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U.S. STOCKS MIXED DESPITE TECH REBOUND

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US FINANCIAL MARKET
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DAILY MARKET REPORTS

  • Shares of technology firms rose after suffering losses on Monday.
  • The Senate approved its version of tax code overhaul in a 51-49 vote over the weekend.
  • Talks will begin likely next week between the Senate and the House, which had approved its own version of the legislation.
  • AutoZone shares climbed 6.4% after the auto parts retailer’s quarterly revenue and profit topped estimates.
  • Toll Brothers shares slid about 10% after the company’s quarterly profit and revenue missed estimates and it forecast a decrease in full-year 2018 adjusted gross margin.

US FINANCIAL MARKET

Global Earnings Hit a Record High, Giving Market Rally Momentum

  • Listed companies are at their most profitable on record after a bumper year of earnings growth across global equity markets.
  • The earnings-per-share of a FactSet index of over 20,000 listed companies from around the world has now reached an average of $9.69, increasing nearly 19% in the last year.
  • That is the fastest year-over-year rise since 2011, surpassing the late-2014 high of $9.55.
  • International trade growth is also expected to outstrip gains in global gross domestic product this year, with the IMF expecting a 4% increase, up from 2.4% in 2016.

Disney’s bid for Fox assets gains momentum

  • Walt Disney is in the lead to acquire much of Twenty-First Century Fox’s media empire, though rival suitor Comcast remains in contention.
  • The Murdoch family, which controls Fox, prefers a deal with Disney because it would rather be paid in Disney than Comcast stock, and expects a potential deal with Disney to be cleared by U.S. antitrust regulators more easily.
  • CNBC had reported earlier on Tuesday that a deal for Disney to buy Fox’s movie studio and television production assets for more than $60 billion could come as early as next week.

AutoZone earnings beat estimates

  • AutoZone logged revenues increases 4.9% to $59 billion.
  • Net income for the quarter increased 1.0% over the same period last year to $281.0 million.
  • Domestic same store sales, or sales for stores open at least one year, increased 2.3% for the quarter.
  • AutoZone is the leading retailer and a leading distributor of automotive replacement parts and accessories in the United States.

Toll Brothers profit misses on lower-than-estimated home prices

  • S. luxury homebuilder Toll Brothers’ quarterly profit and revenue missed analysts’ expectations.
  • Orders, a key metric of future revenue for homebuilders, rose 14.5 percent to 1,979 homes in the three months ended Oct. 31.
  • The company’s net income rose to $9 million in the quarter, from $114.4 million a year earlier.
  • Revenue rose 9.3 percent to $2.03 billion.

Cineworld buying Regal for $3.6 billion to reach into U.S. movie-theater market

  • British movie theater operator Cineworld Group has agreed to buy American counterpart Regal Entertainment for $3.6 billion.
  • The deal would give it a meaningful footprint in the U.S.–the biggest box office market–and create a company with more than 9,000 screens.
  • AMC, part of China’s Dalian Wanda Group, last year bought Odeon & UCI Cinemas Group in Europe, and ran or had interests in more than 11,000 screens in 1,006 theaters as of Sept. 30, according to regulatory filings.

Marriott signs co-brand credit card deal with JPMorgan, AmEx

  • The deal is to issue co-branded credit cards associated with its loyalty programs.
  • The deal covers the Marriott Rewards and Ritz-Carlton Rewards Visa credit cards from JPMorgan, and the Starwood Preferred Guest cards from American Express.
  • It will reveal additional details about the cards in 2018.

iPhone market share slips in October-quarter: research firm

  • The unavailability of the iPhone X during the three months ended October pulled down the market share for Apple’s iPhones in some key regions.
  • The market share for Apple’s iPhones, as measured by sales of its iOS mobile operating system, declined to 32.9 percent in the United States, from 40.6 percent a year ago.
  • Android’s market share rose to 66.2 percent in the United States from 58 percent a year ago.
  • Urban China was a bright spot for Apple as iOS market share edged up 0.5 percentage points to 17.4 percent. Android’s share fell slightly to 82.3 percent.

Mastercard to repurchase up to $4 billion of its shares

  • The new share repurchase program will be effective at the completion of the company’s previously announced $4 billion share repurchase program, Mastercard said.
  • Under the previously announced buyback, the company has about $1.5 billion remaining, the statement added.

McDonald’s new ‘dollar’ menu to intensify price war in 2018

  • McDonald’s said on Monday it would introduce new menus with $1, $2 and $3 items in early January as restaurants battle to win U.S. customers who have come to expect deals on fast food.
  • McDonald’s is in a price war with rivals ranging from Yum Brands’ Taco Bell to Dunkin’ Brands Group.

