| By Julia Horowitz • Thursday, November 21 | | | | Good Thursday morning. In today's newsletter: Maybe a trade deal won't happen after all, GM sues Fiat Chrysler and Millennials still love bank branches.
US stock futures point lower as investors gut check their expectations for a trade deal between the United States and China. Markets in Europe fell in early trading, following a down session for stocks in Asia.
Happening now: Shares of TD Ameritrade soared nearly 20% in premarket trading on a report that it's in takeover talks with Charles Schwab. Both players have been hit by a race to the bottom on the fees they charge for trades.
▸ 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 6:10 AM ET | | MARKET FLASH Can the US and China cross the finish line?
When US and Chinese negotiators reached a preliminary agreement to ease trade tensions last month, investors were ecstatic. Yes, some details still needed to be hammered out. But the consensus was that a "phase one" deal would soon be finalized. All eyes were on the APEC summit in Chile on November 16 and 17, which was tapped for a potential signing.
It's now November 21. There's no deal in place. The APEC summit was canceled amid civil unrest in Chile — but failure to reach a deal has been about more than just finding a venue.
"It is now nearly six weeks since that trade breakthrough and rather than the market simply wondering when it will be signed, there has to be a small but growing risk as to whether it gets signed at all," said Deutsche Bank's Jim Reid. | |
He has a point. Reports abound that there's still distance between the United States and China on key issues such as agricultural purchases and tariff rollbacks, and that negotiators could be at an impasse.
Another twist: Congress has passed a bill seen as supportive of Hong Kong's pro-democracy protesters, stoking China's ire. The measure now heads to President Donald Trump's desk. If he signs it, Beijing has indicated that the trade deal could be affected.
"If the US side goes its own way, China will take effective measures to resolutely counteract it, and all consequences must be fully borne by the US," read an editorial in the state-owned People's Daily.
China's top trade negotiator, Lie He, reportedly tried to tamp down anxiety on Thursday with remarks that he remained "cautiously optimistic" about an agreement.
But that hasn't been enough for markets to entirely shake a sense of gloom. At this point, investors have priced in a deal of some sort. Any other outcome could deal a shock.
Remember: Another round of US tariffs on consumer goods from China is set to go into effect on December 15, smack dab in the middle of the holiday shopping season. The clock is ticking.
Capital Economics' Neil Shearing expressed his skepticism this way: "Trade deals in the modern era are hard to do."
His view: "Trade agreements necessarily require governments to make compromises that balance the competing interests of different groups," he wrote in a blog post this week. "That's become much harder in recent years because the complexities of the modern economy require deals to cover a much wider terrain." | | VOICES Don't fear the stock pullback "We're up over 20% in markets, and that's a good year by any stretch of the imagination."
NANCY TENGLER, CHIEF INVESTMENT STRATEGIST AT TENGLER WEALTH MANAGEMENT
Watch her full interview on CNN Business' "Markets Now" show. | | CORPORATE WATCH GM sues Fiat Chrysler over alleged union bribes | |
Competition in the auto sector is fierce. But this is unusual: General Motors has filed a US federal lawsuit against rival Fiat Chrysler, arguing that it was hurt by its rival's corrupt labor relations with the United Auto Workers union.
The racketeering suit, filed Wednesday, cites wrongdoing by former Fiat Chrysler execs who have pleaded guilty as part of an ongoing federal probe into the UAW.
"This lawsuit is intended to hold Fiat Chrysler accountable for the harm its actions have caused our company and to ensure a level playing field going forward," said Craig Glidden, GM's general counsel.
The details: The suit argues that Fiat Chrysler bribed UAW officials over the course of the past decade with "millions of dollars in prohibited payments and things of value" in order to get a better labor deal from the union than GM was able to secure.
Chrysler argues that the GM lawsuit is conveniently timed. The UAW and Fiat Chrysler are engaged in contract negotiations, and Fiat Chrysler is trying to close a proposed merger with French automaker PSA Group, the maker of Peugeot.
FCA's take: "We are astonished by this filing, both its content and its timing," the company said in a statement.
Investor insight: Shares of Fiat Chrysler are down 2% in Milan on Thursday. | | UP NEXT
Macy's reports earnings before US markets open. Gap, Nordstrom and Ross Stores follow after the bell.
Also today →
▸ The European Central Bank publishes minutes from its October meeting at 7:30 a.m. ET.
▸ Existing US home sales for October arrive at 10 a.m. ET.
Coming tomorrow: How are those US consumers feeling again? The latest University of Michigan consumer sentiment survey arrives.
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WHAT WE'RE READING AND WATCHING
▸ The world's best pension system is being pushed to the brink (CNN Business)
▸ Saudi Aramco sidelines foreign banks on the Aramco IPO (FT)
▸ Google's new ad policy will still allow politicians to run false ads (CNN Business)
▸ Amazon is America's CEO factory (Wall Street Journal)
▸ 5 takeaways from Gordon Sondland's explosive impeachment testimony (CNN)
▸ PayPal scoops up online discount platform Honey for $4 billion (CNN Business)
▸ A Tory election win is all the markets can see (Bloomberg) | | | FINAL WORD Millennials and Gen Z love going to the bank
Thought bank branches were dead? Think again.
The number of US bank branches has shrunk by more than 3,000 since 2010. But new research suggests that banks should think twice before shuttering their next outpost: Many customers, especially younger ones, still regularly rely on physical banks to make deposits, get paper money and even pay bills, my CNN Business colleague Matt Egan reports.
Here are the stats: 72% of Gen Z consumers visit a physical bank branch at least monthly — the highest of any age group, according to a study of 1,000 consumers by Adobe Analytics shared exclusively with CNN Business. And 60% of Millennials say the same.
Surprisingly, older Americans were less likely to visit physical banks every month. Half of Gen X respondents said they did so, while Boomers came in at 55%. Maybe Millennials just want all the free coffee banks have started to offer?
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