America's banks start the profit season with a bang

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The busy earnings season starts off seriously this week – and investors already have a lot to celebrate.

A healthy US economy strengthens American banks despite lower interest rates that weigh on their credit gains. JPMorgan Chase (JPM)The largest US bank reported a record quarter on Tuesday that exceeded Wall Street forecasts and the stock rose 1.2%. Citigroup (C) also exceed expectations. The company's share rose by 1.6%.
Against the trend: Wells Fargo (WFC) closed more than 5%. The bank's new CEO, Charles Scharf, said regulatory problems have caught his eye after a series of scandals, though his team is "beginning to find a way" to improve the company's financial results.
The results are good for the rest of the week. Bank of America (BAC) and Goldman Sachs (GS) should report on Wednesday. Morgan Stanley (MRS) will follow on Thursday.

Soothing investors: the continued strength of American consumers. JPMorgan Chase made solid deposit gains and increased auto loan and other consumer goods revenue. It also helps that banks have a clearer picture of future interest rates.

"The US consumer is still in very good shape," JPMorgan CFO Jennifer Piepszak told analysts Tuesday. Although business spending remains "a bit weak," the mood is "definitely better" than it was six months ago, she added.

UBS announced on Wednesday that it has raised its expectations for earnings growth in the US this year. The Swiss bank expects the results to better reflect the strength of the American economy after a relative decoupling in 2019 and to push up share prices.

"We are seeing that the coming reporting season is a turning point for US companies after a period of weak earnings growth," said Mark Haefele, chief investment officer at UBS Global Wealth Management.

The US and China will sign a trade agreement. But what's in it?

President Donald Trump is expected to sign a preliminary trade deal with leading Chinese politicians on Wednesday. My CNN business colleague Donna Borak reports that the document in question has not yet been finalized.
The United States keeps the text of the China Trade Agreement under wraps until it is signed

The public absence of the text, valued at more than 80 pages, opens the door to a "tricky" response from markets, "when the final details of the signed contract put pressure on investors," said Han Tan, FXTM market analyst, a currency broker, customers said Wednesday. According to Tan, optimism is "largely priced in".

What we have: US and Chinese officials have repeatedly described the agreement across-the-board, citing Beijing's pledges to exceed previous intellectual property theft commitments and US companies to hand over their technology and make a purchase commitment from China Forcing US $ 200 billion worth of agricultural goods and other products for two years.

The lack of detail in the deal has left a number of questions: what exactly has China made? How is the deal enforced? When will it take effect? Will China change its laws? And how will one of the two countries determine whether the other country does not comply with the regulations?

The latest: Bloomberg reports that existing US multi-billion dollar US tariffs on Chinese imports are likely to continue until after the US presidential election. But Treasury Secretary Steven Mnuchin is pushing this back, telling reporters that Trump will re-evaluate after hitting a "phase two" agreement.

What is clear: despite an obvious ceasefire, the struggle between the United States and China is not over.

Airbus stole Boeing's throne

It's official: Airbus, not Boeing (BA)is now the world's top aircraft manufacturer.

Boeing, which announced final order numbers and deliveries for 2019 on Tuesday, reported more cancellations in 2019 than new business. Orders for the year fell 74% to 243, while deliveries fell 53% to 380.

Boeing was far behind its European rival. Last week, Airbus reported record shipments of 863 jets, an increase of 8%. Order intake rose 2% to 768.

My CNN business colleague, Chris Isidore, points out that Boeing had a particularly strong year in 2018, and orders for the 737 Max aircraft, which had crashed to the ground after 346 deaths after two crashes, would probably have had no problem was. However, the numbers also underscore the challenge Boeing will face once the Max receives permission to fly again.

Next

Bank of America (BAC). BlackRock (BLK). Goldman Sachs (GS) and PNC (PNC) Report results before US markets open. The U.S. producer price index appears at 8:30 a.m.CET.

Tomorrow is coming: US retail sales for a busy December.