Big gains were seen in Asia overnight, with Shanghai climbing 1.8%, as President Trump said he was willing to "let slide" a March 2 deadline for resolving the U.S.-China trade conflict if negotiations were progressing well. The softer tone suggests the two sides are making headway on key issues like intellectual property theft and force technology transfers. Europe is up mildly on the news, while indications from U.S. equity futures signal gains back home, with the DJIA pointing to a 66 point advance.

Economy

The IEA has left its global demand growth forecast of 1.4M bpd for 2019 unchanged from its last report in January, stating the oil market will struggle to absorb fast-growing crude supply from outside OPEC, even with the group's production cuts and U.S. sanctions on Iran and Venezuela. "In 2019 the U.S. alone will grow its crude oil production by more than Venezuela's current output," the IEA added. "In quality terms, it is more complicated."

The U.S. national debt has passed a new milestone, topping $22T for the first time. It stood at $19.95T when President Trump took office on Jan. 20, 2017, but has been rising following the passage of a $1.5T tax cut and spending increases on domestic and military programs. The Trump administration contends that its tax cuts will eventually pay for themselves by generating faster growth, but economists are divided about the projection.

No-deal Brexit off the table? British lawmakers will face a stark choice between Theresa May's Brexit deal or a long extension to the March 29 deadline for leaving the bloc, the U.K.'s chief Brexit negotiator was overheard saying in a Brussels hotel bar. Meanwhile, U.K. inflation in January fell below the Bank of England's 2% target for the first time in two years, giving officials further reason to refrain from raising interest rates as Brexit fears grip the economy.

For all the worries that the trade war between the U.S. and China will knock out their economies, it increasingly looks like Europe is the biggest threat to global growth. The EU saw an annual fall of 2.7% in industrial production in the last month of 2018, according to Eurostat, marking the weakest pace since the financial crisis. Deteriorating demand is on investors' minds as the region finds itself squeezed between international and domestic drags.

Spain aims to close all seven of its nuclear plants between 2025 and 2035 as part of plans to generate all the country’s electricity from renewable sources by 2050. Current facilities are operated by Iberdrola (OTCPK:IBDRY), Endesa (OTCPK:ELEZY), Naturgy (OTCPK:GASNY) and EDP (OTCPK:EDPFY). Under a draft bill prepared last year, the government said it also aims to ban sales of petrol, diesel and hybrid cars from 2040.

Stocks

Today in Congress... T-Mobile (NASDAQ:TMUS) CEO John Legere is set to defend his company's $26B deal to buy Sprint (NYSE:S), highlighting the jobs it will create and how it will benefit the construction of the next generation of wireless networks. The deal to combine the No. 3 and No. 4 U.S. wireless carriers was approved by both companies' shareholders in October and has received national security clearance, but still needs approval from the DOJ and FCC.

The tech crackdown continues as Japan plans to set up a new watchdog to scrutinize big tech companies like Facebook (NASDAQ:FB) and Google (GOOG, GOOGL) amid growing concerns about competitive practices and the handling of personal data. The new body will also draw up new guidelines to evaluate whether mergers and acquisitions will lead to a monopoly on messaging or personal information, as well as make antitrust recommendations.

Publishers are resisting Apple's (NASDAQ:AAPL) subscription news service and the tech giant's plan to keep about 50% of subscription revenue, according to WSJ sources. The "Netflix for news" product is expected to launch later this year as a paid product within the Apple News app. Apple could charge around $10 per month for users to access unlimited content from participating publishers.

"Our goal is to continue to shrink the size of our stores," Sears (OTCPK:SHLDQ) Chairman Eddie Lampert said in his first interview since his rescue plan was approved by a bankruptcy court this week. He also plans to devote more retail space to tools and appliances, and less to apparel. The restructured company, which doesn't yet have a new corporate name, will be composed of 223 Sears and 202 Kmart locations, as well as the Kenmore and DieHard brands.

CVS Health has unveiled three new pilot stores in Houston, called HealthHUBs, that are part of the company's vision for its $70B acquisition of health insurer Aetna. In addition to the pharmacy, each CVS store has an expanded health clinic, with a lab for blood testing and health screenings. There are also wellness rooms for yoga and seminars, dietitians and respiratory specialists.

With an announcement possibly coming later this month, Amazon (NASDAQ:AMZN) and General Motors (NYSE:GM) are in talks to invest in Rivian Automotive, Reuters reports. The deal would value the electric truck manufacturer at $1B-$2B as it aims to be the first in the U.S. consumer market with an electric pickup. "We admire Rivian’s contribution to a future of zero emissions and an all-electric future," GM said in a statement.

Shift in strategy? Carlos Ghosn has replaced his chief defense attorney with hotshot lawyer Junichiro Hironak as he defends himself against accusations of financial misconduct. The former Nissan (OTCPK:NSANY) and Renault (OTCPK:RNLSY) chairman was refused bail on Jan. 11, when he was indicted with new charges, including aggravated breach of trust. He applied for bail again on Jan. 18, but remains in detention after the request was denied.

Brexit fallout... Ford (NYSE:F) is stepping up preparations to move production out of Britain and has alerted Theresa May to the plans, according to The Times. It says it will face a bill of up to $1B if Britain leaves the EU without a deal, echoing warnings from other carmakers. Ford, the top-selling automotive brand in the U.K., operates two engine plants in the country and employs about 13K people.

General Electric booked the most orders for electricity generating gas turbines in 2018 but fell to second place behind Mitsubishi Hitachi Power Systems for the largest and most advanced machines, according to data from McCoy Power Reports. Demand for gas turbines has been tumbling since 2011, stoking fierce competition for deals and factory closures. GE is in the midst of a multi-year restructuring of its power business, which lost $808M last year.

Giving the thumbs-up to dual-class share structures, MSCI has paved the way for Chinese smartphone maker Xiaomi (XI) and Tencent Music (NYSE:TME) to be included in its widely-followed indices. Dual-class structures have proved popular with U.S. and Chinese entrepreneurs, as the unequal split in voting power allows founders to keep a tight grip on the strategic direction of companies when they go public.

Tuesday's Key Earnings

Activision Blizzard (NASDAQ:ATVI) +3.4% AH on buyback, layoffs.
Groupon (NASDAQ:GRPN) -9.6% AH following a profit shortfall in Q4.
Molson Coors (NYSE:TAP) -9.4% hit by a decline in drinking.
Occidental Petroleum (NYSE:OXY) -1.4% AH despite beating estimates.
Shopify (NYSE:SHOP) +1.4% on strong sales growth.
Under Armour (NYSE:UA) +4.5% tightening up on costs.

Today's Markets

In Asia, Japan +1.3%. Hong Kong +1.2%. China +1.8%. India -0.3%.
In Europe, at midday, London +0.6%. Paris +0.3%. Frankfurt +0.2%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.4%. Crude +1.1% to $53.68. Gold flat at $1314. Bitcoin +0.1% to $3574.
Ten-year Treasury Yield flat at 2.68%

Today's Economic Calendar

7:00 MBA Mortgage Applications
7:15 Fed's Bostic: Monetary Policy and Economic Outlook
8:30 Consumer Price Index
8:45 Fed's Mester: Monetary Policy and Economic Outlook
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories
12:00 PM Fed's Harker: Economic Outlook
2:00 PM Treasury Budget