Britain will not seek a Brexit deal that leaves it "half in, half out" of the EU, Prime Minister Theresa May will say today, in a speech outlining her 12 priorities for upcoming divorce talks with the bloc. Those will likely include leaving the EU's single market and regaining full control of Britain's borders, reinforcing fears of a "hard Brexit," which has weighed heavily on the pound. The speech will begin at 6:45 a.m. ET.

Economy

The world's political and business leaders, plus the usual smattering of celebrities have gathered in Davos, the Swiss Alpine resort where the World Economic Forum's annual conference begins today. The official theme of the 2017 meeting is "responsible and responsive leadership." In WEF-speak, that means "recognizing that frustration and discontent are increasing in the segments of society that are not experiencing economic development and social progress."

Making the first appearance by a Chinese leader at the forum, President Xi Jinping said the world's most important task is to revive the global economy and pressed his case for free trade. "Protectionism is like locking oneself in a dark room," he declared. "No one will win a trade war." Xi also likened the world economy to a "big ocean that you cannot escape from," adding that any attempt to cut off from the world would simply not be possible.

Oil markets are going to stabilize this year, according to OPEC's Secretary General. Speaking in Venezuela, Mohammed Barkindo also voiced optimism that OPEC economies will improve as a result of last year's producer agreement. It comes after Saudi Arabia said the Kingdom is committed to cutting its output and is prepared to extend the supply deal if necessary.

Global shipping insurers have devised a way to ensure nearly full coverage for Iranian oil exports from next month after striking a deal to provide cover without involving U.S.-domiciled reinsurers. That will provide a boon to Iran, trying to raise oil exports after most sanctions were lifted last year, though banking restrictions that remain in place could cap any major rise in exports.

Trump roundup... The IMF has raised its forecasts for the U.S. economy, reflecting an expected boost from the economic policies of the President-elect. The new outlook sees U.S. growth at 2.3% this year and 2.5% in 2018 (+0.1% and +0.4% from previous estimates), marking an improvement from lackluster American growth of around 1.6% in 2016.

Healthcare: Trump has pledged to provide "insurance to everybody" under his plan to replace Obamacare, The Washington Post reports. He also promised to force pharmaceutical companies to directly negotiate drug prices with the government for Medicare and Medicaid, stating "they're politically protected, but not anymore."

Taxes: One of the cornerstones of the House Republicans' corporate-tax plan that would levy duties on imports and exempt exports is "too complicated," according to the President-elect. "Anytime I hear border adjustment, I don't love it... Because usually it means we're going to get adjusted into a bad deal. That's what happens."

Russia and China: Trump said he would keep intact sanctions against Russia "at least for a period of time," however, "if you get along and Russia is really helping us, why would anybody have sanctions?" The President-elect also said he wouldn't commit to the "One China" policy until he sees progress from Beijing in its currency and trade practices, and won't label China a currency manipulator on his first day in office, but will rather "talk to them first."

Stocks

South Korean prosecutors are seeking an arrest warrant for Lee Jae-yong, the heir to the Samsung conglomerate and one of the nation's wealthiest and most-powerful executives. If the warrant leads to an indictment, it would be the latest criminal charges in an unprecedented corruption scandal that has rocked the country's political system. Will the company have to rethink its leadership?

More Samsung news... The firm has concluded that the fires and explosions affecting its Galaxy Note 7 were caused by battery problems, not the phone's hardware or software, Reuters reports. The results of the investigation will likely be announced on Jan. 23, as Samsung Electronics (OTC:SSNLF) seeks to put behind it one of the biggest product safety failures in tech history.

Just a day after it opened an augmented reality lab, Baidu (NASDAQ:BIDU) has beefed up on its push into artificial intelligence, announcing the hiring of former Microsoft (NASDAQ:MSFT) executive Qi Lu as group president and COO. Baidu is best known for its search engine, which dominates in China, but over the past two years it has put focus on developing AI, as earnings from its core business continue to wane.

British American Tobacco has agreed on terms to buy Reynolds American (NYSE:RAI) after it increased its offer for the 57.8% of the company it did not already own to $49.4B. Reynolds stockholders will receive $29.44 in cash and 0.5260 BAT (NYSEMKT:BTI) shares for each of their shares, creating the largest listed tobacco firm. BAT previously offered $47B, an offer that was rejected for being too low in November. RAI +3.6% premarket.

Seeing eye-to-eye... Italy's Luxottica (NYSE:LUX) and France's Essilor (OTCPK:ESLOY) have agreed on a €50B merger, FT reports, in one of Europe's biggest cross-border deals. The combination will join the world's leading consumer eyewear group and manufacturer of corrective lenses, and has been described as a "merger of equals." LUX +8.3% premarket.

