Three of the four biggest U.S. banks - JPMorgan (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) - will kick off earnings season this morning. Wall Street is expecting a mixed batch of figures after having cut their profit forecast in recent weeks, along with the usual seasonal drop-off in trading income for the second quarter. However, the banks' biggest cash distributions since the financial crisis has helped the sector add almost 10% in market value since the start of June.

Economy

It's a big day for economic data. The latest CPI figures are coming out, as well as the newest reading on retail sales. Both are forecast to pop into positive territory for June after negative figures in May. Investors also expect a boost to industrial production numbers and are looking ahead to data on consumer sentiment and business inventories

Two Republican senators have rejected the party's latest healthcare bill, leaving the party no margin for additional defections as Majority Leader Mitch McConnell seeks a vote next week to replace Obamacare. Unlike earlier versions, the bill would allow insurers to sell cheaper, less comprehensive plans. It also allows people to use health savings accounts to pay insurance premiums and retains two of the ACA's taxes on high-income households.

Real monthly federal spending topped $400B for the first time in June, when the Treasury spent a record $429B, according to the most recent Monthly Treasury Statement. As the Treasury was spending the record figure, it was taking in approximately $339B in taxes - thus, running a deficit for the month of $90B.

"Something could happen with respect to the Paris accord, we'll see what happens," President Trump said in a joint press conference with French counterpart Emmanuel Macron. "We will talk about that over the coming period of time, and if it happens - that would be wonderful, and if it doesn't - that will be okay too." The U.S. withdrew from the agreement last month, citing disadvantages to U.S. business.

Britain has for the first time explicitly acknowledged it has financial "obligations to the EU" after Brexit, a move that is likely to avert a clash over the divorce bill in talks next week. The exit liabilities - estimated by the EU to stand at up to €100B gross - were proving to be one of the biggest flashpoints, sparking a war of words over the payments.

Mexican industry is exploring revising trade rules to ensure U.S. workers benefit from a renegotiated NAFTA. "If we integrate further and make Mexico more competitive versus China... even if our exports rise, U.S. jobs will rise, because when we export (to the U.S.), they're exporting too (via U.S. content)," said Jaime Serra, a former trade minister who led the initial NAFTA negotiations for Mexico.

Frustrated that China has not done more to rein in North Korea, the Trump administration is weighing new sanctions on small Chinese banks and other firms doing business with Pyongyang. The measures would initially hit Chinese entities considered "low-hanging fruit," including smaller financial institutions and "shell" companies, but would leave larger Chinese lenders untouched for now.

Hong Kong Chief Executive Carrie Lam has acknowledged that there are concerns over certain "individual incidents" in the city and it was her duty to accurately reflect them to the central government in Beijing. Lam was speaking in her first interview with the international media since she was sworn in as the city's new leader on July 1.

A federal judge in Hawaii has further weakened an already diluted U.S. travel ban by vastly expanding the list of family relationships that visa applicants can use to get into the U.S. Those include grandparents, in-laws, cousins and other close relatives. The ruling also states the government may not exclude refugees who have formal assurance of placement services from a resettlement agency in the U.S.

Stocks

AT&T is planning major organizational changes to follow its $85.4B acquisition of Time Warner (NYSE:TWX), Bloomberg reports. Randall Stephenson will drop the CEO title he has held for 10 years and become executive chairman, overseeing a pair of CEOs who will independently manage the company's telecom and media businesses. The news comes as consumer groups urge Attorney General Jeff Sessions to block AT&T's (NYSE:T) deal.

It's deadline day for Fox's (FOX, FOXA) acquisition of Sky (OTCQX:SKYAY). According to Reuters, owner Rupert Murdoch is unlikely to offer any new concessions to protect the editorial independence of Sky, raising the odds of an investigation into the $15B merger. Britain's media secretary Karen Bradley previously said the takeover would give Murdoch too much media influence.

Streaming media company Roku has hired underwriters and is expected to file for its initial public offering in coming weeks, WSJ reports. Unicorn status? It's looking for a valuation of about $1B, though it's facing a tough environment after high-profile difficulties faced by the likes of Blue Apron (NYSE:APRN) and Snap (NYSE:SNAP) this year. ROKU could file confidentially in the next few weeks.

With the U.S. wireless market becoming increasingly competitive, Sprint (NYSE:S) is launching new options aimed at price-sensitive customers. The No. 4 U.S. wireless carrier will now allow subscribers to lease any phone, with the choice of upgrading it after a year. The option was previously only available for iPhones and Galaxy devices.

Facing challenges from antitrust authorities, FanDuel (Private:DUEL) and DraftKings (Private:DRAFT) have decided to scrap their merger after determining it was in the "best interest of our shareholders, customers, employees and partners." In June, the Federal Trade Commission said a merger would put one company in control of more than 90% of the U.S. sports fantasy market.

Vanguard is getting its fourth chief executive since it was founded four decades ago. Current chairman and CEO William McNabb will step down in January and be succeeded by long-time company insider Tim Buckley. Vanguard is one of the world's biggest fund managers, with $4.4T in assets, and popularized the concept of low-cost index fund investing.

Arconic -1% premarket after being sued in United States over the fire at Grenfell Tower. The suit accuses the company of defrauding shareholders over its supply of cladding panels used at the London high-rise, where at least 80 people died in a blaze last month. The proposed class action complaint was filed in Manhattan, where Arconic (NYSE:ARNC) is based.

U.S. steel imports are in focus as President Trump considers quotas, tariffs or "maybe both." "Steel is a big problem. We're like a dumping ground and I'm stopping it," he said aboard Air Force One yesterday en route to France. Industrial metal stocks rallied on the comments, with AK Steel (NYSE:AKS) closing more than 7% higher. X, NUE, CLF, MT, CMC, STLD, RS, SCHN, TMST, WOR

Eni's plans to drill for oil in federal waters offshore Alaska has been approved by the U.S. Bureau of Ocean Energy Management, the latest step in President Trump's strategy to increase U.S. oil and gas drilling. The approval is conditional on Eni (NYSE:E) getting other state and federal permits, which typically are granted once the Bureau gives its approval.

Uber seems to have met its match in Russia, merging its business with local competitor Yandex, commonly referred to as the "Google of Russia." A new joint venture between the two will be valued at approximately $3.7B. It's the latest following a series of price wars abroad. In August 2016, UBER sold its China unit to Didi Chuxing (Private:DIDI) in exchange for a 20% stake and promised investment.

Today's Markets

In Asia, Japan +0.1%. Hong Kong +0.2%. China +0.1%. India -0.1%.
In Europe, at midday, London -0.2%. Paris +0.2%. Frankfurt flat.
Futures at 6:20, Dow flat. S&P -0.1. Nasdaq flat. Crude +0.8% to $46.43. Gold +0.2% to $1219.20.
Ten-year Treasury Yield -1 bps to 2.34%

Today's Economic Calendar

8:30 Consumer Price Index
8:30 Retail Sales
9:15 Industrial Production
10:00 Business Inventories
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count