Five Things You Need to Know to Start Your Day
U.S. shares surge, a possible Brexit bargain, and Boeing in crisis mode. Here are some of the things people in markets are talking about.
Shares in Asia look set to advance after U.S. stocks rallied the most in six weeks. Chipmakers gained on deal news and the latest retail-sales data boosted confidence that the American economy isn’t headed for a downturn. The S&P 500 surged past its 200-day moving average, while the Nasdaq 100 jumped more than 2 percent amid an Apple upgrade. Nvidia agreed to buy a competitor, sending the Philadelphia Semiconductor index to its biggest gain in a month. The Dow Jones Transportation Average stopped the longest string of drops since 1972. Boeing retreated after some airlines grounded 737 Max flights following a crash Sunday. It is the biggest component of the price-weighted Dow Jones Industrial Average and the only of the 30 blue chips to retreat.
Global Economy Weakest in a Decade
The global economy’s sharp loss of speed through 2018 has left the pace of expansion the weakest since the global financial crisis a decade ago, according to Bloomberg Economics. Its new GDP tracker puts world growth at 2.1 percent on a quarter-on-quarter annualized basis, down from about 4 percent in the middle of last year. While there’s a chance that the economy may find a foothold and arrest the slowdown, “the risk is that downward momentum will be self-sustaining,” say economists Dan Hanson and Tom Orlik. The reasons for hope? The Federal Reserve’s decision to pause its interest-rate hikes, a U.S.-China trade truce and the fading of the shocks that battered Europe in 2018 could mean stabilization is around the corner. Other central banks have also stepped up, with the European Central Bank last week announcing new measures to help the economy through the current weakness.
Boeing Co. Chief Executive Officer Dennis Muilenburg faces his biggest crisis yet following the second deadly crash of a 737 Max jetliner, as some airlines grounded the best-selling plane. Shares of the plane maker ended the day down more than 5 percent. U.S. aviation regulators signaled their confidence in the safety of Boeing Co.’s embattled 737 Max family of aircraft, issuing a global notice of “ continued airworthiness.” China ordered its carriers to ground all 96 of Boeing’s newest 737 model, while Indonesia said it would also halt flights after Ethiopian Airlines Flight 302 went down in a field shortly after takeoff Sunday, killing all 157 people on board. While the flight recorders have now been recovered and must be analyzed, the disaster bore similarities to the doomed Lion Air 737 Max that crashed in October.
New Brexit Deal?
U.K. Prime Minister Theresa May has secured “legally binding changes” that “strengthen and improve” the nation’s divorce deal from the European Union, her deputy David Lidington told lawmakers late on Monday in London. He said the government has secured alterations to the withdrawal agreement and political declaration on the future U.K.-EU partnership, and that negotiations were ongoing in Strasbourg, France. The pound surged. “For now, markets seem to take it positively that there is a possibility of result other than a delay and that’s spurring short-covering, with people squaring positions,” said Shinsuke Kajita, chief strategist at Resona Holdings.
“Colonizing Italy” Howls Heard Before China Accord
Deputy Premier Matteo Salvini fired a warning shot as his populist government prepares to sign an accord with China, saying he refuses to see foreign companies “colonizing Italy.” Salvini, whose League party campaigns on the Trump-like slogan “Italy First,” expressed reservations after Prime Minister Giuseppe Conte said the country would sign a framework agreement with China on the massive Belt and Road Initiative infrastructure project. “If it’s about helping Italian companies invest abroad, we’re ready to talk to anyone,” Salvini told reporters on a visit to Milan. “But we’re absolutely not ready to do so if it’s a question of foreign companies colonizing Italy.” Conte said last week a memorandum of understanding will be signed during a visit to Italy by Chinese President Xi Jinping March 21-23.
What we’ve been reading:
This is what caught our eye over the last 24 hours.
- EU Parliament draft cites China’s threat to telecoms.
- Tencent-backed Meituan spending loads in battle with Alibaba.
- Tesla’s “amateur hour” prompts head-shaking.
- Why India’s election is among the world’s most expensive.
- Kim Jong Un seen having more to lose if he tests missile.
- Trump hasn’t set a date for a trade summit with Xi.
- Indian mania for top-shelf booze upends a teetotalling culture.
©2019 Bloomberg L.P.