1. ‘B’ is for Brexit: The U.K. is set to formally begin the two-year process of extracting itself from the European Union, a bloc of 28 nations with free trade and virtually open borders.
The U.K. voted to withdraw from the EU in a hotly contested and controversial referendum last June.
“Divorce” proceedings cannot begin until the British government formally informs the EU that it’s triggering Article 50 of the Lisbon treaty. That’s expected around 7.30 a.m ET. Prime Minister Theresa May was photographed signing the Article 50 letter on Tuesday night.
The British pound has crashed following the Brexit referendum. It had been trading at $1.50 just before the referendum results came out; now it’s at $1.24. It’s been weakening a fair bit since Tuesday, and hasn’t been helped by news that Scotland wants a new referendum on independence from the U.K.
Traders are nervous about Britain’s prospects for securing a good Brexit deal with the EU. Business leaders are hoping to preserve as much free trade as possible to avoid the introduction of new tariffs and regulatory red tape.
2. Global market overview: Global stock markets are mostly climbing Wednesday.
U.S. stock futures are edging up.
European markets are mostly rising in early trading. The FTSE 100 index in London is inching higher, though it’s not performing as well as other major European markets.
Asian markets ended the session with mixed results. All the Chinese indexes posted losses.
This comes after a positive Tuesday for the Dow Jones industrial average, S&P 500 and Nasdaq. Each index rose by 0.6% to 0.7%.
3. Toshiba’s woes: Westinghouse Electric is filing for bankruptcy, according to its Japanese owner Toshiba.
Toshiba has been hit with billions of dollars of losses from problems at Westinghouse’s nuclear operations.
The Chapter 11 bankruptcy filing allows Toshiba to limit exposure to future losses at Westinghouse.
The Japanese firm said in a statement Wednesday that Westinghouse will no longer be under its control and will be deconsolidated from its financial results.
4. Samsung’s new phone: The Samsung Galaxy S8 will be released on Wednesday around 11 a.m ET. The new phone is expected to feature a sleek redesign.
The complete recall of the fire-prone Galaxy Note 7 means Samsung needs a flawless rollout of the new Galaxy S8. Experts say Samsung can bounce back, but there is no room for error.
5. Earnings and economics: Lululemon athletica is among the highest profile companies that will release earnings Wednesday. The results will come out after the close.
The U.S. Energy Information Administration will release weekly crude inventories data at 10:30 a.m. ET. These reports are known to move markets when there is more or less crude than expected.
6. Coming this week:
Wednesday – Samsung launches new Galaxy S8 smartphone; U.K. set to trigger Brexit negotiations; Lululemon earnings
Thursday – U.S. Bureau of Economic Analysis releases updated GDP report for fourth quarter; H&M earnings
Friday – Blackberry earnings; Final day of the first quarter of 2017