A SpaceX rocket successfully blasted 10 Iridium Communications (NASDAQ:IRDM) satellites into orbit on Saturday following a fiery launchpad explosion that halted operations since September. This is "the beginning of one of the biggest tech refreshes in history," Iridium CEO Matt Desch declared. The company has a seven-flight contract with SpaceX (Private:SPACE) worth $468.1M and intends to eventually replace its entire global network with 70 new satellites.

Airbus plans to test a prototype for a self-piloted flying car as a way of avoiding gridlock on city roads by the end of the year. In 2016, Airbus (OTCPK:EADSY) formed a division called Urban Air Mobility that's exploring concepts such as a vehicle to transport individuals or a helicopter-style vehicle that can carry multiple riders. The aim would be for people to book the vehicle using an app, similar to car-sharing schemes.

With Donald Trump taking aim at costs in the defense industry, Boeing (NYSE:BA) CEO Dennis Muilenburg will meet with the President-elect today for the second time since the election. They'll talk over Boeing's contract to build the next-generation version of Air Force One, although sources didn't give details about which aspect of the plane would be discussed.

Like many technology entrepreneurs, the founders of Snap Inc. (Private:CHAT) want to retain management control of the ephemeral messaging company, even as they sell shares to the public. In one respect, Evan Spiegel and Bobby Murphy are going further than tech firms typically do: Investors won't get any voting power with shares purchased in Snap's IPO, WSJ reports. The listing could be valued at between $20B-$25B.

Facebook is rolling out measures to fact check and flag fake news for the first time outside the U.S., bringing the tests to Germany in an attempt to control the proliferation of news hoaxes ahead of its election. Users will now be able to report a story as fake and it will be sent to Correctiv, a third-party fact checker. If it's fake, Facebook (NASDAQ:FB) will flag the item as "disputed," with an explanation.

Is CGI still strong with The Force? Walt Disney (NYSE:DIS)-owned Lucasfilm doesn't have plans to digitally recreate film performances of the late actress Carrie Fisher, best known for her role as Princess or General Leia Organa. Such technology was utilized in the newly released Rogue One, in which a digital embodiment of Peter Cushing, who died in 1994, returned for the role of the Grand Moff Tarkin.

Deutsche Bank may withhold bonuses from as many as 90% of its bankers and traders, according to the NY Post. Only the top 10% are expected to receive a bonus for 2016, and those payments may be spread out over the next five years. Deutsche (NYSE:DB) was hit hard last month when it settled a mortgage bond probe with the DOJ for $7.2B, which was only about half of what the government initially wanted.

Amid threats of higher levies on auto imports, Hyundai Motor (OTC:HYMTF) and affiliate Kia Motors (OTC:KIMTF) said they will spend $3.1B in the U.S. over the next five years and may even build a new American factory. The Trump effect? General Motors (NYSE:GM) plans to also announce a $1B investment in U.S. factories today in a development that could create as many as 1,000 new jobs at existing facilities.

The President-elect also said over the weekend that BMW (OTCPK:BAMXF) would face a 35% import duty for cars assembled at a new facility in Mexico and sold in the U.S. A company spokeswoman said the plant in San Luis Potosi would build the BMW 3 Series starting from 2019, with output intended for the world market.

An air bag made by Takata has ruptured in a Honda (NYSE:HMC) vehicle in Japan, resulting in a minor injury to the car's driver. Shares of the automaker closed down 2.7% in Tokyo on the news. Last week, Takata (OTCPK:TKTDY) agreed to plead guilty to criminal wrongdoing and pay $1B to resolve a DOJ air bag probe linked to at least 16 deaths worldwide.

Syngenta expects regulatory approval soon for ChemChina's proposed $43B takeover of the Swiss pesticides and seeds group. "We are working well with the U.S. and the EU regulators now toward finalizing the agreements with them and expect to be finished in the not too distant future," CEO Erik Fyrwald said at the World Economic Forum in Davos. SYT +1.6% premarket.

Clayton Williams Energy +31% premarket after Noble Energy (NYSE:NBL) decided to scoop up its smaller rival for about $2.7B. The cash-and-stock deal for Clayton (NASDAQ:CWEI) will enhance Noble's presence in the Permian Basin, America's hottest shale play. It provides more than 4,200 drilling locations on about 120,000 net acres, with resources of more than 2B barrels of oil equivalent.

Today's Markets

In Asia, Japan -1.5%. Hong Kong +0.5%. China +0.2%. India -0.2%.
In Europe, at midday, London -0.4%. Paris -0.7%. Frankfurt -0.9%.
Futures at 6:20, Dow -0.5%. S&P -0.6%. Nasdaq -0.6%. Crude +1.3% to $53.07. Gold +1.8% to $1217.10.
Ten-year Treasury Yield -5 bps to 2.32%

Today's Economic Calendar

8:30 Empire State Mfg Survey
8:45 Fed's Dudley Speech
10:00 Fed's Reserve Gov. Lael Bralnard speech
6:00 PM Fed's Williams Speech