holiday sales fell unexpectedly as Chinese tourists spent less globally and the U.S. luxury jeweler faced softer demand in Europe and at home.

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                  Like other firms which sell luxury products, Tiffany relies on demand from China’s burgeoning middle class as consumer demand for its rings, pendants and bracelets remains subdued in the United States and Europe.

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                    During the crucial November-December period, Tiffany’s worldwide same-store sales fell 2 percent while net sales dipped 1 percent, against its expectations of modest increases.

                    In a statement, Tiffany Chief Executive Alessandro Bogliolo blamed softer spending globally by foreign tourists, primarily Chinese, and external uncertainties which may have hit customer demand in Europe and the Americas region.

                    “Overall holiday sales results came in short of our expectations,” Bogliolo said in a statement.

                    Shares of Tiffany, which have fallen 22 percent in the past 12 months, slipped almost 1 percent in early trading following the news.

                    A slowdown in spending by Chinese tourists had also led Tiffany to shy away from raising its yearly profit targets in November.

                    However, customer demand at Tiffany stores in mainland China remained strong during the holiday season, the company said.

                    The New York-based jeweler’s underwhelming holiday period results mirror similar reports from other retailers. Macy’s, Kohls and other retailers reported disappointing results even as overall shopping during the 2018 U.S. holiday season reached a six-year high.

                    Smaller U.S.-based jeweler Signet on Thursday also reported lower holiday period sales and slashed its full-year profit forecast, driving its shares more than 20 percent lower.

                    Tiffany now expects full-year earnings around the lower end of its estimated range of between $4.65 and $4.80 per share.

                    The jeweler, known for its engagement rings and Robin’s Egg Blue Boxes, said holiday sales of engagement and designer jewelry fell 3 percent and 8 percent, respectively.

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                    Annual sales should rise 6 to 7 percent, the company said. It had earlier estimated growth in the high single percentage digits.

                    For the year ending January 2020, Tiffany expects earnings per share to rise in the mid-single digits and net sales to grow in low-single digits.

                    (Reporting by Nivedita Balu and Aishwarya Venugopal in Bengaluru; Editing by James Emmanuel and Sai Sachin Ravikumar)

                    Stocks close sharply higher, 4th straight week of gains

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                    Stocks a buy despite trade tensions, partial government shutdown headlines?

                    MAXfunds.com co-founder Jonas Ferris on the outlook for stocks and concerns of a potential recession.

                    U.S. stocks closed higher Friday — their fourth consecutive weekly gain — after China reportedly offered to increase its imports from America over a six-year-period to reduce the trade imbalance between the two nations.

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                    Equities also got a lift from a Wall Street Journal report that the Trump administration was considering rolling back tariffs on Chinese goods to ensure that current trade negotiations – set to end March 1 – are successful.

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                      Meanwhile, China’s top trade negotiator, Liu He, is expected to travel to the U.S. later this month for the negotiations.

                      Bloomberg reported that China had offered to ramp up U.S. imports in order to reshape relations between the two countries. This came on the heels of another report that said the U.S. may ease tariffs imposed on some Chinese imports.

                      Global oil prices surged after oil cartel OPEC reported its biggest monthly production in nearly two years. That helped lift shares of oil services giant Schlumberger, which depends on capital investments by petroleum exploration and production companies. Other oil stocks also rose.

                      John Williams, president of the New York Federal Reserve and a voting member of the central bank’s powerful rate-setting committee, said the Fed would be guided by economic data in its decision about when or if to raise interest rates.

                      The net effect of the trade news and oil prices was a boost in investor sentiment.

                      All three major equity averages have now climbed at least 10 percent since they bottomed on Christmas Eve. All three indexes have now notched their biggest four-week gain since 2011.

                      U.S. stock markets will be closed on Monday, Jan. 21, for the Dr. Martin Luther King Jr. holiday.

                      Among the most active were shares of Tesla, which fell after announcing jobs cuts in an effort to reduce the cost of the Model 3 sedan.

                      Netflix also declined after reporting lower-than-expected quarterly sales and gave downbeat revenue targets for the current quarter.

                      CVS Health rose after settling its disagreement with Walmart and reached a deal on a new pharmacy network.

                      In Asian markets on Friday, China’s Shanghai ended the session up 1.4 percent and 1.7 percent for the week, a third straight week of gains.

                      Hong Kong’s Hang Seng finished the day 1.3 percent higher and  1.6 percent higher for the week.

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                      Japan’s Nikkei  average ended the day 1.3 percent higher and up 1.5 percent for the week.

                      European markets finished the day higher. London’s FTSE added 2 percent and 0.7 percent for the week, Germany’s DAX rose 2.6 percent and 2.9 percent for the week, France’s CAC gained  1.7 percent and 2 percent for the week.

                      FOX Business’ Ken Martin contributed to this report.