Five Things You Need to Know to Start Your Day
U.S. stocks ended an eight-day winning streak as concerns about growth and trade took hold of investors. Here are some of the things people in markets are talking about.
IMF Cuts Global Growth Outlook
The International Monetary Fund cut its forecast for global growth to the lowest since the financial crisis amid a bleaker outlook in most major advanced economies and signs that higher tariffs are weighing on trade. The world economy will grow 3.3 percent this year, down from the 3.5 percent the IMF had forecast for 2019 in January, the fund said Tuesday in its latest World Economic Outlook. The 2019 growth rate would be the weakest since 2009, when the world economy shrank. It’s the third time the IMF has downgraded its outlook in six months.
EU, China Present United Trade Front to Trump
Europe claimed a diplomatic win in the push for China to pursue fairer economic policies. At a European Union-China summit on Tuesday in Brussels, the EU said a laboriously drafted joint statement signaled important Chinese concessions over curbing subsidies to domestic industries and facilitating market access for foreign companies. The wording about the two issues helped salvage the leaders’ communique after the EU withdrew a veto threat, enabling both sides to show unity in the face of U.S. President Donald Trump’s “America First” challenge to the multilateral order.
Stocks End Eight-Day Rally
Asian stocks look set for declines after U.S. shares ended the longest winning streak in 18 months Tuesday amid renewed concerns about slowing global growth and an escalation of trade tensions. The S&P 500 fell for the first time in nine sessions, with multinationals bearing the brunt of the selling, as Caterpillar and Boeing dragged the Dow Jones Industrial Average lower. Airlines tumbled along with materials and energy producers. Ten-year Treasury yields fell below 2.50 percent, while the greenback was mixed against major currencies.
EU Set to Force U.K. Into Long Brexit Delay
Britain’s exit from the European Union looks set to be delayed by as long as a year in a blow for Theresa May that risks a destabilizing backlash at home. European Council President Donald Tusk rejected May’s request for a brief postponement to the U.K.’s membership, saying it would create a “rolling series of short extensions and emergency summits, creating new cliff-edge dates.” Leaders will finalize the length of the delay to Brexit at a summit on Wednesday. Tusk wants them to agree to an extension of up to a year, and diplomats from member states see December 2019 or next March as the likely new departure date. Draft conclusions show EU leaders are planning to offer Britain an early exit clause in case a solution to the domestic deadlock turns up.
Aramco Sees Unprecedented Demand for Bond Deal
Saudi Arabia took its first major step onto the global financial stage to fund the heady ambitions of its crown prince, issuing $12 billion of bonds for its state-run oil company in one of the most oversubscribed debt offerings in history. The demand for Saudi Aramco’s debut offering was so robust it allowed the energy giant to borrow at a lower yield than its sovereign parent. That’s a rarity in the debt world and underscores the global chase for yield that has investors brushing off long-held conventions. The rush to buy Aramco’s debt even helped to lower the borrowing costs for the kingdom.
What we’ve been reading:
This is what caught our eye over the last 24 hours.
- This top China investor only has eyes for one stock.
- Mar-a-Lago intruder’s room had signal detector, cash hoard.
- Macquarie to acquire $12 billion asset manager from Foresters.
- This 2.5-ounce pollution monitor detects how dirty your air is.
- Volvo is exploring closer ties with shareholder Geely in China.
- Pinterest co-founders to glean wildly different fortunes from IPO.
- The mastermind behind BTS has built a $780 million K-Pop fortune.
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