Five Things You Need to Know to Start Your Day
Trump says he’s got a way out of the partial U.S. government shutdown, China’s stock rally could have legs and Asian equity markets are poised to kick off the week on a positive note. Here are some of the things people in markets are talking about.
Shutdown to End?
U.S. President Donald Trump announced his plan to end the government shutdown — and it was immediately panned by both Democrats and Republicans. He offered to extend protections for so-called Dreamers in exchange for $5.7 billion to fund a border wall. House Speaker Nancy Pelosi said the proposals were "a non-starter," but the No. 3 House Democrat later offered a path to a deal focused on a more permanent solution for undocumented individuals in the DACA program. The shutdown reached its 30th day on Sunday.
China’s Stock Rally
At the end of October, when Chinese shares were in freefall, the chief investment officers at Deutsche Bank Wealth Management made a bold call: the worst was over for the world’s second-largest equity market. Since the start of November, the MSCI China Index of the nation’s shares has rebounded more than 7 percent. For Christian Nolting, global chief investment officer, and Tuan Huynh, chief investment officer for Asia-Pacific, those gains are just the start. China’s A shares will lead an advance among Asia ex-Japan equities this year, the two money managers say. While they declined to give a specific target for Chinese stocks, they expect the regional ex-Japan gauge to climb almost 5 percent more in 2019.
Equity futures in Asia are indicating a positive start to the week, extending a trend that’s seen global shares climb the past four weeks. Investors will be watching out for China data on Monday, including GDP for the fourth quarter in addition to retail sales and industrial production. The S&P 500 climbed 1.3 percent on Friday and the yield on 10-year Treasuries rose to 2.78 percent. Currency traders will be scrutinizing U.K. Prime Minister Theresa May as she presents Parliament with an alternative Brexit proposal after her first effort was defeated.
Ghosn and Renault
France’s finance minister said there is no plan to remodel the two-decade alliance between Renault SA and Nissan Motor Co., whose architect Carlos Ghosn remains in jail two months after he was arrested in Japan on allegations of financial crimes. “No shareholding re-balancing or modification of cross shareholdings between Renault and Nissan are on the table,” Bruno Le Maire told Journal du Dimanche in an interview published late Saturday. France wants “solid and stable” governance at the helm of Renault, he said. Tensions are simmering on both sides of the partnership because of its lopsided structure. While Nissan has outgrown Renault in sales and profits, the Japanese company has far less influence, owning a 15 percent non-voting stake in Renault, which in turn has a 43 percent holding of Nissan. The French government owns 15 percent of Renault.
Administration officials are planning for President Donald Trump’s second summit with North Korean leader Kim Jong Un to take place in Vietnam, said people familiar with the plans. The White House announced on Friday that Trump would meet Kim in late February, following a 90-minute meeting between the president and Kim Yong Chol, one of the North Korean leader’s top aides. The pair discussed denuclearization and a second summit, the White House said. Kim Yong Chol also met Friday with Secretary of State Michael Pompeo. Trump and Kim held their first meeting in Singapore in June. The February summit is likely to take place in Hanoi, the capital, but Danang, site of the 2017 Asia-Pacific Economic Cooperation meeting, and Ho Chi Minh City in the country’s south have also been discussed as possible venues.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Young Australians are investing increasingly overseas.
- Davos billionaires keep getting richer.
- How a cab ride that nearly killed me changed my view on ride-hailing apps.
- America Inc. is wary about the economy but isn’t panicking.
- Europe’s most important river is running dry.
- Pork wings are coming to your super bowl menu.
©2019 Bloomberg L.P.