Friday February 02, In This Newsletter. Market Snapshot. Today's Calendar

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1 web Friday February 02, 2018 In This Newsletter White House: Trump Is Expected to Approve Release of Classified Memo Law Firm Representing Kushner Appoints Public-Relations Veteran Tillerson Raps Russia, China as 'Imperial Powers' in Latin America Mnuchin Met With Many CEOs While Developing Tax Plan Trump Is Willing to Walk From Immigration Talks Plus: Today In Canada Market Snapshot DJIA Futures S&P 500 Futures OPENING CALL Disappointing earnings reports and a selloff in government bonds sent global stock markets sharply lower Friday ahead of the U.S. monthly jobs report. Futures pointed to a 0.7% opening loss for the S&P 500 and a 1% drop for the Dow Jones Industrial Average after a lackluster session on Thursday. The Stoxx Europe 600 fell 1% late morning, echoing similar losses in Japan and South Korea. Rising government bond yields contributed to the unease in equity markets, analysts said, as investors bet that central banks will withdraw support as the economy strengthens and inflation picks up. "The rise in yields has spooked the equity market," said Patrick Spencer, vice chairman of equities at Baird. Still, he believes that technology will keep inflationary pressures muted longer term while a brightening earnings picture in the U.S. will keep the market on an uptrend. Analysts' projections for U.S. earnings in 2018 have been upgraded significantly over the past month, while results for the fourth quarter have largely exceeded expectations. Investors may get a better sense of the inflation picture and the Fed's trajectory later Friday as the U.S. monthly jobs report is released. The data is expected to show a pickup in hiring at the start of the year after a slightly soft gain in December, while wage figures will be watched closely in light of a recent market focus on inflation. NASDAQ Futures FTSE Xetra DAX While higher wages could contribute to the climb in government bond yields and fears of tighter monetary policy, many investors are still hoping for a pickup as a sign of strength in the economy. CAC Nikkei Hang Seng Euro NYMEX Crude Year Note As of 6:30 a.m. ET Today's Calendar 1:30 p.m. "My optimism about the U.S. is largely premised on the idea that the labor market is tight enough to drive more wage growth, and that will drive consumer confidence and consumption," said Ron Temple, co-head of multi-asset at Lazard Asset Management. "I really want to see wage growth grind higher," he said, as it can ultimately boost revenues for companies even if it means they have to pay employees more and the Fed can gradually push rates higher. Corporate results drove many of the Fridays's biggest share moves. In Europe, shares of Deutsche Bank fell 5.7% after it reported a sizable net loss for the fourth quarter and its third consecutive full-year loss. Earnings from U.S. technology giants released on Thursday were mixed, with reports from Amazon.com and Apple rising in U.S. pre-market trading after posting results but Google-parent Alphabet edging lower.

2 1:30 p.m. Jan U.S. Employment Report 2:45 p.m. Jan ISM-NY Report on Business 3:00 p.m. Jan University of Michigan Survey of Consumers - final 3:00 p.m. Dec Manufacturers' Shipments, Inventories & Orders (M3) 7:30 p.m. John Williams speech at Financial Women of San Francisco event Recent Analyst Ratings Actions Banc of California Cut to Neutral From Buy by B. Riley DCP Midstream Raised to Neutral From Sell by Goldman Sachs Plantronics Cut to Neutral From Buy by Sidoti & Co. after posting results but Google-parent Alphabet edging lower. In Asian trading Friday, stock indexes in Japan and South Korea suffered earnings-related hits. EQUITIES Three of the biggest tech companies reported record quarterly financial results on Thursday as they extended their dominance over swaths of the global economy. Apple, Alphabet and Amazon.com - with a combined market value of more than $2 trillion - all boosted growth by broadening their reach into new areas. More than the other two companies, Amazon has spread beyond its core market. The online-retail giant has built the largest cloud-computing business, created a major Hollywood studio and, more recently, become a big bricks-and-mortar retailer with the acquisition of Whole Foods, which accounted for roughly 7% of its sales. CBS and Viacom said Thursday that their boards have formed special committees to evaluate a potential merger, a deal that would reunite the two big pieces of the Redstone family's media empire. Shari Redstone, vice chairman of both companies, is pushing for a merger, people close to the discussions say. She, along with her 94 year-old father, Sumner Redstone, controls CBS and Viacom, with a roughly 80% controlling stake in each company through their holding company National Amusements. Quick Links Contact Us Privacy Policy Unsubscribe This is the second time in less than two years that Ms. Redstone has tried to get CBS and Viacom back together, after they split up in FOREX Any positive impact on the U.S. dollar from U.S. non-farm payrolls, due ET, "should be limited," says ING. According to a WSJ poll, payrolls have likely risen by 177,000 in January, compared with 148,000 in December and the unemployment rate has stayed the same at 4.1%. "As the dollar's reaction to the January FOMC meeting showed, any boost to USD from the domestic data seems to be limited and short-lived," says ING, adding that investors are focused on "growth and monetary policy re-pricing opportunities elsewhere [and concerns] about the veil of the U.S. political uncertainty." BONDS Climbing government bond yields contributed to the unease in equity markets, analysts said. Yields on 10-year U.S. Treasurys edged up to 2.805% on Friday from 2.773% late Thursday, their highest afternoon level since April Yields on 10-year German government bonds rose to 0.745% from 0.650%, while yields on 10-year U.K. government bonds also surged, hitting their highest level since the month before the Brexit vote. "Equity markets globally are becoming aware that bond yields are increasing, and ultimately that means scope for rate hikes" and stimulus efforts unwinding, said Stuart Ive, senior client manager at OM Financial. "These moves in the bond market might start to get investors a bit twitchy."

