| By Charles Riley • Thursday, October 10 | | | | Happy Thursday. In today's newsletter: Another round of trade talks between the United States and China kick off in Washington, the broker price wars start in earnest and Saudi Aramco's IPO takes shape.
US stock futures point lower after markets rallied Wednesday on optimism over a partial trade deal between the United States and China. Stocks in Europe opened mixed, while most markets in Asia gained.
▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. | | | What's happening now in markets: MARKET DATA AS OF 5:40 AM ET | | TRADE MONITOR US and China talk trade ... again
Prospects of a sweeping trade deal between the United States and China are dimming as negotiators prepare to resume two days of talks.
Pessimism inside the Trump administration is largely based on signals from Beijing that it's unlikely to make major concessions during the 13th round of talks, raising speculation that both sides may try to reach for a "mini deal."
What's a mini deal? An agreement could include new purchases of American farm products in exchange for wiping out additional tariffs set to kick in starting next week.
President Donald Trump agreed in September to postpone an increase in tariffs on $250 billion in Chinese goods from 25% to 30% until October 15. He also delayed a tranche of tariffs until mid-December to avoid hurting consumers during the holiday shopping season. | |
Beijing has shown few signs it is willing to make any of the concessions — like reforms to subsidies and China's state-economy model — that Trump and his aides are looking for, according to US officials. A fight between China and the NBA has only widened the gap between the two countries.
Political considerations: Beijing has surely kept a close watch on the move to impeach Trump in the US House of Representatives, a political development that could factor in when and how a trade agreement is reached.
"With impeachment on, the odds of significant progress in public are low. What matters is the private commitment of the US administration," Sebastien Galy, a senior macro strategist at Nordea Asset Management, said in a research note. | | VOICES On the costs of the trade war "There is no place left to hide the rising costs for Americans. President Trump may soon decide that it's time to make a deal."
MARY E. LOVELY, PROFESSOR OF ECONOMICS AT SYRACUSE UNIVERSITY
Read more on CNN Business. | | BROKER WARS Fidelity is the latest broker to slash fees
Breaking this morning: Fidelity Investments will no longer charge customers who buy or sell US stocks, ETFs and options. The broker previously charged $4.95 for online stock trades.
The price change was first reported by the Wall Street Journal. Fidelity had been the last major US broker to resist dropping commissions to zero in the face of intense competition from digital upstarts.
Rival brokers Charles Schwab, TD Ameritrade and E-Trade all said last week that they would eliminate commissions. Industry participants say brokers are going to have to start offering more services if they want to stay competitive.
"For every broker out there, trying to sell services with explicit fees is going to be almost impossible. The next frontier will be centered around providing more financial well-being solutions — expanding beyond just brokerage products," Bill Capuzzi, CEO of Apex Clearing, told CNN Business.
The big idea: Brokers are going to start looking a lot more like ... banks.
| | MIDDLE EAST MONITOR Aramco's IPO could still be a blockbuster | |
Delayed by a year, Saudi Arabia now looks ready to push ahead with a partial listing of its giant oil company in the coming weeks. The deal under discussion is smaller than previously touted, but could still turn out to be the biggest IPO on record, Julia wrote before jetting off on a short vacation.
Details, details: Analysts expect that Saudi Arabia will list between 1% and 2% of Saudi Aramco on the Tadawul exchange in Riyadh by the end of the year. An international listing, possibly in Tokyo, could follow in 2020 or 2021.
Splitting the IPO into phases is a departure from the original plan for a market debut in 2018. Then, Saudi Arabia was expected to float 5% of the company, raising as much as $100 billion. It was looking at international markets such as New York or London, as well as Riyadh.
"We're talking about a much smaller stake sold in the Saudi market," said Ayham Kamel, the Middle East and North Africa practice head at Eurasia Group, a political risk consultancy.
Estimates of how much the flotation will raise still vary widely. Crown Prince Mohammed bin Salman reportedly wants the deal to value Aramco at $2 trillion; analysts peg it no higher than $1.5 trillion.
Selling 1% at the bottom of that range would fetch $15 billion. But selling 2% at the top could generate $40 billion, eclipsing the record $25 billion raised by Alibaba in 2014. | | UP NEXT
Delta Air Lines reports results before US markets open.
Also today →
▸ The US CPI inflation report arrives at 8:30 a.m. ET.
Coming tomorrow: The first reading of the University of Michigan consument sentiment survey for October.
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WHAT WE'RE READING AND WATCHING
▸ Why ending the UAW strike will be so hard (CNN Business)
▸ Mario Draghi ignored in-house advice on decision to restart QE (FT)
▸ China has an apology playbook. The NBA has another idea (WSJ)
▸ Tech giants shift profits to avoid taxes. There's a plan to stop them (NYT)
▸ LVMH earnings ease fears over Hong Kong hit (Reuters) | | | OKAY, SO... CEO turnover is at an all-time high
It's not just former WeWork CEO Adam Neumann. CEO turnover spiked to an all-time high last quarter, according to a new report from outplacement firm Challenger, Gray & Christmas.
A record 434 CEOs left their posts during the third quarter, Challenger said. That's up 40% from the second quarter, and a 10% jump compared to the same period in 2018.
So far this year, 1,160 CEOs have left their posts, up by 13% from this time in 2018. Other notable examples, per my CNN Business colleague Matt Egan: Charlie Scharf, who left Bank of New York Mellon to join Wells Fargo, and Overstock CEO Patrick Byrne, who departed the online retailer in August under unusual circumstances.
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