Turkey hits back; Tencent earnings; Sears offer

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1. Trade escalation: Turkey has announced heavy new retaliatory tariffs on some American products, including cars, alcohol and tobacco.

The country has doubled its retaliatory tariffs on American cars to 120% and on alcoholic drinks to 140%, according to a notice published Wednesday. Other affected products include fruit, coal, paper and rice.

Relations between Washington and Ankara have rapidly soured in recent weeks over Turkey's detention of an American pastor. The Trump administration announced plans on Friday to double US tariffs on imports of steel and aluminum from Turkey.

The political spat with Washington has added to pressure on Turkey's currency, the lira, which has plunged against the dollar this year. It recovered some ground on Wednesday, but is still down over 35% in 2018.

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2. That sinking feeling: US stock futures were lower.

European markets were little changed. Most Asian markets ended with losses. The Shanghai Composite dropped 2.1%.

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3. Tracking tech and retail: Chinese tech conglomerate Tencent (TCEHY), which owns the popular chat app WeChat, will publish its results on Wednesday.

It reported massive earnings last quarter, but analysts don't expect a repeat performance. They're worried about slowing growth and overall weakness in the tech sector.

Shares in Tencent dropped more than 3% in Hong Kong on Tuesday after Chinese regulators banned a game called Monster Hunt World, for which big sales were expected. The company said in a notice to players that some game content does not fully comply with government regulations.

Cisco (CSCO) reports after the close, and investors expect a comeback.

Macy's (M) will release earnings before the open. Competitors JCPenney (JCP), Nordstrom (JWN) and Walmart (WMT) will follow on Thursday.

4. Stocks to watch — Sears, Alphabet, RBS: Sears (SHLD) is in focus after Eddie Lampert, the CEO and majority shareholder of the struggling retailer, said he's willing to pay his company $400 million to buy its Kenmore appliance brand.

Sears Holdings, which owns both the Sears and Kmart chains, has been looking to sell Kenmore for years in an effort to raise additional money.

Lampert said he's prepared to close on the deal in as little as 60 days.

Google's parent company Alphabet (GOOGL) has been making waves in the health insurance sector. Alphabet announced Tuesday it's pouring $375 million into Oscar Health, a small insurer that thinks it can use big data to revolutionize the industry.

The investment by Google's parent company follows its participation in a $165 million infusion earlier this year. Shares in Alphabet were steady premarket.

The US Justice Department said Tuesday that Royal Bank of Scotland will pay $4.9 billion to settle charges that it misled investors ahead of the 2008 financial crisis. This is the largest penalty the Justice Department has imposed on a bank for crisis-era misconduct.

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5. Coming this week:

Wednesday — Macy's (M), Cisco (CSCO) earnings
Thursday — JCPenney (JCP), Nordstrom (JWN), Walmart (WMT) and Nvidia earnings
Friday — Deere (DE) earnings, consumer sentiment