Five Things You Need to Know to Start Your Day

(Bloomberg) --

The U.S. is pushing to get a trade deal done, central banks are being patient and Elon Musk delivers on a promise. Here are some of the things people in markets are talking about today.

Playing chicken

There's a degree of caution in the room as the U.S. pushes to get a final trade deal signed with China in the next few weeks, even as debate rages about whether to push Beijing for more concessions and talks turn to chicken. Trump has challenges to contend with on North Korea too. Even after the collapse of this week's summit, leader Kim Jong Un says he's willing to meet again. If it happens, Kim will face more pressure at home, as critics raise doubts about his strategy.

Wait and see

Central banks around the world are embracing the virtue of patience with both arms. Federal Reserve policymakers have said the U.S. economy is in a pretty good place but with risks to the downside, therefore any more interest rate hikes will be dependent on incoming data quelling concerns about the outlook. The European Central Bank, meanwhile, is seen taking its time deciding on whether the slowdown in the region’s economy is sufficient to warrant taking policy action or reviving some form of long-term loans for the banking sector. Weak underlying inflation isn’t making that decision any easier.

God giveth and God taketh away

Elon Musk is still burning cash, but at least he’s delivering on one big promise -- a $35,000 Model 3. Tesla probably won’t post a profit in the first quarter, contradicting several of his past predictions that the company would earn money from now on. That was the take-away as the Tesla chief executive announced the long-awaited cheaper Model 3, along with a plan to trim costs by closing stores and cutting more jobs. Analysts were a little skeptical about the challenges the new Tesla model will face. They also raised questions about whether the firm is shifting its rooftop solar strategy, again.

Friday feeling

Overnight, the MSCI Asia Pacific Index gained ground as the latest economic data from China offered some reassurance to investors concerned about the global growth outlook, after disappointing numbers earlier in the week. In Japan, the Topix index closed 0.5 percent higher. The good vibes spread to Europe too, where the Stoxx 600 and all the regional indexes are in the green, with a similarly positive feeling likely to prevail in the U.S. as S&P 500 futures point to a higher open.

Coming Up

U.S. factories data will be closely scrutinized, particularly following the biggest slump in euro-area orders for six years and a similarly gloomy, Brexit-muddled picture in the U.K. But the U.S. numbers aren’t the only game in town as we’ll get rig count data from Baker Hughes plus GDP and manufacturing numbers from Canada. It’ll be thinner on the earnings front, with updates due from sneaker merchant Foot Locker Inc. and broadcaster Tribune Media Co.

What we've been reading

This is what's caught our eye over the last 24 hours.

  • The collapse of a favorite Wall Street trading strategy.
  • Bill Gross opens up about his autism.
  • How cobalt markets fell victim to the allure of electric cars.
  • A Robert Rauschenberg painting depicting JFK could return 300,000%.
  • Clash of market believers and skeptics.
  • It was a bad week for world leaders.
  • The Trump economy is looking quite a lot like the Obama economy.

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