Cooperation

Global markets rally on as China agrees to cut some tariffs in half, and Tesla investors brace for another windy ride.

The Express | Insight Before the Bell By Caleb Silver, Editor in Chief & Deborah D'Souza, News Editor  Thursday's Headlines 1. Global markets steadily higher on trade concessions 2. Coronavirus becomes earnings weight 3. Madoff requests early prison release due to terminal illness 4. Casper's IPO turning into a restless sleep     Markets Today Global markets continue to rally on despite no let up in the spread of the coronavirus. As of Wednesday night, China says a total of 28,018 cases have been confirmed and 563 people have died in the country. Nineteen foreigners have been infected. Air France and KLM joined other airlines in suspending flights to China into mid-March, at the earliest. More companies with supply chain and retail exposure in China are warning of sales impacts due to the health emergency.   But investors are focused on on easing of tensions between China and the U.S. as Beijing is lowering tariffs on some U.S. goods by half next month. That may be a new signal of cooperation as China needs help keeping its trade deal promises in the midst of this health crisis. That should continue the momentum for the S&P 500, which hit a new record high yesterday and is pointing higher again this morning.    It's been a dizzying week for Tesla investors, and the road looks windy again today.   Happy Thursday. Headlines: China will halve retaliatory tariffs on U.S. goods worth $75 billion as part of the "phase one" trade deal. (See more below) Twitter shares are set to rise this morning on strong revenue growth and a rise in active users from 152 million vs. 147.5 million total expected.  Tesla has temporarily closed its stores in mainland China as of Sunday, Feb. 2, according to an online post from a company sales employee on that date. Shares of the electric car maker are set to fall again this morning after plummeting 17% yesterday, but not before rising 40% earlier this week.  Bernie Madoff is seeking an early release from prison on the grounds that he is dying from kidney disease and has 18 months to live. Madoff was convicted of the largest Ponzi scheme in history and is 10 years into a 150-year prison sentence. America pariah Huawei has sued Verizon in U.S. federal district courts for infringing patents. The companies failed to reach an agreement on license terms, says the Chinese firm. "Huawei is simply asking that Verizon respect Huawei's investment in research and development by either paying for the use of our patents, or refraining from using them in its products and services," said the statement. Qualcomm says the coronavirus outbreak may hurt handset demand and thereby impact its business. The chip maker widened and reduced the low end of its Q2 2020 guidance range during its latest earnings report where it beat estimates. It also revealed an ongoing EU antitrust investigation. Shares are around 2% lower in pre-market trading. Peloton shares are around 9% lower after the fitness company reported earnings. Loss was 20 cents instead of the 36 cents expected by analysts, and revenue grew 77% in a "robust" holiday period despite that ad. Investors remain concerned about revenue growth slowing and mounting losses. You can search "Pokemon vote" on Google to help decide the most popular monster species. The tech giant has partnered with The Pokémon Company to commemorate the day the first of the brand's games debuted in Japan in 1996. A vote for a Pokémon is a vote for Google's marketing business.   Get Ready for Today's Earnings: Uber Earnings: What to Look For         SPONSORED BY SMARTASSET Financial Advisor Mistakes to Avoid Choosing a financial advisor is a major decision that can determine your financial trajectory for years to come. SmartAsset offers tips on common mistakes to avoid. Learn More »           Image courtesy: Peanuts Worldwide/Giphy The Big Story Trade Truce on Valentine's Day The Jan. 15 phase one trade deal signing may seem like a long time ago considering the global health emergency facing China and its neighbors, but tariff rollbacks promised as part of it will kick in on Feb. 14.   Today the Chinese government said that extra 10% and 5% tariffs introduced on a list of American products in September 2019 will be halved. The tariffs meant to target Trump's support base were on products like soybeans, pork, beef, chicken, wheat, sorghum, cotton and crude oil. China's Ministry of Finance said the move was in response to the U.S. halving the 15% additional tariffs starting the same day, and "further adjustment will mainly depend on future development in the economic and trade relations between the two countries." It added that work on tax exemptions for U.S. imports will continue.   China is dealing with a costly health crisis and concerns about its ability to increase U.S. imports as promised are growing. Brookings Institution also warned that since China has a state-led, controlled economy, it could turn on and off this "spigot" of new demand, wreaking havoc on U.S. exporters who need long-term certainty.   Trump's plan to cut the trade deficit however appears to be working. The U.S. international trade deficit fell last year for the first time since 2013. According to a new report from the Commerce Department, it dropped from $627.7 billion in 2018 to $616.8 billion in 2019. The deficit with China specifically decreased $73.9 billion to $345.6 billion. Exports to China fell $13.5 billion and imports from the country fell $87.4 billion.     Image courtesy: U.S. Bureau of Economic Analysis     Image courtesy: Casper Sleep The Small Number: $12 per share That's the new price at which Casper Sleep has priced its IPO. This amount is at the lower end of the $12 - $13 range published in an amended S-1 yesterday, which was itself slashed from the $17 - $19 range given on Jan. 27.   The IPO price values the sleep-focused startup at $475.6 million, which is 56% lower than the $1.09 billion valuation it commanded in its last private funding round. PitchBook data says this makes it the 12th-largest IPO haircut since the year 2000. Square's $3.08 billion drop in 2015 is No. 1. The former unicorn will be offering 8,350,000 shares of common stock when it begins trading on the New York Stock Exchange today under the ticker symbol "CSPR."    As seen in the chart below, Casper expects to report a net loss of between $96.4 million and $91.4 million in 2019. This is after net losses of $92.1 million and $73.4 million in 2018 and 2017, respectively. Considering how shares in other loss-making companies like Uber, Snap and Lyft have fared since they IPO'd, executives and shareholders are probably not sleeping that soundly.     Image courtesy: Casper Sleep More coverage: 3 Charts That Suggest Financial Markets Are Headed Higher While many retail investors are expecting a trend reversal after recent gains, patterns suggest that the markets could be headed higher. Read Now »   Construction Machinery Stocks Dig in at Support Buyers returned to construction machinery stocks at key support levels Tuesday. Play for a rebound in these three large-cap leaders. Read Now »   Macao Casino Stocks Could Offer Profitable Short Sales Macao casino stocks have bounced in the past week but are likely to reverse and test January lows. Read Now »   Tax Credits That Can Get You a Refund Here are a few of the federal tax credits that you may be eligible for, even if you owe no taxes this year you could still receive a refund check. Read Now »   How can we improve The Express? Tell us at theexpress@investopedia.com Enjoy The Express?  Copy and share the link below to invite friends to sign up: https://link.investopedia.com/join/53o/00-fwd-theexpress CONNECT WITH INVESTOPEDIA Email sent to:  geezers.mail@gmail.com. To view online click here . To update your newsletter preferences or unsubscribe, click here.   114 West 41st St, floor 8 New York NY 10036 © 2020, Investopedia, LLC. All Rights Reserved | Privacy Policy