Theresa May last night offered to help President Trump to prevent the West from being "eclipsed" by China as she urged him not to shirk his "obligation" to lead the world. The U.K. Prime Minister also hopes he can be an economic ally - after Britain's divorce from Europe, she'll need a trade deal with the U.S. The pair will meet face-to-face today, making her the first foreign leader to step into Trump's Oval Office.

Economy

More bilateral trade agreements? In place of the TPP, President Trump will seek quick progress toward a deal with Japan when Prime Minister Shinzo Abe visits the White House next month. Also on the agenda: Trump will speak with Vladimir Putin by phone this weekend, but administration officials didn't say whether he would bring up hacking or the fate of U.S. sanctions imposed on Russia.

Mexican President Enrique Pena Nieto has scrapped a planned trip to meet with President Trump, who has repeatedly demanded that Mexico pay for a wall on the U.S. border. Adding to the tensions, White House spokesman Sean Spicer sent the peso down 1.7% yesterday and Mexico's IPC index 1.4% lower when he told reporters Trump was considering a 20% tax on Mexican imports to pay for the wall's construction.

The U.S. economy likely ended 2016 with a mild groan more than a rousing cheer, at least according to the government's end-of-year report card. Gross domestic product is forecast to taper off to 2.2% in Q4, meaning the U.S. will have gone an 11th straight year without reaching 3% GDP. The Commerce Department will report the figures at 8:30 a.m. ET.

Greece and its creditors failed to resolve their differences Thursday during talks held in hopes of finding a solution for the country's deadlocked bailout. Its government has been caught for months between the IMF's demands for more austerity and Germany's refusal to discuss major debt relief, while the country's debt stands at about 180% of its GDP.

The Bank of Japan is still ways away from its 2% inflation target. December's core consumer price index - which excludes fresh food - fell 0.2% on year, marking the 10th consecutive month of decline. The yen also came under downside pressure overnight, as the BOJ increased its buying in 5- to 10-year bonds, sending a message that a tapering of its asset purchase program isn't on the table.

Iranian supertankers are sailing to Europe for the first time since sanctions were eased last year as one of the world's biggest crude shippers moves to step up deliveries. While European refiners have been taking small cargoes of Iranian oil, these are the first vessels operated by the National Iranian Tanker Company rather than independent shippers. Each of the very large crude carriers (VLCCs) are capable of carrying more than 2M barrels.

Stocks

Tech earnings are in focus following a raft of Q4 results after yesterday's closing bell. Alphabet (GOOG, GOOGL) shares fell 2.1% in extended trade after the company's quarterly earnings missed estimates. Revenue topped expectations, led by YouTube and mobile search, but higher costs weighed on margins. Meanwhile, Microsoft (NASDAQ:MSFT) shares headed higher buoyed by its cloud business, while Intel (NASDAQ:INTC) inched up on strong holiday sales.

Shaking the U.K. retail industry, Tesco (OTCPK:TSCDY) has agreed to buy the country's largest food wholesaler Booker (OTCPK:BOKGY) for £3.7B, claiming it will realize cost synergies of at least £175M. Britain's largest supermarket also said it plans to restart paying dividends in fiscal 2018, reflecting the company's improved performance. It last paid a dividend in December 2014.

European earnings roundup: UBS -2.7% premarket after annual net profit nearly halved to 3.3B Swiss francs, negatively impacted by client sentiment and trading volumes. Separately, heads are rolling at BT Group (NYSE:BT), as the chief of Continental Europe resigned amid the company's Italian accounting scandal. Quarterly results met estimates, but were overshadowed by this week's profit warning. BT -1% premarket.

Facing cost overruns at its U.S. nuclear division, Toshiba (OTCPK:TOSYY) has approved plans to spin off its memory chip unit at the end of March and sell a stake in the new business. Toshiba estimates the value of the unit at ¥1T-¥1.5T ($9B-$13B), according to Reuters, and plans to announce a huge nuclear writedown on Feb. 14, when it reports quarterly results.

Lawyers for Martin Shkreli and his co-defendant Evan Greebel have confirmed the duo wants separate juries. If Judge Kiyo Matsumoto agrees, the "pharma bro" would be tried first starting June 26, while Greebel's trial would begin in October. Shkreli is accused of looting the pharmaceuticals firm he previously headed, Retrophin (NASDAQ:RTRX), to pay off hedge fund investors whom he allegedly had defrauded.