Bank of America shares rise after adding $5 billion to buyback

  • Bank of America announces additional share repurchase of $5 billion.
  • That’s on top of a larger, $12 billion repurchase announced earlier this year; both buyback plans are set to last through June 2018.

Wells Fargo’s Sloan says customer activity at bank has momentum and tax bill will add to that

  • Wells Fargo customer activity has “reasonable momentum” already and tax reform could boost that even more.
  • The bank is still targeting $4 billion in annual cost savings by the end of 2019.

Apple launched an iPhone X that’s not tied to a wireless carrier last night

  • Apple is now selling an unlocked SIM-free iPhone X on its website.
  • The unlocked SIM-free model can be used on the carrier of your choice, so long as the iPhone is supported.
  • The unlocked SIM-free iPhone X is ideal for business travelers who don’t stick to one carrier.

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US ECONOMY & POLITIC

U.S. trade deficit scales nine-month high; oil prices lift imports

  • The Commerce Department said on Tuesday the trade gap widened 6 percent to $48.7 billion.
  • Imports of goods and services increased 6 percent to a record $244.6 billion in October.
  • Exports of goods and services were unchanged at $195.9 billion in October.
  • Exports to China hit their highest level since December 2013, while those to Mexico were the highest in three years.

U.S. Service Sector Remains Strong After Slower Expansion in November

  • Institute for Supply Management reports its index of nonmanufacturing activity fell 2.7 percentage points to 57.4.
  • The ISM said new orders fell 4.1 points to 58.7. Employment growth and a measure of exports also slipped.
  •  A reading above 50 for the index indicates expansion in the service sector, and a reading below 50 signals contraction.

Senate Panel Advances Powell’s Nomination to Be Next Fed Chairman

  • Senate Banking Committee votes 22-1 to back Jerome Powell’s nomination.
  • Mr. Powell’s nomination now will advance to the Senate floor for a full vote on a date to be determined.

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EUROPE & WORLD

Euro-Area Growth Heads for Strong Finale in Year of Uncertainty

  • Composite PMI rises to 5 in November from 56.0 in October.
  • IHS Markit sees economy heading into 2018 on solid footing.
  • Euro-area economic momentum accelerated to its fastest pace in over six years in November.

BMW expects jump in electric car sales in 2018

  • Sales in 2018 will exceed a 2017 sales target of 100,000 vehicles by a medium double-digit percentage.
  • In the first 10 months of 2017, BMW sold 78,100 electric cars and plug-in hybrids.
  • BMW is gearing up to mass produce electric cars by 2020 and aims to have 12 different models by 2025.

Japan Airlines invests $10 million in supersonic jet company Boom

  • Denver-based startup Boom Supersonic has won a $10 million investment from Japan Airlines.
  • Boom has 76 pre-orders for a 55-seat plane that it says will be able to slash the flight time from New York to London in just three hours and fifteen minutes.

Apple wins EU trademark case against Xiaomi

  • Apple succeeded on Tuesday in preventing Chinese smartphone maker Xiaomi from registering its “Mi Pad” tablet computer as an EU trademark because the name was too similar to Apple’s “iPad”.

Nissan’s Robo-Taxis Will Hit the Road in March

  • Nissan will start testing robo-taxis on Japanese streets in March, the first step in rolling out a self-driving taxi service, as Japan’s top car makers struggle to keep pace with Detroit and Silicon Valley.
  • Nissan is ahead of the other major Japanese auto makers in offering a self-driving taxi service. But its plan to introduce the service by the early 2020s puts it behind some other car makers.

Alibaba’s Jack Ma Tells U.S. Companies to Stop Whining About China

  • Companies that struggle here may simply not be taking the right approach, Mr. Ma said Tuesday at a prominent internet forum.
  • “I gave advice to Jeff Bezos 10 years ago,” Mr. Ma said, referring to Amazon.com Inc.’s chief executive. “I said: ‘Please send people with entrepreneurial spirit, not professional management. Because wherever you go, doing business in another country is very difficult.’”
  • “Give me five examples of Chinese companies that succeed in America,” he said. “Or Asian companies that succeed in America. Because it’s not easy to do business across nations, it takes time.

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TODAY in HISTORY

  • The first scholastic fraternity in America, Phi Beta Kappa, was organized at the College of William and Mary in Williamsburg, Va. (1776)
  • President Polk triggered the Gold Rush of 1848 by confirming that gold had been discovered in California. (1848)
  • The 21st Amendment to the Constitution, repealing prohibition, was ratified. (1933)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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