While worries around Nafta and the bond market might be fading a bit, earnings season is ramping up.

Delta’s results have cruised in today, and a couple of giant banks — J.P. Morgan

JPM, +1.10%

 and Wells Fargo

WFC, +1.38%

 — have their moment tomorrow.

Buying the financial sector’s stocks right now makes sense to Above the Market’s Bob Seawright.

“This trade doesn’t seem ‘past it’,” writes Seawright, chief investment officer at Madison Avenue Securities, for our call of the day.

The big financials ETF

XLF, +0.84%

 remains below its 2007 peak, and the sector’s 10-year return lags the S&P 500’s, he notes. Plus, banks and their ilk are cheaper than the broad market.

As the Trump administration hands out reprieves to banks, Seawright gives a related reason why Wall Street bosses are smiling.

New Federal Reserve chief Jerome Powell “will likely be inclined toward less regulation, another reason to favor financials in 2018,” Seawright says.

Rising rates and tax cuts should provide a boost, too, with the latter described by other pundits as nice for banks in the long run, after some short-term pain.

“Financials should be helped by higher interest rates (and thus higher profits), corporate tax relief (banks are some of the nation’s highest corporate taxpayers), and an economy growing by nearly 3 percent annualized,” Seawright says.

That might help cheer up a Bernstein analyst who has been highlighting how financial types fritter their lives away on spreadsheets and hanging around airports.

See:Bank earnings will be ‘moderate’ and ‘muddied,’ but there’s good news

XLF FTW?
Key market gauges

Futures for the Dow

YMH8, +0.17%

 , S&P 500

ESH8, +0.20%

 and Nasdaq-100

NQH8, +0.28%

are slightly higher, after the Dow

DJIA, -0.07%

 , S&P

SPX, -0.11%

and Nasdaq Composite

COMP, -0.14%inched back yesterday from all-time highs.

EuropeSXXP, +0.04%

is retreating, after Asia mostly closed lower, though Hong Kong’s Hang Seng

HSI, +0.15%

was up. Oil 

CLG8, +0.63%

is advancing, while the dollarDXY, -0.05%

is edging higher.

Bitcoin

BTCUSD, -5.27%

is slumping, and the blame is going to reports that South Korea might ban all crypto trading. Gold

GCG8, -0.02%

is little changed.

See the Market Snapshot column for the latest action.

The chart

The dollar surges against Mexico’s peso, then eases.

The dollar jumped against the Mexican peso

USDMXN, +0.5040%

 yesterday afternoon, following news that Canada is increasingly convinced that Nafta’s days are numbered.

But the buck has given up much of that gain, as shown in the chart above. It’s been a similar story for the dollar and the loonieUSDCAD, +0.1435%

 .

Check out:Analysts worry ending Nafta could halt the bull market in stocks

And see:Canada files WTO complaint against U.S. tariffs

The quote
Reuters

Together again?

“The news may quote the wrong source of information, or it may be fake news.” — China’s foreign-exchange regulator is pooh-poohing yesterday’s big news that Beijing may halt or slow its purchases of Treasurys.

That spokesman is not alone in playing down the recent buzz around the bond market. “Although it is tempting to jump aboard the Gundlach/Gross/China bond bear trade, given the extended sold-off nature of U.S. fixed income, there are better trades,” writes The MacroTourist’s Kevin Muir.

The buzz

Agents have raided nearly 100 7-Eleven3382, -2.39%

 stores across the U.S. and arrested employees suspected of being in the country illegally.

President Trump has said it’s “unlikely” he will talk with Special Counsel Robert Mueller, as he argued there has been “no collusion” between his presidential campaign and Russia.

The death toll from Southern California’s mudslides has jumped to 17, and the number of people missing also has climbed to 17.

Blank-check company Nebula

NEBUU, +0.20%

 , Liberty Oilfield Services

LBRT, +0.00%

 and Industrial Logistics Properties

ILPT, +0.00%

 are among this week’s IPOs.

Read more:5 things to know about security firm ADT ahead of its IPO

Ahead of tomorrow’s figures for the consumer price index, readings on producer prices and jobless claims are on tap before the open, then a report on the federal budget hits after lunch.

Check out:Why U.S. inflation data will be a litmus test for bond buyers

“Zesty Blood Orange Diet Coke”

KO, -0.35%

 is now a thing, and the reaction is mixed.

The lights went out yesterday at CES, the nation’s premier consumer-tech conference.

Random reads

Did Costco give a full refund on Jan. 4 for a dead Christmas tree?

“None of this was what I thought was going to happen,” says the woman who drew up a list of media men to guard against

On a related note: Harvey Weinstein was slapped at an Arizona restaurant.

U.S. ambassador gets heat from the Dutch media for his 2015 remarks about “no-go zones.”

A cryptocurrencies fan visits a central bank to make a PSA:

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