Oil is on track to post its third weekly loss, with U.S. crude down 2.2% and Brent off by 2%. U.S. inventory builds, a global glut and a Fed rate hike are still the usual story, but two new factors could crank up more pressure. The IEA predicted today that oil markets will remain oversupplied at least until the end of 2016 - due to sluggish demand and OPEC's failure to curb production - and the U.S. looks likely to lift its four-decade-old crude export ban (see below) in another few hours. Crude futures -1.3% to $34.48/bbl.

Economy

The U.S. House is poised to pass a bipartisan $1.1T bill to fund the government until next September, with GOP and Democratic leaders going into overdrive to boost their numbers before the vote. What else is in the package? A whole lot. The lifting of a U.S. crude export ban, alternative energy tax credits, Dodd-Frank clauses, restrictions on Syrian refugees, blocking federal funding for abortions, a delay to portions of Obamacare, and many others topics.

The White House is also calling for "common sense steps" to help Puerto Rico claw out of its $72B debt crisis. House Speaker Paul Ryan has instructed committees to work with the island for a solution to its financial woes, calling for a plan to be crafted by the end of March, while U.S. Treasury Secretary Jack Lew added that any solution should include a mechanism for the territory to restructure its debt.

Beijing has issued a second pollution red alert, little more than a week after the first ever such warning. A wave of smog is due to settle over the city of 22M from Saturday to Tuesday, triggering vehicle restrictions and forcing schools to close. Levels of PM2.5, the smallest and deadliest airborne particles, are set to top 500, more than 20x the level considered safe by the World Health Organization.

Concluding a two-day policy meeting, the Bank of Japan surprised markets this morning by announcing plans to expand the range of its asset buying program. What's changing? The central bank is increasing purchases of ETFs and lengthening the maturity of bonds it buys to encourage investment in the economy. The move follows the Fed's recent decision to raise interest rates for the first time in almost a decade, underscoring a divergence between the U.S. and other wealthy economies which still face a heavy risk of deflation.

The Argentine peso fell by as much as 30% against the dollar on Thursday after Mauricio Macri, the country's newly elected president, lifted capital controls to kick-start the economy. The challenge now is to make sure that the devaluation does not lead to a spiraling of already high inflation. To that end, finance minister Alfonso Prat-Gay has made clear that the central bank will intervene if the peso falls too far too fast in what he described as a "dirty float" system.

Brazil's Supreme Court has cleared the way for impeachment proceedings to move forward against President Dilma Rousseff, but under conditions that may increase her chances of surviving an ouster from office. Under the new ruling, a congressional special committee that formed earlier this month must be disbanded and re-formed in a move that will likely produce a group more favorable to the president. Rousseff will be allowed to remain in office while the process plays out.

Stocks

Alibaba must do a better job of fighting the sale of counterfeit and pirated goods on its e-commerce websites if it wishes to remain off the U.S. government's "Notorious Markets List," according to a warning from the Office of the Trade Representative. Inclusion on the annual list, while not carrying direct penalties, would be a blow to Alibaba's (NYSE:BABA) efforts to cultivate retailer relationships, shed perceptions its sites are riddled with fakes and could drag down its share price.

Dell has shed some light on how it will close an estimated $10B financing gap in its proposed acquisition of EMC Corp. (NYSE:EMC) by disclosing plans for an initial public offering of its SecureWorks security division. For the 9 months ending Oct. 30, the unit had revenue of $245.4M (+28% Y/Y) and a $57.5M net loss. SecureWorks plans to list on the NYSE under the symbol SCWX.

Clearing a major hurdle, Apple (NASDAQ:AAPL) and China UnionPay are teaming up to bring Apple Pay to China "as soon as early 2016." China UnionPay holds a monopoly on credit and debit processing in the country, which was previously considered a major headwind for Apple. The solution will allow cardholders to add bank cards to iOS devices and utilize China UnionPay's QuickPass as part of the security for the system.

Qihoo 360 has agreed to be acquired by a consortium of investors for approximately $9.3B, including about $1.6B of debt. The group includes Citic Guoan, Golden Brick Silk Road Capital, Sequoia Capital China, Taikang Life Insurance, Ping An Insurance, Sunshine Insurance, New China Capital, Huatai Ruilian and Huasheng Capital. If completed, the move will result in Qihoo 360 (NYSE:QIHU) becoming a privately-held company and its ADSs will no longer be listed on the NYSE.

What goes up must come down? Lumber Liquidators (NYSE:LL) tumbled 10.5% yesterday following a Goldman Sachs downgrade that said shares have run out the string on the impact of Whitney Tilson's short capitulation. The investment firm lowered its rating on the flooring retailer to Sell from Neutral.

