Five Things You Need to Know to Start Your Day

(Bloomberg) --   ↵

U.S. stocks rallied, capping their biggest monthly gain in three years, and Treasuries advanced as better-than-expected corporate earnings and the Federal Reserve’s dovish turn lifted investor sentiment. Here are some of the things people in markets are talking about.

Trade Deal Hinges on Xi

President Donald Trump said he may soon meet with China’s Xi Jinping to finalize details of a possible trade deal as he declared negotiations in Washington were making progress. “Meetings are going well with good intent and spirit on both sides,” Trump said in a tweet Thursday. “No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points,” Trump said in another posting. Later in the day, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer told reporters they will travel to China to continue talks after Trump met with Chinese Vice Premier Liu He.

Stocks, Treasuries Advance

Asian shares will look to build on gains stateside after technology stocks pushed  the S&P 500 Index to an eight-week high. General Electric Co. and Facebook Inc. both surged more than 10 percent after traders cheered their quarterly results. Emerging-market equities advanced while Treasury yields fell a day after the Fed signaled that it will be “patient” on interest-rate moves and flexible on reducing its balance sheet. “The market is back to being focused on earnings,” Kate Warne, an investment strategist at Edward Jones, said in an interview at Bloomberg’s New York headquarters. “Much of the news has been reassuring and that’s supported rising stocks.”

Trump Threatens Another Shutdown  

President Donald Trump said a bipartisan committee’s plan to avoid another government shutdown will be a " waste of time" if it doesn’t include a border wall, as House Speaker Nancy Pelosi hinted that she’s open to some new fencing but not a wall to boost border security. Trump has threatened a new government shutdown after Feb. 15 if a new spending bill doesn’t fund a wall or physical barriers. He also is considering whether to declare a national emergency and bypass Congress to get funds for a wall at the border with Mexico. "On Feb. 15th, the committee will come back and if they don’t have a wall, I don’t even want to waste my time reading what they have because it’s a waste of time," Trump said in the Oval Office on Thursday. "Because the only thing that works for security and safety for our country is a wall."

China Treasury Holdings Slide, Again

China’s holdings of U.S. Treasuries fell to the lowest level in a year and a half, according to data from the Treasury Department released Thursday. China’s pile of notes, bills and bonds dropped to $1.12 trillion in November, from $1.14 trillion in October. It was the sixth straight decline and left the nation’s stockpile the smallest since May 2017. China remains the U.S.’s biggest foreign creditor. Japan is next, with $1.04 trillion, up from $1.02 trillion in October, which was its smallest amount since 2011. Holdings will probably continue to fall “as the ongoing trade war sours the relationship between China and the U.S., and thus reduces their appetite for Treasuries,” Thomas Simons, a money-market economist at Jefferies LLC, wrote in a note after the release. “This will be important to keep an eye on.”

U.K. Lays Groundwork for Bexit Delay

The U.K. government laid the groundwork for a potential Brexit delay, as Foreign Secretary Jeremy Hunt became the most senior minister yet to suggest the deadline could be pushed beyond the end of March. “It’s true that if we ended up approving a deal in the days before March 29, then we might need some extra time to pass critical legislation,” Hunt told BBC Radio. “It’s difficult to know” how long talks with the European Union will last, he said, as the government seeks to renegotiate the terms of divorce. Hours later, Andrea Leadsom, the minister in charge of the government’s legislative program, told members of Parliament they may need to work through a planned recess in February “to make progress on key business.” A government official later confirmed the holiday would be canceled.

What we’ve been reading

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

• Apple pulls key app-development tools from Google.
• Inside the takedown that landed Carlos Ghosn in Japanese jail.
• Amazon sales, profit top estimates.
• Bitcoin’s winter grows colder.
• Fake eyelashes with North Korea connection reap $1 million fine.
• The key to a good night’s sleep may be this blanket.

To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net

©2019 Bloomberg L.P.