Finally, here’s Reuters’ take on the US trade figures:

The U.S. trade deficit fell to a more than three-year low in November as imports declined further, likely weighed down by the Trump administration’s trade war with China, and exports rebounded, suggesting the economy ended 2019 on solid footing.

The Commerce Department said on Tuesday the trade deficit decreased 8.2% to $43.1 billion, the smallest since October 2016. The percentage drop was the largest since January.

The trade deficit has narrowed 0.7% through November and is on track to record its first annual decline since 2013. While the shrinking trade bill should provide a boost to gross domestic product in the fourth quarter, falling consumer goods imports also suggest a cooling in domestic demand.

Data for October was revised to show the trade gap declining to $46.9 billion instead of the previously reported $47.2 billion. Economists polled by Reuters had forecast the trade gap narrowing to $43.8 billion in November.

The goods trade deficit with China, the focus of the White House’s “America First” agenda tumbled 15.7% to $26.4 billion, with imports dropping 9.2% and exports jumping 13.7%. The goods trade gap with the European Union fell 20.2% to $13.1 billion.

More here. Goodnight! GW

Germany’s stock market had a stronger day than its UK counterpart, with the Dax index gaining 0.75%.

Optimism that the US-China trade deal will be signed next week lifted German exporters, says Fiona Cincotta of City Index:

The FTSE was outperformed by the Dax, which has more to gain from the US – China trade talks. Data from Europe’s largest economy has also been supportive with the retail sales, the service sector and retail sales all beating expectations this week, yet the euro has weakened – good news for Germany’s multinationals and exporters.

After a calmer day than yesterday, the FTSE 100 has closed just 1 point lower at 7,574.

Back on Rolls-Royce..... it appears that strong demand for customised luxury vehicles boosted sales last year.

The number of cars designed to customers’ specifications hit a new high in 2019, it says, keeping its “Bespoke” division busy catering for their whims.

One customer even wanted flowers sewn into the interior!

My colleague Rupert Neate explains:

The Bespoke collective at the home of Rolls-Royce in Goodwood, West Sussex, comprises several hundred creative designers, engineers and craftspeople,” the company said. “These highly talented men and women take enormous pride in fulfilling unprecedented levels of customer requests for bespoke personalisation and delivering on beautiful individual commissions such as the Rose Phantom.”

The Rose Phantom was requested by Swedish billionaire Ayad al-Saffar, who asked Rolls-Royce to fill the interior with roses. More than 1m embroidered satin stitches were needed to create a fantasy rose garden interior with an entanglement of greenery, flowers, and butterflies.

Today’s US trade figures show that Donald Trump’s tough stance with China is paying off, argues James Knightley of ING.

And that means other countries should be nervous, as it could encourage the White House to launch more trade disputes.

Knightley says:

Looking geographically, the numbers suggest that President Trump’s tough stance with China has paid dividends. Based on the January-November data, it looks as though the US is on course to run its smallest trade deficit with China since 2016 - the US-China deficit looks set to contract nearly $70bn in 2019 versus 2018.

However, we continue to see a significant amount of substitution (although not be as much as the deficit with China has shrunk) given the US deficits with both Mexico and the EU will hit new all-time highs – the deficit with the EU is on course to increase by $8bn while the deficit with Mexico is set to increase by $21bn.

Consequently, the EU is likely to remain nervous that President Trump could focus more of his attention on perceived European trade indiscretions in 2020.

Ding ding! The New York stock exchange is open.

But despite today’s strong trade figures, stocks are dipping. The Dow has dropped by 107 points to 28,595, or 0.35%, as investors worry about Middle East tensions.

Construction equipment and vehicles maker Caterpillar is among the fallers, along with chipmaker Intel, and conglomerates 3M and United Technologies.

Even Sony is taking an interest in the car industry.

The Japanese electronics giant unveiled a new concept electric car at the Consumer Electronics Show in Las Vegas. The Vision-S includes a swathe of imaging and sensing technologies, plus AI software and various telecoms and cloud computing services.

The car contains 33 sensors both outside the vehicle (to sense the environment and help with parking) and inside (to recognise passengers and respond to motions and gestures).

There’s also something called “360 Reality Audio”, to give each passenger a “deep and immersive audio experience” (in the old days we just listened nervously to the rattle of the ending and argued about what tape to listen to).

It’s only a prototype -- Sony isn’t going toe-to-toe with Tesla, and the idea is to show off how Sony’s electronics tech could be used in future cars.

Here’s our updated news story on Aston Martin’s profits shocker:

And here’s a flavour:

The company is pinning its hopes on the new DBX sports utility vehicle, for which it has received 1,800 orders since the launch in late November. It hopes the £158,000 SUV will widen its appeal to wealthy women – nearly all its current customers are men. It will start delivering the DBX in the April to June quarter.

Palmer said the rapid rise in orders had been “significantly better than any other previous models”. Aston Martin will also launch an open-top Vantage Roadster in the spring.

The firm said it would borrow a further $100m (£76m) within the next four weeks, at a hefty interest rate of 15%, in addition to the $150m in raised in a bond sale in September. It is reviewing other funding options and remains in discussions with with potential investors.

According to reports, Lawrence Stroll, the billionaire owner of a Formula One racing team, is leading a consortium that wants to bid for a stake in Aston Martin, which has gone bust seven times in its 106-year history.

Morrison’s isn’t the only UK supermarket to struggle over Christmas.

New industry figures suggest that the Big Four UK supermarkets all suffered falling sales over the festive period, as shoppers continue to flock to discount chains such as Lidl and Aldi. More here.