CACI International has emerged as the top contender for Lockheed Martin's (NYSE:LMT) IT business, sources told Reuters. Leidos (NYSE:LDOS) and Engility (NYSE:EGL), had been also considering offers, but now feel discouraged following meetings with the company. Instead of a CACI sale, Lockheed may also decide to spin off the business, which has annual revenues of $4.5B-$5B.

Looking to handle more of its own delivery, Amazon (NASDAQ:AMZN) is in talks to lease 20 Boeing (NYSE:BA) 767 jets to provide air services for its fulfillment infrastructure, The Seattle Times reports. The online retail giant wants to build out its own cargo operations to include overnight air operations in the U.S. and avoid delays from carriers such as UPS (NYSE:UPS), which have struggled to keep up with the rapid growth of e-commerce.

The U.S. Federal Trade Commission is looking for Staples (NASDAQ:SPLS) to improve its offer to divest assets to further its bid to buy rival Office Depot (NASDAQ:ODP), the agency said in court on Thursday. Both companies' stock plunged last week after the FTC filed suit to block the $6.3B deal, saying that the deal would hurt big customers who want nationwide contracts to buy their office supplies. Staples, for its part, said it had offered to divest $500M in commercial contracts.

GlaxoSmithKline has agreed to pay Bristol-Myers Squibb (NYSE:BMY) up to $1.5B to acquire the U.S. company's pipeline of HIV drugs. The deal will boost ViiV Healthcare, Glaxo's (NYSE:GSK) HIV unit in which Pfizer (NYSE:PFE) and Shionogi (OTCPK:SGIOY) are junior partners, with the hope of returning to earnings growth in 2016. Revenue from the HIV business increased 65% in Q3, offsetting falling sales elsewhere in the company's large pharmaceuticals unit.

Energy MLPs got battered yesterday as crude prices settled below $35/bbl and credit rating agencies readied more energy companies for possible downgrades; A dividend cut from Teekay LNG Partners (NYSE:TGP), which echoed Kinder Morgan's (NYSE:KMI) earlier reduction, also contributed to the drop. Among the decliners: KMI -3.5%, ETE -9.5%, ETP -6.2%, EPD -1.5%, PAA -2.7%, PAGP -6.3%, WMB -8.2%, WPZ -6.3%, OKE -4.9%, OKS -0.9%, MMP -2.8%, SEP -0.5%, EEP -1.5%, SXL -2.2%, BPL -0.6%, TGP -51.1%.

BHP Billiton's credit rating has been put on review for downgrade by Moody's Investors Service, highlighting how the commodities rout is wreaking havoc on miners, even those with relatively strong balance sheets. "The review...reflects Moody's expectation that weak commodity prices will persist for the next several years, significantly reducing BHP Billiton's (NYSE:BHP) earnings and cash flow generation" said Matthew Moore, a senior credit officer.

Meanwhile, Philip Morris has lost a protracted and costly international legal battle with Australia over laws requiring its products to be sold in plain packaging with graphic health warnings. Australia was the first country in the world to force manufacturers to strip all branding from cigarette packets, although several other countries have followed its lead. Philip Morris (NYSE:PM) has challenged the legislation since 2011.

Volkswagen is creating an independent claims program for U.S. owners of nearly 600K diesel vehicles that emit up to 40x legally allowable emissions. It's too early to say if the program will "offer buybacks to vehicle owners, cash or other specific compensation for mileage or emissions repairs," said Camille Biros, deputy administrator of the VW (OTCPK:VLKAY) claims program. The German automaker also named expert Kenneth Feinberg, who ran compensation funds for the Sept. 11 attacks, BP's Deepwater Horizon disaster and General Motors' (NYSE:GM) ignition switch crisis, to head the program.

Thursday's Key Earnings

Accenture (NYSE:ACN) -5.3% after light guidance.
General Mills (NYSE:GIS) -3.3% on slumping net sales.
Red Hat (NYSE:RHT) +6% AH on an earnings beat.
Rite Aid (NYSE:RAD) -0.3% following in-line profits.

Today's Markets

In Asia, Japan -1.9% to 18987. Hong Kong -0.5% to 21756. China flat at 3579. India -1.1% to 25519.
In Europe, at midday, London -0.3%. Paris -0.6%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.3%. S&P -0.3%. Nasdaq -0.1%. Crude -1.3% to $34.48. Gold +0.6% to $1055.60.
Ten-year Treasury Yield -2 bps to 2.21%

Today's Economic Calendar

9:45 PMI Services Index Flash
10:00 Atlanta Fed's Business Inflation Expectations
11:00 Kansas City Fed Mfg Survey
1:00 PM Baker-Hughes Rig Count