Five Things You Need to Know to Start Your Day
America gets back to work, it’s a huge week for the world economy and there’s lots of big corporate news. Here are some of the things people in markets are talking about today.
Shutdown ends, for now
The partial government shutdown has ended with a temporary funding bill that will re-open agencies through Feb. 15. President Donald Trump made clear that he is willing to close the government again, or use emergency powers, should lawmakers fail to provide funding for his border wall by the mid-month deadline. While some agencies are getting back to work this morning, the fallout from the longest-ever closure may linger for some time.
Partisan wrangling in Washington and London has dogged January but it’s ending with big-picture events. On Wednesday, the Federal Reserve will announce its latest monetary policy decision, with Chair Jerome Powell due to give a press conference explaining the central bank’s thinking. Chinese officials are set to arrive in the U.S. today ahead of trade talks, also scheduled to start on Wednesday. Friday, meanwhile, will see non-farm payrolls data for January.
It was a busy weekend for some of the world’s biggest companies. Deutsche Bank is said to have secured a commitment for further backing from Qatar as the troubled lender moves towards a possible merger with domestic rival Commerzbank AG. Shares in the bank rose in trading this morning. Brazil’s Vale SA, reeling from the catastrophe of a dam breach that killed more than 50 people, voted to suspend dividend payments. Iron ore prices in Asia jumped as investors speculated global supply could be interrupted. There was some relief in the aluminum market after America lifted sanctions on companies linked to Russian tycoon Oleg Deripaska. Finally, management problems at Nissan Motor Co. are far from over as the Securities and Exchange Commission is investigating whether the carmaker accurately disclosed executive pay in the U.S., according to several people familiar with the matter.
Overnight, the MSCI Asia Pacific Index dropped 0.2 percent while Japan’s Topix index closed 0.7 percent lower as investors awaited the outcome of this week’'s trade talks. In Europe, the Stoxx 600 Index was down 0.3 percent by 5:45 a.m. Eastern Time as a fall in energy companies driven by lower oil outweighed a rise in miners on the back of higher metal prices. S&P 500 futures pointed to a loss at the open, the 10-year Treasury yield was at 2.755 percent and gold slipped toward $1,300 an ounce.
There’s a raft of U.S. economic data to catch up on this week as federal employees get back to work. Retail sales, durable goods orders, new home sales, trade balance, the budget statement, and TIC flows are among figures to be published in the coming days, with the exact timing unclear. One thing definitely coming today, and worth watching, is earnings from global industrial bellwether Caterpillar Inc., which can move wider markets.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots: What an American reporter learned while working in China.
- U.S. Treasury set to borrow $1 trillion for a second year to finance deficit.
- Bridgewater, Rentech make $13 billion in a grim hedge-fund year.
- Bank of England deny Venezuelan request to withdraw $1.2 billion in gold.
- Starbucks’ Howard Schultz “seriously thinking” of 2020 White House run.
- Surges of cold polar air are blasting the Midwest with the lowest temperatures in years.
- Weather forecasts really are getting better.
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