If you’re itching to talk about anything besides a trade war, then good luck. Discussions about how it could ugly up, with China the likely next target, are alive and well.
Take Danske Bank, which has come up with a top 10 list of ways Beijing could retaliate against U.S. tariffs. It notes that the Middle Kingdom has a monopoly on the rare earth minerals used in mobile phones and LED displays — whose prices spiked in 2011 when China imposed export quotas.
Let’s hope Apple AAPL, -0.85% and the like have backup warehouses full of the stuff somewhere, in case things really heat up.
Where those worries have some moving carefully, our call of the day from Sam Stovall takes a more “damn the torpedoes” view. The chief investment strategist of CFRA reveals the investment research firm just voted to lift its 12-month target for the S&P 500 SPX, -0.57% — to 3,000, from 2,800.
Stovall and co. note the S&P 500’s earnings per share are expected to grow 18.8% in 2018, up from an 11.4% rise last year, while core inflation ought to stay subdued.
“Despite the elevated volatility anticipated as a result of uncertainties surrounding global trade tensions and the November mid-term elections, we still think share prices will be propelled by organic economic growth, tax reform, share repurchases and a soft U.S. dollar,” he writes.
Plus, there’s a lack of a “lack of attractive alternatives in this rate-tightening environment,” Stovall argues — which should mean more love for stocks.
That CFRA call isn’t that out there, going by J.P. Morgan’s JPM, -1.12% report of feedback from a recent investor conference: More than 50% expect the S&P 500 to range 2,750 to 3,000 this year, while another 20% see 3,000 to 3,250.
Another takeaway from that conference — stay short the dollar against the euro, yen and Swiss franc — echoes Stovall’s view that there’s softness ahead for the greenback.
Key market gauges
Dow YMM8, +0.17% S&P 500 ESM8, +0.04% and Nasdaq NQM8, -0.07% futures are all pushing higher. Asian markets ADOW, -0.18% bounced back from an earlier drop, while Europe SXXP, +0.12% is mixed.
Read: Here’s what a scandal in Japan could mean for the yen
Gold GCM8, -0.20% is flat. The dollar DXY, +0.05% is slightly weaker, as is oil CLJ8, +0.57%
Read Market Snapshot for more
Bitcoin BTCUSD, +2.12% is fighting back and is pushing above $8,000.
The chart
There was one more chart in that J.P. Morgan conference report worth pointing out, and it’s this one. It shows what investors see as the main geopolitical risk to markets for 2018.
The big blue area that’s not identified is laid out in their note, which says “the unpredictability of U.S. policies, particularly global trade, is perceived as the biggest risk to the global outlook.”
The buzz
Toys ‘R’ Us will sell or close all of its U.S. stores, putting 33,000 jobs at risk.
Shares of biotech Alexion ALXN, +1.32% are jumping after the biotech revealed positive trial results for a blood disorder drug.
More fanning of the flames: new White House economic adviser Larry Kudlow says China can expect the U.S. to be tough on trade.
Disney DIS, +0.16% has done some reorganizing at the top, putting two execs in line to succeed CEO Bob Iger.
Supervalu SVU, -0.76% is popping higher after company says it’ll shed its Farm Fresh stores.
Read: Why every investor should be terrified by Home Depot’s slide
The Senate approved late Wednesday a revision of the Dodd-Frank act. It will roll back some crisis-era banking regulations for small and midsize banks, a move that risks sparking another financial crisis.
Apple AAPL, -0.85% , Facebook FB, +1.27% and Alphabet’s Google GOOGL, +0.79% could get hit by billions of dollars under a new “digital tax” scheme the European Commission reportedly has in the works.
Walmart WMT, -0.71% has filed a patent for autonomous robotic bees — so-called pollination drones. Black Mirror anyone?
Weekly jobless claims, import prices, the Philly Fed and Empire State indexes are all coming ahead of the open. A home-builders’ index is due later on.
The stat
$17.4 million — That’s how much Wells Fargo’s CEO Timothy Sloan made in 2017. That was 291 times the bank’s median salary, but still his package was the lowest among big U.S. banks.
Sloan was promoted to the helm in October 2016, shortly after a scandal erupted over the bank’s sales practices.
The quote
“I had no idea. I just said ‘You’re wrong.’ — That was President Donald Trump revealing he had made up facts about a trade deficit with Canada when speaking to Prime Minister Justin Trudeau, according to an audio of those remarks obtained by The Washington Post.
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