Morning Brief

What to watch today: A third rate cut in place, China doubts the deal, and Peugeot, Fiat make it official

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BY THE NUMBERS

U.S. stock futures were falling before the final session of October, following a Bloomberg report that Chinese officials were unsure they could reach a comprehensive long-term trade deal with the United States. Futures had started Thursday on a positive note a day after the Federal Reserve cut interest rates by 25 basis points for the third time this year.

* S&P 500 closes at a record as Fed signals no rate hikes until inflation rises 'significantly' (CNBC)

Federal Reserve Chairman Jerome Powell said Wednesday that the central bank would need to see a sustained and significant uptick in price pressures before considering future rate hikes. He also detailed the Fed's decision to cut interest rates for the third time in 2019, saying that officials "see the current stance of monetary policy as likely to remain appropriate." (CNBC)

It's a busy day for economic numbers, starting at 8:30 a.m. ET with the release of initial jobless claims, personal income, and consumer spending. The Chicago Purchasing Managers index comes out at 9:45 a.m. ET. (CNBC)

Earnings reports out this morning include Altria (MO), Avis Budget (CAR), Bristol-Myers Squibb (BMY), Cigna (CI), Clorox (CLX), Dunkin' Brands (DNKN), DuPont (DD), Estee Lauder (EL), Hanesbrands (HBI), Intercontinental Exchange (ICE), Marathon Petroleum (MPC), Sirius XM (SIRI), Tempur Sealy (TPX) and Kraft Heinz (KHC). After-the-bell reports include Celgene (CELG), El Pollo Loco (LOCO), U.S. Steel (X) and Western Union (WU).

Apple (AAPL) and Facebook (FB) each beat market expectations in quarterly results released after the market closed on Wednesday, and their stocks were moving higher in after-hours trading. (CNBC)

* Apple is laying the groundwork for an iPhone subscription (CNBC)

IN THE NEWS TODAY

Lead negotiators from the U.S. and China will hold trade talks on the phone Friday. The news comes after Chile canceled the Asia-Pacific Economic Cooperation summit because of domestic unrest. President Donald Trump and President Xi Jinping were expected to meet at the summit, to discuss a potential "phase one" trade agreement between the world's two largest economies. (CNBC)


Treasury Secretary Steven Mnuchin said it will take time for Chinese purchases of U.S. agricultural goods to "scale up" to the $40 billion to $50 billion annual level touted by Trump if the two sides can seal a "Phase 1″ trade deal. The $40 billion to $50 billion target is "a lot," he said, but is based on "very specific discussions" of product purchase commitments by China. (Reuters)

House Democrats have asked Trump's former national security advisor John Bolton to testify in their impeachment probe on Nov. 7. The top lawyer for the National Security Council, John Eisenberg, has been called to testify next Monday, as has Michael Ellis, another lawyer for the council that advises presidents on security and foreign policy issues. (CNBC)

* Former Trump advisor next in line to be asked about Ukraine (AP)

Democrats have set the stage for certain House approval of the ground rules lawmakers will use when they consider impeaching Trump as the chamber braced for its first showdown over the inquiry. There's no doubt the Democratic-controlled body would approve the eight pages of procedures Thursday, with each side likely to lose a handful of defectors, if any. (AP)

Peugeot and Fiat Chrysler (FCA) on Thursday confirmed their intention to merge, in what would be a 50-50 share swap and create the world's fourth-largest carmaker. The proposed tie-up would reportedly create an industry behemoth with vehicle sales of nearly 9 million and a combined 400,000 employees. (CNBC)

Ford Motor (F) and the United Auto Workers reached a tentative deal on a new labor contract Wednesday night without a strike. The four-year deal includes $6 billion in new investments from Ford and the creation or retention of 8,500 U.S. jobs, according to the union. (CNBC)

Twitter (TWTR) is axing political ads from its site, CEO Jack Dorsey said. The move sets Twitter in stark contrast to Facebook (FB), which has received criticism from lawmakers and its own employees in recent weeks over its policy to neither fact check nor remove political ads placed by politicians. (CNBC)

Santa Ana winds were expected to linger for a final day Thursday after driving more than a dozen wildfires through California, sending thousands fleeing. Firefighters managed to tamp down or at least partially corral fires that for the past few days surged through tinder-dry brush, though much of LA and Ventura counties remain under a red flag warning. (AP)

STOCKS TO WATCH

Starbucks (SBUX) matched Wall Street estimates with adjusted quarterly profit of 70 cents per share, with the coffee chain's revenue above analyst forecasts. Global comparable store sales grew a better-than-expected 5%, helped by a jump in cold drink sales.

Lyft (LYFT) posted smaller-than-expected losses for its latest quarter. The ride-hailing service's revenue exceeded expectations, and Lyft said it anticipated reaching profitability in about two years.

Etsy (ETSY) matched Street forecasts with quarterly profit of 12 cents per share, while the online crafts marketplace saw revenue exceed Wall Street forecasts. Gross merchandise sales were up by more than 30%, but the company also saw gross margins decline by more than three percentage points.

WATERCOOLER

The Washington Nationals stunned the Houston Astros 6-2 in a winner-take-all Game Seven on Wednesday to secure their maiden Major League Baseball World Series title in a Fall Classic unlike any other. The victory set off celebrations in Washington, a city whose last World Series victory came in 1924 when the Senators defeated the New York Giants. (Reuters)