"We are focused on executing against the plan we've laid out to improve GE's performance," General Electric (NYSE:GE) said in a statement after getting dropped from the Dow - and replaced with Walgreens (NASDAQ:WBA). "Today's announcement does nothing to change those commitments or our focus in creating a stronger, simpler GE." The industrial conglomerate has been the worst performing stock in the index - where it was an original member in 1896 and a member continuously since 1907 - falling 55% over the last 12 months, and more than 25% YTD. GE -3.1% premarket.

Economy

President Trump has threatened a further $200B in tariffs on Chinese products should Beijing hit back again, bringing to $450B the potential amount that could be targeted. That sum approaches the roughly $500B in total annual Chinese exports to the U.S. As the trade war unfolds, the Trump administration is also working on measures that protect agriculture and other critical industries from retaliatory tariffs being threatened by China.

Calling for investors to "stay calm and rational," the PBOC injected a total of about $37B into its financial system after the Shanghai Composite dropped to near two-year lows. According to China's central bank, this will "ensure liquidity and reasonable stability" amid trade threats from the U.S. It also recommended a reserve ratio requirement cut as mainland companies pledged to stock buybacks to help stabilize equity prices.

The U.S. has announced its departure from the U.N. Human Rights Council, stating the body was "a protector of human rights abusers and a cesspool of political bias," a day after the body's chief denounced the separation of migrant children from their parents. President Trump also said he wants to cut off aid to countries that "abuse" the U.S. by sending "not their best" people to its border.

"We are, broadly speaking, opening a new chapter," declared Germany's Angela Merkel as she met with France's Emmanuel Macron for talks on reforming the eurozone. "Our goal is to keep Europe from becoming more divided." The two agreed to a common eurozone budget - hoped to be in place by 2021 - but details of how they would pursue closer EU coordination on the economy, security and refugee policies remained vague.

British MPs will vote today on amendments to the EU Withdrawal Bill that would give parliament a meaningful vote on the outcome of Brexit negotiations. The legislation will set out how much power lawmakers will have if the government fails to agree on a departure deal with the EU before March 2019, influencing Theresa May's entire negotiation strategy.

"Oil is not a weapon - it is not a political tool to be used against some countries, producers or consumers," Iranian Oil Minister Bijan Zanganeh declared, following tweets from President Trump that sought to hold OPEC accountable for an upswing in oil prices. Ahead of a closely watched meeting in Vienna, Saudi Arabia and Russia have been pushing the group to loosen its supply controls - introduced in January 2017 - while Iran, Iraq and Venezuela are lobbying against any changes.

Stocks

Cryptocurrencies fell overnight after another South Korean exchange, called Bithumb, was hacked, following last week's heist at Coinrail. This time around some more popular coins were taken, including Ripple, with hackers looting about 35B won ($32M). While the stolen coins will be covered by Bithumb's reserves, the announcement renews concerns about the safety of crypto trading venues.

With consolidation taking place in the media industry, Hulu CEO Randy Freer subtly heckled rival Netflix (NASDAQ:NFLX) for its content spending. "I think money is a relative term. I think it's how you spend that is really important. We are not going to make 800 shows next year, we'll probably make 20 or 25," he told CNBC. Upcoming tensions? Disney (NYSE:DIS), 21st Century Fox (NASDAQ:FOX) and Comcast (NASDAQ:CMCSA) all own equal stakes in Hulu, but should Comcast or Disney acquire Fox's assets, the winner will also become Hulu's majority owner.

Meanwhile, Disney is turning to the directors of two of its biggest recent hits to take over its animation divisions in the wake of John Lasseter’s exit from the company. Pete Docter, the writer and director of Up and Inside Out, will be chief creative officer of Pixar Animation Studios, while Jennifer Lee, the co-director of Frozen, will assume the same role at Walt Disney Animation Studios (DIS).

Tech roundup: Looking to expand its presence in the hospitality industry, Amazon (NASDAQ:AMZN) is partnering with Marriott (NYSE:MAR) to help increase guest access to amenities with Alexa. Verizon (NYSE:VZ), AT&T (NYSE:T) and Sprint (NYSE:S) have also pledged to stop selling the locations of individual customers to middlemen amid accusations of mishandled information and fears of data breaches.

While they don't plan to take equity stakes in each other, Volkswagen (OTCPK:VLKAY) and Ford (NYSE:F) have confirmed that they are exploring a strategic alliance designed to strengthen their competitiveness and better serve customers globally. The two automakers hope to work on joint development of a range of commercial vehicles, as well as other projects, and will share updates as talks progress.

Starbucks shares fell 4.7% in extended trading on Tuesday after the coffee chain lowered its Q3 sales forecast. The company further said it would slow the number of licensed stores it opens and close underperforming company-operated locations in densely populated areas. Starbucks (NASDAQ:SBUX) generally closes about 50 of these stores per year, however in 2019 it expects to close about 150.

CVS Health is rolling out delivery for prescription drugs nationwide as it braces for a possible disruption from Amazon (AMZN). Its 9,800 pharmacies will offer the next-day service for $4.99 and same-day deliveries in select urban markets for a higher fee. CVS will also deliver other items, including cold medication, vitamins, and allergy medication.

Canada's upper house of parliament has approved a revised bill to legalize recreational marijuana within eight to 12 weeks. As the first G7 economy to fully legalize pot, Canada's regulatory rollout will be closely watched by other nations considering the same path - and by global investors, who have already poured billions into Canadian cannabis firms.

Tuesday's Key Earnings

FedEx (NYSE:FDX) -0.4% AH amid U.S.-China trade tensions.
Oracle (NYSE:ORCL) -3.7% AH following weak guidance.

Today's Markets

In Asia, Japan +1.2%. Hong Kong +0.8%. China +0.3%. India +0.7%.
In Europe, at midday, London +1.3%. Paris +0.4%. Frankfurt +0.5%.
Futures at 6:20, Dow +0.5%. S&P +0.3%. Nasdaq +0.3%. Crude -0.1% to $64.86. Gold -0.3% to $1274.40. Bitcoin -1.7% to $6624.
Ten-year Treasury Yield flat at 2.9%

Today's Economic Calendar
7:00 MBA Mortgage Applications
8:30 Current Account
9:30 Jerome Powell: “Monetary Policy at a Time of Uncertainty and Tight Labor Markets”
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories