Five Things You Need to Know to Start Your Day

Joe Easton

13 Mar 2019, 05:57 PM IST

(Bloomberg) --

Good morning. U.K. lawmakers will vote today on whether to back a no-deal Brexit, Asia stocks' recovery proved short-lived and two titans of the apparel world report earnings. Here’s what’s moving markets.

Carry on voting

You’ll know by now that U.K. Prime Minister Theresa May suffered another humiliating defeat in Parliament as lawmakers rejected her amended Brexit agreement by a huge majority. That was largely expected, and as such the pound was steady after dipping on Tuesday. So, now what? You guessed it: more voting. First, the House of Commons will vote today on whether to back leaving the European Union without an agreement to keep doing business. Then, presuming a “no-deal Brexit” is rejected, MPs will most likely be asked to vote on Thursday on extending Article 50 – delaying the divorce. A postponement of the break-up is now the most likely scenario, according to bookmakers, who tend to know best.

Halted

This week’s recovery in Asian stocks came to an abrupt halt as lackluster machinery data from Japan and a below-expectations consumer confidence reading weighed on the region. U.S. Trade Representative Robert Lighthizer already had soured the mood on Tuesday afternoon by saying Washington must keep the option of raising tariffs on Chinese imports as a bargaining tool in trade talks. “I can’t predict success at this point,” he added. The dollar was little changed after fluctuating overnight.

Tug of war

Just as equities struggle for clear direction this week, strategists can’t quite make their minds up either, telling investors to prepare for both bull and bear cases as risk assets around the world reach a crossroads. While economies are growing and concern over central bank tightening is easing, corporate earnings look weaker and trade war and Brexit risks remain unresolved. SocGen describes the situation as a “tug of war,” while Morgan Stanley told investors “don’t buy into Goldilocks” – the scenario of solid but noninflationary growth.

Threads

Two apparel powerhouses publish earnings this morning. German sportswear firm Adidas AG’s full-year report is expected to show continued U.S. penetration, partly aided by its partnership with Kanye West on the rapper’s Yeezy shoe brand, according to Bloomberg Intelligence. Meanwhile, Spain’s Inditex SA, owner of the fast-fashion chain Zara, reported full-year earnings before interest and tax that were slightly below estimates, although it did propose boosting its dividend .

Coming Up...

There’s not much European data to get excited about this morning, but statistics from the U.S. due later include durable goods, whose weaker-than-expected reading last time out weighed on the dollar and stocks. In terms of other European corporate earnings, look out for numbers from U.K. supermarket chain Wm Morrison Supermarkets Plc and builder Balfour Beatty Plc, as well as German energy supplier E.ON SE.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

Wealthy parents face criminal charges over U.S. university admissions payments.
The product designed using 100,000 scans of feet.
Some of the least-loved stocks have Morgan Stanley and BofA on their side.
A carmaker has a moon-landing in sight.
Hollywood’s gone and made a film about cryptocurrencies.
Quant-fund closures are giving factor investors a fright.
By any means necessary, this central bank will protect its currency.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net