3 COMMODITIES Oil prices were mixed Friday morning, as the market weighed rising U.S. crude output against more bullish factors like increased compliance with OPEC-led production curbs. Brent crude, the global benchmark, was down 0.10% at $69.58 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.06%, at $65.84 a barrel. U.S. oil production, driven by shale extraction, surpassed 10 million barrels a day in November for the first time in nearly 50 years, according to data released this week by the U.S. Energy Information Administration, reigniting concerns the market is oversaturated with crude. But prices have still have found support from adherence to OPEC's deal to limit supply. Compliance by OPEC with the oil cartel's agreement to hold back production by 1.8 million barrels a day rose to 138% last month, according to a Reuters survey. That's a "sign of their steadfast commitment to eliminating the global supply surplus, according to Stephen Brennock, an analyst at brokerage PVM Oil Associates. Still, prices have overall stayed steady in recent weeks, helped by a weakening U.S. dollar and production outages in OPEC-member Venezuela. "One important role in this rapid price recovery is played by the weak U.S. dollar, which is again nearing the three-year low it hit last week," analysts at Commerzbank wrote in a note Friday. Oil market observers are looking ahead to the release of weekly data Friday afternoon by Baker Hughes that will report the number of active rigs drilling for oil in the U.S., a proxy for activity in the sector. Gold futures were trading up slightly at $1, in London. Other Top Stories Of The Day White House: Trump Is Expected to Approve Release of Classified Memo President Donald Trump is expected to tell Congress as early as Friday that he has approved the release of a classified memo that Republicans allege shows improper surveillance of a onetime Trump campaign aide, a White House official said. Law Firm Representing Kushner Appoints Public-Relations Veteran

4 The law firm representing senior White House adviser Jared Kushner has hired Peter Mirijanian, a veteran of prior White House investigations, to handle press relations for the firm's clients. Tillerson Raps Russia, China as 'Imperial Powers' in Latin America Secretary of State Rex Tillerson criticized Chinese and Russian attempts to expand footholds in Latin America as the chief U.S. diplomat prepared to embark Thursday on a visit to the region. Mnuchin Met With Many CEOs While Developing Tax Plan Steven Mnuchin spent the first months of his tenure as Treasury secretary meeting with a wide array of business executives as he began pushing the Trump administration's plans to overhaul the tax code. Trump Is Willing to Walk From Immigration Talks President Donald Trump said Thursday that he is willing to walk away from immigration negotiations if Democrats won't agree to his terms, and many involved in the debate said the chances of a deal appear to be fading. Today In Canada Earnings scheduled Imperial Oil Limited (IMO.T) 4Q Norbord Inc. (OSB.T) 4Q Stocks to watch Great Rock Enters Into Formal Letter Of Intent To Acquire Comepay Group Of Companies >GROC New Hampshire Site Evaluation Panel Rejects Application by Northern Pass, an Eversource/Hydro-Quebec Project Northern Pass Says Decision Sends 'Chilling Message' to Energy Projects in New Hampshire Northern Pass Will Seek Reconsideration, Review All Options >ES HQB.YY Western Energy Services Corp. Completes Refinancing Transactions Want to send a co-branded daily version to your valued clients? Dow Jones offers subscribing firms the opportunity to co-brand Dow Jones Morning Briefing for redistribution to their clients. If your firm is interested in co-branding, please contact us at service@dowjones.com or DOWJONES.

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Dr. Greg Hallman Director, Real Estate Finance and Investment Center (REFIC) McCombs School of Business University of Texas at Austin

Dr. Greg Hallman Director, Real Estate Finance and Investment Center (REFIC) McCombs School of Business University of Texas at Austin POWERPOINT PARTNER } The US Economy today, with a close look at jobs