Written by Econintersect
Early Bird Headlines 23 January 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
Global
Emerging Markets Fear Yellen, But Need To Keep Their Eye On Draghi (Benn Steil and Emma Smith, Council on Foreign Relations, Forbes) BS will be contributing to GEI. In anticipation of the U.S. Federal Reserve’s first rate hike in nearly a decade, $500 billion in capital outflows slammed emerging markets (EMs) last year – a slow-motion version of the 2013 “taper tantrum“, when the Fed signaled that the era of quantitative easing was coming to an end. IMF Managing Director Christine Lagarde has warned of a deeper and more disorderly downturn going forward if the pace of Fed tightening is more aggressive than markets are discounting. But we should be watching the expanding balance sheets at the European Central Bank (ECB) and the Bank of Japan (BoJ) which are projected to take the place of the Fed for supporting global liquidity in 2015 and 2016. Many merging markets are thus shifting toward euro financing. This will work well if the euro depreciates. But if it reverses and rises against the dollar the outcome will be another tragedy for emerging markets.
No, Markets Aren’t Revisiting 2008 (Bloomberg) Valuations are much different today compared to 2007 – see graphic below. In fact PEs are close to market lows in 2009 except for U.S. stocks. Here is what author Nir Kaisser says:
Yes, markets have beaten up everyone so far this year. Investors are looking for answers and struggling to identify a culprit — just read the headlines. According to my Bloomberg colleagues, some observers are even beginning to wonder whether a repeat of the nightmarish 2008 meltdown is underway.
All of this sudden soul-searching is odd. Overseas markets have been in turmoil for much of the last two years. The MSCI EAFE Index returned a negative 4.5 percent to investors in 2014 and a negative 0.4 percent in 2015. The MSCI Emerging Markets Index returned a negative 1.8 percent and a negative 14.6 percent, respectively, over the same period.
U.S.
Oil’s negative grip on stocks could be challenged (CNBC) With three days of rebound, are the bears in retreat? This article suggests that investors will now turn their attention to the Fed and big earnings, like Apple and Amazon.com for clues on market direction.
Major Storm Strikes U.S. East With Possible Record Snowfalls (Bloomberg) So far the slow-moving winter storm is progressing as forecast with snowfall depths from 18″ to 36″ possible over a wide area from Virginia to New York over the next couple of days.
Bill Johnson, Former Olympic Downhill Gold Medalist, Dies at Age 55 (CNN) Bill Johnson, the first American to win an Olympic gold medal in downhill skiing, died Friday at the age of 55 in Gresham, Oregon. He won the first ever alpine gold for an American man in the 1984 downhill at Sarajevo. According to the Associated Press, via ESPN.com, the Los Angeles native succumbed to an illness brought on by a series of strokes in recent years. The article does not indicate whether the strokes were related to the severe head trauma he experienced in a training crash in 2001 when he attempted a comeback for the 2002 Winter Olympics.
EU
At least 45 refugees drown off Greece (Al Jazeera) It is mid-winter and still they come. Two boats smuggling refugees sank off two Greek islands in the early am Friday. The death toll includes 17 children.
France
Au revoir and shalom: Jews leave France in record numbers (CNN) Nearly 8,000 French Jews moved to Israel in the year following the Charlie Hebdo attack, according to the Jewish Agency, which handles Jewish immigration, or aliyah, to Israel. This is the largest migration of Jews from Western Europe to Israel since the modern state of Israel was created.
Syria
U.S. troops take over air base in Syria, local reports say (Military Times) Hat tip to Roger Erickson who suggests this may indicate an increase in U.S. support for the Kurds. A small team of U.S. troops is setting up a base camp at Rmeilan Air Base in the Syrian Kurdish region near Syria’s Iraqi and Turkish borders, according to local reports. The airfield was until recently under control of the Syrian Kurdish forces, known as the YPG, but was turned over by the YPG to the U.S. to help expand American support for the Syrian Democratic Forces, which is the loose-knit coalition of American-backed militants fighting the Islamic State group.
Iran
What Led American Ships Into Iranian Waters? (The Atlantic, MSN News) Did the headline writer read the article? A rough timeline is given but there is nothing said about how the two small boats ended up in Iranian water.
Canada
4 dead after shootings in northern Saskatchewan (Assoicated Press) A U.S. disease becomes contagious. A gunman opened fire at a high school and a second location in an aboriginal community in northern Saskatchewan on Friday, leaving four dead and at least two injured, officials said. Shootings at schools or on university campuses are rare in Canada. However, the country’s bloodiest shooting occurred Dec. 6, 1989 at Montreal’s Ecole Polytechnique, when Marc Lepine entered a college classroom at the engineering school, separated the men from the women, told the men to leave and opened fire, killing 14 women before killing himself.