Britain’s FTSE 100 is having a more subdued day than the rest of Europe, up just 0.15% or 12 points at 7,587.

Supermarket chain Morrisons is among the top risers, up 2.2%, despite reporting that its sales declined over the crucial Christmas period.

Sales in the 22 weeks to 5 January dropped 1.7%, the company reports, as it blames an unusually challenging sales period (with Brexit uncertainty, a general election, and a weak economic growth all hurting).

So why are shares up? Because things could have been worse!

Simon Underwood, business recovery partner at accountancy firm Menzies LLP, explains:

This is a fair set of results from Morrisons, which is not as bad as some analysts had been expecting. The dip in like-for-like sales (excluding fuel) of 1.7 percent in the 22 weeks to the 5^th January reflects the exceptionally tough trading conditions in the run up to Christmas 2019 and, in particular, the timing of the general election, which may have discouraged consumer spending.

“Morrison’s ‘fix, rebuild and grow’ strategy has delivered strong results in recent years, but there was a setback in September last year when the company reported its first underlying fall in sales since 2016. This further fall in like-for-like sales will be concerning for shareholders.

“The key to strengthening its position among the big four supermarkets may lie in making more of its wholesale business, which sells goods to McColl’s and Amazon, whilst staying focused on delivering its turnaround plan and managing costs carefully.

“A focus on market share and margins looks like it will be the key to success in 2020.”

After yesterday’s nervous trading, Europe’s stock markets are recovering some ground today as investors watch for developments in the US-Iran crisis.

Germany’s DAX is the best performer, up 1.1%, led by by consumer groups such as Adidas (+2.2%). BMW, which owns Rolls-Royce, is also among the top risers - up 1.7% today.

The EU-wide Stoxx 600 index is up 0.6%, as traders pin their hopes on a US-China trade deal being signed next week (Donald Trump says it will happen on January 15th).

But the crisis between Washington and Iran, sparked by the killing of Qasem Soleimani in a US drone strike, threatens to destabilise the world economy.

Oxford Economics says:

Signs that global growth may stabilise in early 2020 have calmed fears that the current slowdown in the world economy will morph into a full-blown global recession. Activity data over recent months have mostly evolved as we expected, and some uncertainties have ebbed. As a result, we have lowered our estimate of the probability of a global recession in 2020 to 25% from 30% previously.

But while we are a little more confident that global growth will pick up beyond Q1, we still expect the improvement to be steady and unspectacular. Recent economic data has not been uniformly positive, and while US-China trade concerns have receded, apprehension over a US-Iran conflict has filled the void.

Investors who trusted Neil Woodford with their savings should take a deep breath before reading on.....

...because we’ve just learned that Woodford and business partner Craig Newman picked up £13.8m in dividends in the last financial year.

That’s according to the latest Woodford annual report, released this morning, which shows that running an underperforming fund can still be lucrative.

This takes the pair’s earnings to around £112m since 2014, when they launched Woodford Equity Income Fund -- which was ignominious frozen last summer after a surge of outflows.

Hundreds of thousands of small investors are still trapped in the Fund, and face losing at least a third of their money as Woodford’s various investments are unwound.

We also have new retail sales data, showing that eurozone consumers have raised their spending.

Retail sales jumped by 1.0% in November, and were 2% higher than a year ago.

Sales of non-food products were particularly strong, up 3.1% year-on-year. That may show that households are less anxious about economic prospects, as recession fears are receding.

Back on Rolls-Royce.... and its chief executive has warned that Britain needs to ensure smooth trading with the EU after Brexit:

Neil Wilson of Markets.com reckons Aston Martin has been forced to slash prices due to weak demand, saying:

Heavy discounting when buyers can see multiple models on the forecourt is impossible to avoid.

He points out that the strong order book for the DBX SUV means Aston Martin can now borrow another $100m from lenders.

However....

This is a drop in the ocean though and for sure Aston needs to raise cash in some way. The bond market looks unpalatable but even an equity raise could prove tricky. The rationale to go private is impossible to resist – the brand still has the cache to make it appealing.

Cat Rutter Pooley of the Financial Times says Aston Martin’s “car crash” of a stock market float has got even worse.

She writes:

This morning’s unscheduled trading update is a doozy. Adjusted earnings before interest tax depreciation and amortisation — the luxury carmaker’s preferred earnings measure — is expected to be just £130m-£140m in 2019. FactSet reports a consensus estimate of £200m. Adjusted ebitda margins will be between 12.5 per cent and 13.5 per cent. Back in July (another profit warning), Aston guided to a figure of 20 per cent for the year.

The list of reasons for the latest profit warning are long. Wholesale sales have fallen 7 per cent year-on-year, with Europe underperforming. Core retail sales increased, but customers needed more financing support to persuade them to buy. The cheaper Vantage model made up more of the sales mix.

Shares in Aston Martin have plunged by over 11% at the start of trading in London.

That pulls them down to 462p, from 520p last night, dragging the company’s value down to just over £1bn.

It’s only 15 months since Aston Martin floated on the UK stock market, at a price of £19 per share. The stock has performed dreadfully since, as this chart shows:

Aston Martin is explaining what went (badly) wrong in 2019 now, on a call with analysts and investors (and my colleague Julia Kollewe).

CEO Andy Palmer is talking up the prospects for its new sport utility vehicle.....

...while also explaining how Aston Matin has been forced to slash prices:

The City is about to give Aston Martin a serious kicking: