Airbus scraps the A380; Nestle turnaround; US-China trade talks
Posted February 14, 2019 5:02 a.m. EST
CNN — 1. The A380 is dead: Airbus has announced the end of its A380 program after the superjumbo jet failed to deliver on outsized expectations.
Shares in Airbus were up 5% in Paris after the company announced the A380 news and said its profits grew 30% over the previous year in 2018.
The European plane maker announced it will stop delivering A380s in 2021 after its key customer, Dubai-based airline Emirates, slashed its orders for the huge jetliner.
"It's a painful decision," Airbus CEO Tom Enders said during a conference call with analysts. "We've invested a lot of effort, a lot of resources and a lot of sweat into this aircraft."
"But obviously we need to be realistic," he added. "With the decision of Emirates to reduce orders, our order backlog is not sufficient to sustain production."
2. Nestle turnaround: Shares in Nestle jumped more than 3% after the Swiss food company said its sales grew 3% in 2018 compared to a year earlier.
The maker of KitKat, Smarties and Nespresso has struggled in recent years to keep up with changing consumer tastes. But it said Thursday that a shift to growth areas such as plant-based products was paying off.
"We saw revived growth in our two largest markets, the United States and China, as well as in our infant nutrition business," CEO Mark Schneider said in a statement.
3. Trade talks: A third round of high-level trade talks between the United States and China is underway in Beijing.
Talks between US Trade Representative Robert Lighthizer, US Treasury Secretary Steven Mnuchin and China's Vice Premier Liu He could yield a breakthrough that would prevent higher tariffs on $200 billion of Chinese goods.
Investors have been optimistic about the negotiations, especially after President Donald Trump said he would be willing to stretch his March 1 deadline if it appeared the two sides are close to a deal.
4. Global market overview: US stock futures were pointing higher.
European markets mostly opened with gains, while stocks in Asia struggled to find direction.
The Dow Jones industrial average closed up 0.5% on Wednesday, well off its session highs. The S&P 500 added 0.3% and the Nasdaq gained 0.1%.
Before the Bell newsletter: Key market news. In your inbox. Subscribe now!
5. Earnings and economics: Canada Goose, Coca-Cola and Six Flags will release earnings before the open.
CBS, Ellie Mae and NVIDIA will release earnings after the close.
The US Census Bureau will publish its retail sales report for December at 8:30 a.m. ET.
Germany has narrowly avoided a recession by posting 0% growth in the fourth quarter. Economists are hopeful that Europe's biggest economy will recover its momentum, but there are major risks ahead.
"While the risks loom large, chances are that a brighter spring could still follow the grey winter if trade tensions do not escalate badly, China escapes a hard landing and the UK avoids a hard Brexit," economists at Berenberg bank wrote in a note to clients.
6. Coming this week:Thursday — US holiday retail sales; Coca-Cola, CBS, Nvidia report earningsFriday — Newell Brands and Pepsi report earnings