The start of earnings season could test the Trump rally's endurance, at least in the short term. Financials, which have led the market's gains, are the first out of the gate with fourth-quarter results today. JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), PNC Financial (NYSE:PNC), First Horizon (NYSE:FHN) and First Republic (NYSE:FRC) are scheduled to report, as well as BlackRock (NYSE:BLK). The S&P financials sector has soared 17% since Election Day.

Economy

China's massive export engine sputtered for the second year in a row in 2016, with shipments dropping in the face of persistently weak global demand. Exports fell 7.7% and imports declined 5.5%, resulting in an annual trade surplus of $510B, below the $594.5B trade surplus in 2015. It may also be tough for trade this year, with President-elect Donald Trump vowing to brand Beijing a currency manipulator and threatening to slap high tariffs on Chinese goods.

Thailand's military-backed parliament has voted overwhelmingly to make amendments to the constitution as suggested by new King Vajiralongkorn, a move likely to delay a general election scheduled for the end of the year. Prime Minister Prayuth Chan-ocha said the changes were related to royal power clauses and it would take up to three months to resubmit a new draft.

The U.S. economy is "doing quite well" and faces no serious obstacles in the short term, with the labor market looking strong, Fed Chair Janet Yellen said in a town hall meeting with educators. But she still fears longer-term issues like widening income inequality, weak growth in labor productivity and a rollback of Dodd-Frank regulatory changes.

The Obama administration is ending the "wet foot, dry foot" policy that allowed Cubans who arrived in the United States without visas to pursue residency after one year. The move comes about a week before President Obama leaves office and is likely the last major change he will make to his overhaul of the U.S. relationship with Cuba.

"Compliance won't be 100%, it never is," OPEC delegates told Reuters, stating the group is unlikely to fully deliver on its target to cut production. According to the officials, 80% compliance would be good, with as low as 50% acceptable. OPEC planned to slash its output by 1.2M barrels per day to 32.5M bpd from Jan. 1, while Russia and other non-members expected to cut about half as much.

Stocks

Building on yesterday's 10% plunge, shares of Fiat Chrysler (NYSE:FCAU) are down 3% premarket, after the EPA accused the automaker of using software to allow excess diesel emissions. The notice affects over 100K cars, including trucks and SUVs, and the maximum fine that could be imposed would total $4.6B. CEO Sergio Marchionne called the regulator "belligerent" and said if anyone believed the allegation, then "they had been smoking something."

France has launched an investigation into Renault (OTCPK:RNLSY) on suspicion of emissions fraud, with three judges assigned to the case. The stock dropped 4.1% in Paris on the news. In November, the country's Ministry for the Economy and Finance passed a dossier on Renault to state prosecutors to determine whether action should be taken.

Takata shares jumped 16% overnight after the Japanese airbag maker reached an agreement with the DOJ over its faulty airbags. The settlement, which could come as soon as today, includes a $25M criminal fine, $125M in victim compensation and $850M to reimburse automakers who have suffered as a result of Takata's (OTCPK:TKTDY) widespread recalls.

Tesla announced in November it was doing away with unlimited free charging at its Supercharger stations, but it just revealed the new pricing guidelines for those who purchase vehicles after January 15, 2017. Tesla (NASDAQ:TSLA) owners will get 400 kWh of Supercharging credits (about 1,000 miles) for free each year; however, pricing for anything more than that will be dependent on the state or country. A trip from San Francisco to LA would cost about $15, while LA to NY will cost about $120.

Jobs and layoffs... Amazon (NASDAQ:AMZN) intends to create more than 100K jobs in the U.S., from software development to warehouse work, over the next 18 months. Lowe's (NYSE:LOW) plans to eliminate less than 1% of its workforce, or fewer than 3,000 positions, as the home improvement retailer tries to adapt to shifting shopping habits. Layoffs have also hit Morgan Stanley (NYSE:MS). The bank fired a higher number of senior investment bankers last week than in years past and cut bonuses by roughly 15%.