Running out of time? Walgreens (NASDAQ:WBA) and Rite Aid (NYSE:RAD) will likely keep their merger agreement if the tie-up doesn't land regulatory approval by today's deadline. At a meeting with investors, CEO Stefano Pessina said the companies were discussing "all instruments and actions" they could put in place to win approval from the FTC. The $9.4B deal would result in a drugstore chain with more than 10,000 U.S. stores.

Sears tumbled more than 9% to under $8 per share on Thursday, sending the company's stock to its lowest price since its merger with Kmart back in 2004. The decline piled on to a 7% drop in Sears' (NASDAQ:SHLD) shares a day earlier, when Fitch Ratings called attention to the chain's "significant" cash burn. The company also ended up at the top of a Bloomberg Intelligence list of retailers with the highest risk of bankruptcy.

Two years after raising minimum wages for store employees to $9 per hour, Wal-Mart (NYSE:WMT) is making adjustments to the way it hands out pay increases and trains store staff. The retailer will abbreviate a program that new employees must complete to earn $10 per hour and will implement pay hikes based on hiring anniversary dates. The average salary at Wal-Mart is now $13.69 per hour. WMT +1.3% premarket.

Peabody Energy has received U.S. bankruptcy court approval today for its disclosure statement, as well as plan support, private placement and backstop commitment agreements. The court approval will allow Peabody (OTCPK:BTUUQ) to begin soliciting votes for its plan of reorganization ahead of a March 3 voting deadline and a March 16 hearing to consider confirmation of the plan.

Now that it has completed its acquisition of Starz (NASDAQ:STRZA), Lionsgate (LGF.A, LGF.B) has kicked off the process to sell its 31.2% stake in Epix to the joint venture's other partners, MGM (OTC:MGMB) and Paramount (VIA, VIAB). Any deal would likely value Epix, which comes with an online streaming service, somewhere between $1B-$2B, sources told Reuters. Epix, whose shows include Berlin Station and Graves, has about 14M subscribers.

Facebook is giving users a new way to keep their social network accounts secure. It's introducing a new form of two-factor authentication that relies on hardware dongles - a physical key - in addition to passwords. Facebook (NASDAQ:FB) will use two types - USB keys that can slide into a laptop with touch activation, and NFC keys that can communicate with wireless chips built into Android devices.

Thursday's Key Earnings

Alphabet (NASDAQ:GOOG) -2.1% AH earnings miss, higher costs.
Baker Hughes (NYSE:BHI) -0.6% on a fourth-quarter loss.
Blackstone (NYSE:BX) +2% as profit nearly doubled.
Biogen (NASDAQ:BIIB) +2.1% on positive guidance for 2017.
Bristol-Myers (NYSE:BMY) -5.5% slashing its outlook.
Caterpillar (NYSE:CAT) -1% dipping on softer guidance.
Celgene (NASDAQ:CELG) -2.2% after acquiring Delinia.
Comcast (NASDAQ:CMCSA) +2.8% boosting its buyback, dividend.
Dow Chemical (NYSE:DOW) +2% after topping estimates.
Ford (NYSE:F) -3.3% seeing lower 2017 profits.
Intel (INTC) +0.1% AH on strong holiday sales.
JetBlue (NASDAQ:JBLU) -3.1% expecting soft January revenues.
Microsoft (MSFT) +1.4% AH buoyed by its cloud business.
PayPal (NASDAQ:PYPL) -0.6% AH with uninspiring Q1 guidance.
Potash (NYSE:POT) -3% on weak fertilizer prices.
Southwest (NYSE:LUV) +9% with record earnings in 2016.
Starbucks (NASDAQ:SBUX) -4% AH on light comparable sales.
VMware (NYSE:VMW) +3.9% AH following strong Q4 results.

Today's Markets

In Asia, Japan +0.3%. Hong Kong -0.1%. China +0.3%. India +0.6%.
In Europe, at midday, London +0.1%. Paris -0.4%. Frankfurt -0.2%.
Futures at 6:20, Dow flat. S&P flat. Nasdaq flat. Crude -0.6% to $53.44. Gold -0.4% to $1184.70.
Ten-year Treasury Yield flat at 2.51%

Today's Economic Calendar

8:30 GDP Q4
8:30 Durable Goods
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count