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Five Things You Need to Know to Start Your Day
(Bloomberg) --
Good morning. Equities fell on fresh doubts that a partial U.S.-China trade pact is near, British political rivals are revealing key policy proposals and a European carmaker faces a blockbuster lawsuit. Here’s what’s moving markets.
Stocks Dip
An index of Asian stocks fell as much as 1.3%, the biggest decline in almost three months, after a report late Wednesday that Washington and Beijing are unlikely to reach a trade deal this year; news that U.S. President Donald Trump is likely to sign a bill backing protesters in Hong Kong further eroded risk appetite. Sentiment recovered somewhat, however, after China’s chief trade negotiator said he was “cautiously optimistic” on a phase one pact. Minutes from the Federal Reserve’s last policy meeting, released late Wednesday, showed officials have the trade situation firmly on their radars.
Johnson Falters
Boris Johnson’s election campaign took another stumble, just when he needed to regain momentum after Tuesday’s live debate. The prime minister confused details of his National Insurance relief plan, repeatedly getting the numbers wrong as he went off-script in a speech to engineering workers in the northeast of England. Opposition leader Jeremy Corbyn, meanwhile, is expected to make a rallying cry to the public later, urging it to push back against the wealthy by supporting his Labour Party manifesto. The pound recovered from Wednesday’s loss as it earned Wall Street’s backing.
Fiat Chrysler Lawsuit
Fiat Chrysler Automobiles NV shares will likely be in focus in Milan today after General Motors Co. hit the rival carmaker with a blockbuster racketeering lawsuit, alleging that a bribery and corruption scheme cost GM billions of dollars and tainted labor contracts as far back as 2009. The suit even mentions a 2015 hug between late Fiat Chief Executive Officer Sergio Marchionne and a union boss. Fiat Chrysler speculated that GM may be trying to undercut a planned merger with France’s PSA Group, but GM said that’s not the case. Fiat Chrysler’s stock fell 3.7% in New York, the most since mid-August.
Israel Gridlock
Israel looks set to remain in political gridlock, drawing the country closer to its third election in a year after former military chief Benny Gantz failed to garner enough support in Parliament to form a government and dislodge Prime Minister Benjamin Netanyahu. The only politician to present a serious challenge to the PM over the past decade even said he was “willing to make far-reaching concessions” to work with embattled Netanyahu’s Likud party, but a pact couldn’t be reached. Now, in a development that has never happened before in Israel’s 71-year history, the ball goes to Parliament’s court.
Coming Up…
In corporate news, LVMH is said to be talking to Tiffany & Co. after upping its takeover bid. In Germany, Thyssenkrupp AG plans to suspend dividend payments after it warned losses would deepen as it restructures, underscoring the challenge facing executives trying to chart a path out of crisis. An update is due from Royal Mail Plc, which has avoided a planned strike by workers over Christmas. Elsewhere, the Organisation for Economic Co-operation and Development publishes its economic outlook, after slashing its global forecasts two months ago, and for emerging market currency traders, South Africa is seen keeping its main interest rate on hold.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- More Davids than women in mutual fund management.
- Macron earns a swift German rebuke.
- Culture of fear at big four accounting firms.
- Yep, the robots are still coming.
- Inside London's derelict “Billionaires Row.”
- World’s biggest pension fund keeps analysts in dark.
- Europe’s richest man spends $1 billion on department store.
To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net
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