Pandora +9% premarket after saying it expects to beat its earnings and revenue forecasts, thanks to solid ad performance. The company surpassed 4.3M paid subscribers in December, with Pandora Plus generating more than 375K net new subs. As part of a commitment to cost discipline, Pandora (NYSE:P) will also reduce its U.S. employee base, excluding Ticketfly, by about 7% by the end of the first quarter.

With President-elect Donald Trump pushing for American manufacturing, Taiwan's Foxconn (OTC:FXCOF) and its Japanese subsidiary Sharp (OTCPK:SHCAF) are studying the possibility of building an LCD plant in the United States. The plan is "on the table," a company executive told Nikkei. "We will make a decision carefully." Foxconn, a major producer for Apple (NASDAQ:AAPL), is also considering iPhone production in the U.S.

South Korean prosecutors will decide whether to seek an arrest warrant for Samsung Group (OTC:SSNLF) leader Lee Jae-yong within two days, according to a spokesman for the investigation team. The executive left the special prosecutor's office early on Friday, more than 22 hours after arriving for questioning about an influence-peddling scandal that could topple President Park Geun-hye.

The launch of Nintendo's Switch begins a make-or-break period for a company that defined videogame hardware for three decades but now faces tougher competition. Nintendo's (OTCPK:NTDOY) console, which goes on sale March 3 for $299.99, is an innovative hybrid: gamers can play at home by connecting it to their TV sets or using the Joy-Con controllers, or take it on the go via a handheld device.

Marking its second recent billion-dollar deal in Japan, KKR has agreed to buy Hitachi's (OTCPK:HTHIY) power tools unit, Hitachi Koki (OTCPK:HKKIY), for about $1.3B. The firm is taking advantage of a push by Japanese conglomerates to restructure businesses by shedding non-core operations. In November, KKR acquired Calsonic Kansei (OTC:CLKNF), an autoparts maker backed by Nissan (OTCPK:NSANY), for $4.5B.

Anadarko Petroleum will sell its Eagle Ford Shale assets in south Texas for $2.3B to a strategic 50/50 partnership formed by Sanchez Energy (NYSE:SN) and Blackstone (NYSE:BX). CEO Al Walker said the sale would help Anadarko (NYSE:APC) accelerate operations in its more high-return properties such as Texas' Delaware Basin, the DJ Basin in Colorado and the deepwater Gulf of Mexico.

Peabody Energy has announced that a group of banks, including affiliates of Goldman Sachs and JPMorgan, has pledged a combined $1.5B in loans to help the coal producer exit bankruptcy in the coming months. The cash will be used to cover claims by Peabody's (OTCPK:BTUUQ) secured lenders and provide "a strong foundation" for its capital structure when it exits the $8B Chapter 11 bankruptcy it filed last April.

Monte dei Paschi will have to wait another two weeks for a green light on its rescue plan after eurozone finance ministers scheduled a Jan. 26 meeting to discuss the "compatibility" of Italy's bailout with EU rules. Last month, Rome authorized a €20B fund to help distressed lenders - first and foremost BMPS (OTCPK:BMDPY) - that envisages only limited losses for bank creditors and compensation to protect retail investors.

Making their deal official, India's SpiceJet has agreed to buy up to 205 jets from Boeing (NYSE:BA), with a firm order of 155 new aircraft (55 of the jets were announced in a 2014 deal) and an option for 50 more. The Boeing order, worth up to $22B before discounts, is the largest ever placed by an Indian airline as part of its expansion plans in the world's fastest growing aviation market.

Is there a new industry standard? All of JetBlue's (NASDAQ:JBLU) domestic flights now have free WiFi. The Fly-Fi internet system can deliver similar speeds, between 12-15 Mbps, as passengers are accustomed to at home - although those speeds may dip if everyone is streaming Netflix (NASDAQ:NFLX). Another perk... There's no need to reach cruising altitude before connecting.

Today's Markets

In Asia, Japan +0.8%. Hong Kong +0.5%. China -0.2%. India flat.
In Europe, at midday, London +0.3%. Paris +0.8%. Frankfurt +0.6%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude -1% to $52.48. Gold -0.2% to $1197.70.
Ten-year Treasury Yield flat at 2.35%

Today's Economic Calendar

8:30 Retail Sales
9:30 Fed's Harker Speech
10:00 Business Inventories
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count