January 12, 2018 Market Outlook

Earnings Bonanza from Banks Expected

Wall Street expects an earnings bonanza from the banking sector on Friday as JPMorgan (JPM) and Wells Fargo (WFC) prepares to report their respective fourth quarter earnings. Goldman Sachs (GS) was the first major bank to announce a profitable 2017 with the so-called “repatriation tax” as a contributing factor. BlackRock (BLK) is also due to report earnings before the opening bell.

December Retail Sales on the Spotlight

The market will find out on Friday if the retail trade sector did better than expected last month. The U.S. Census Bureau is set to report retail sales figures for December 2017. The month is regarded as critical for the industry because most of the holiday shopping in America happens in December.  Retail sales in November grew by 0.8% which is a bit of a break for the struggling retailers.

China’s Trade Surplus with U.S. Hits $275.81 Billion

According to data provided by Reuters, China’s trade surplus with the U.S. in 2017 reached $275.81 billion. The figure is a record high, eclipsing the previous record of $260.8 billion established in 2015. The surplus of the world’s second-largest economy last December was at $25.55 billion compared to November’s $27.87 billion in the same year.

The United States’ trade with China given that the latter’s economy runs surpluses against many of its trading partners. President Donald Trump has repetitively called for tougher action on what he calls unfair practices that have led the country to a huge trade deficit with China.

Oil Prices on Track for Four Straight Weeks of Gain

Although traders and analysts warned of possible price correction in 2018, the overall market condition is strong that oil prices continue to hold sway. On Friday, oil prices eased from three-year highs but remained on track to end the week higher for a fourth week in a row.

U.S. West Texas Intermediate (WTI) crude futures CLc1 went down by 35 cents  to $63.45 a barrel. It came from Thursday’s at $64.77 which is the strongest since late 2014. Brent crude futures LCOc1 likewise hit a high on Thursday, breaking above $70 a barrel for the first time since December 2014.  Most investors are still upbeat and positioned to benefit from further price gains.

GM Plans to Offer Unique Self-Driving Cruise AV Car

General Motors Co. (GM) is planning to introduce the “no pedal to the metal” self-driving Cruise AV car. The U.S. automaker is seeking government approval for a fully autonomous car – one without a steering wheel, brake pedal or accelerator pedal – to enter the automaker’s first commercial ride-sharing fleet in 2019.

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