Five Things You Need to Know to Start Your Day

(Bloomberg) --

Trump has a stick and a carrot for China, huge day for earnings, and euro-area GDP disappoints. Here are some of the things people in markets are talking about today.

Great deal, but...

The U.S. is preparing to announce tariffs on all remaining imports from China by early December, should talks next month between President Donald Trump and Xi Jinping fail to deliver on trade, according to three people familiar with the matter. Trump said late yesterday he thought the U.S. could make a “great deal” with China, adding the caveat that “it has to be a great deal as they have drained our country.” Policy makers in Beijing continue to try to cushion the country from the trade war fall out with tax cuts, regulatory relief and investment incentives as they try to avoid the debt-financed stimulus of the past. The People’s Bank of China weakened its daily reference rate for the yuan to the lowest in more than a decade.

Earnings

A huge day for earnings got off to a good start with blow-out numbers from BP Plc and a 4 percent rally in the company’s stock. General Electric Co., Fiat Chrysler Automobiles NV, The Coca-Cola Co., and Pfizer Inc. all report. However, it’s likely to be the tech giants that grab the headlines. After the bell, Facebook Inc. is expected to post a 34 percent increase in third-quarter revenue to $13.8 billion in what would be a respite following a difficult quarter for the company. Apple Inc. is having a product launch in Brooklyn later. 

GDP

Euro-area growth missed expectations in the third-quarter, expanding 0.2 percent, below predictions and the weakest level in four years. On a national level, there was disappointment for Italy’s populist government when the economy failed to expand at all in the third quarter. There was better news for France, which saw economic growth of 0.4 percent in the three months to September, driven largely by the strongest consumer performance in a year. 

Markets mixed

Overnight the MSCI Asia Pacific Index climbed 0.5 percent while Japan’s Topix index closed 1.4 percent higher amid positive earnings and optimism on China car tax cuts. In Europe, the Stoxx 600 reversed earlier gains to trade 0.1 percent lower by 5:50 a.m. Eastern Time amid mixed corporate results. S&P 500 futures pointed to little change at the open, the 10-year Treasury yield was at 3.119 percent and gold was lower. 

Coming up…

While all eyes might be on earnings today, there are some other things worth watching. At 10:00 a.m. U.S. consumer confidence for October is published, with expectations for a decline to 135.9. At the same time, Mexico reports GDP for the third quarter. On the campaign trail, Axios reports that Trump is planning to sign an executive order that will end birthright citizenship

What we've been reading

This is what's caught our eye over the last 24 hours.

©2018 Bloomberg L.P.