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May faces confidence vote after Brexit loss, day 26 of shutdown with no end in sight, and more bank earnings due. Here are some of the things people in markets are talking about today.
U.K. lawmakers will vote on a no-confidence motion in Prime Minister Theresa May’s leadership later today in the wake of yesterday’s humiliating defeat of her Brexit deal. Should she lose the vote, Britain will face its third general election in four years. With just 10 weeks to go until the country is due to leave the European Union, the only outcome that’s being predicted with any confidence is that the deadline will be extended. Bank of England Governor Mark Carney told lawmakers this morning the BoE is talking to the U.K. Treasury about powers it will need to smooth financial volatility in the case of a no-deal Brexit.
The White House has ordered thousands of furloughed federal employees back to work without pay in an attempt to limit the impact of the partial shutdown that continues to show no sign of resolution. President Donald Trump is due to sign legislation later today that will provide workers with back-pay after the shutdown ends. Elsewhere in Washington, U.S. Representative Alexandria Ocasio-Cortez is almost certain to join the House Financial Services Committee after a group of fellow Democrats voted to recommend her for the panel.
Goldman Sachs Group Inc. and Bank of America Corp. continue a bank earnings season of lackluster results so far. While the bottom line is obviously crucial for Goldman, investors will also be alert to any comments on the 1MDB scandal that’s shaken the firm. Analysts have also reduced forecasts for Bank of America in recent weeks.
Overnight the MSCI Asia Pacific Index slipped 0.1 percent while Japan’s Topix index closed 0.3 percent lower as global growth worries again came to the fore. In Europe the Stoxx 600 Index was 0.2 percent higher at 5:50 a.m. Eastern Time following dovish comments from European Central Bank President Mario Draghi, with London’s FTSE 100 Index the region’s worst performer, slipping 0.4 percent. S&P 500 futures pointed to a small rise at the open, the 10-year Treasury yield was at 2.740 percent and gold was flat.
Today’s scheduled retail sales, business inventories, and TIC flows data have all fallen victim to the continuing government shutdown. What’s left is the December import and export price indexes at 8:30 a.m., the oil inventory report at 10:30 a.m., and the Fed’s Beige Book at 2:00 p.m. In other Fed news, Minneapolis Fed President and dedicated twitter user Neel Kashkari speaks at 6:30 p.m.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Equities around the world are approaching critical inflection points.
- Index-crazed investors turning S&P 500 into one gigantic company.
- Here’s how U.S. companies actually used their tax cuts.
- Goldman says rich people will drag down the U.S. economy.
- Top China fund sees bonds trouncing stocks again this year.
- London, New York and Hong Kong are no longer immune to global housing downturn.
- Cern’s planned new hadron collider is more than sixty miles in diameter.
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