Written by Econintersect
Early Bird Headlines 14 December 2018
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, published Monday, Wednesday and Friday, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
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​Global
- Asia shares close lower as China economic data miss expectations (CNBC) Shares in Asia closed lower on Friday as China reported a slew of economic data that missed expectations, deepening worries about headwinds facing the world’s second largest economy. The dollar index rose to 97.495. Brent crude oil futures were at $61.09 per barrel at 0353 GMT, down $0.36 (0.6%) from their last close. U.S. West Texas Intermediate (WTI) crude futures were at $52.47 per barrel, down $0.11 cents, or 0.2%. Spot gold was steady at $1,241.99 per ounce, as of 0355 GMT. On Thursday, prices fell to their lowest level since Dec. 7 at $1,239.83. The metal is down about 0.4% so far for the week.
U.S.
- Senate votes to end US support for Saudi war, bucking Trump (The Hill) The Senate approved a resolution Thursday to end U.S. support for the Saudi-led war in Yemen, dealing a significant blow to President Trump amid heightened tensions over the death of U.S.-based Saudi journalist Jamal Khashoggi. Senators voted 56-41 on the resolution, which would require the president to withdraw any troops in or “affecting” Yemen within 30 days unless they are fighting al Qaeda.
The resolution would still need to be passed by the House before it could be sent to Trump, who has threatened to veto it. The House on Wednesday narrowly approved a rule governing debate on the farm bill that included a provision that would prevent lawmakers from forcing a war powers vote this year.
- Record cash streamed out of U.S.-based stock funds and billions more fled bonds in a week of apparently escalated caution, Lipper data showed on Thursday.
- The withdrawals appeared to show investor confidence cracking in the waning days of a wild year of up-and-down trading that has left many people with losses across both stock and bond funds, a rare occurrence.
- More than $46 billion thundered out of U.S. stock mutual funds and exchange-traded funds, the most ever, while a near-record $13 billion poured from bonds, according to the research service.
- Chief Justice of California Supreme Court leaves GOP over Kavanaugh confirmation (The Hill) The Chief Justice of California’s Supreme Court announced on Thursday that she had left the Republican Party following the confirmation of U.S. Supreme Court Justice Brett Kavanaugh. California Justice Tani Cantil-Sakauye told CALmatters that she had been deliberating her decision for a while but made up her mind after watching the backlash following multiple sexual assault allegations leveled against Kavanaugh. Cantil-Sakauye joins a series of many prominent Republicans who have disavowed or left the GOP in recent months.
- Trump shock leaves Republicans anxious over 2019 (The Hill) Republican lawmakers are struggling to coordinate their message with President Trump heading into a divided Congress after he pulled the rug out from them once again by declaring he would be “proud” to shut down the government. Trump shocked Republicans, who were preparing to blame Senate Minority Leader Charles Schumer (D, NY) for a potential partial shutdown, when he said he would take sole responsibility for shuttering federal agencies if Congress doesn’t meet his demand for $5 billion in wall funding.
- Melania Trump’s poll numbers plummet (CNN)
- Manhattan-based federal prosecutors are investigating whether some of the $107 million in donations to then President-elect Donald Trump’s inaugural committee were misspent, The Wall Street Journal reports.
- The Journal, citing people familiar with the matter, says the investigation arose in part from the slew of materials seized in April raids on Trump’s former personal lawyer, Michael Cohen, by federal prosecutors.
- The criminal probe is also looking into whether some of the committee’s top spenders traded money for access to the incoming Trump administration, as well as “policy concessions or to influence official administration positions,” sources tell the Journal.
- US dominance in oil markets is only going to get bigger, the IEA says (CNBC) The U.S. might have been left out from the big summit between OPEC and non-OPEC producers in Vienna last week but the country’s influence over global oil markets is only going to get stronger, the International Energy Agency (IEA) stated in its latest report.
- Don’t Hold Your Breath for U.S. Inflation (Moody’s) The intro:
There appears to be nothing in the November U.S. consumer price index that would dissuade the Federal Reserve from raising interest rates next week. We are keeping our subjective odds of a rate hike at 90%, but inflation will be key in determining the path of interest rates next year. The CPI was unchanged in November, in line with our forecast and the consensus. Energy was a drag, falling 2.2%, but the Fed normally views swings in these prices as transitory. Food prices increased 0.2% in November after being little changed in the prior two months. Excluding food and energy, the CPI rose 0.2%. On a year-ago basis, the headline and core CPI were each up 2.2%. Overall, inflation is hovering around the Fed’s target, but some headwinds are developing.
EU
- European passenger car sales fall 8.1 percent in November (Reuters) Volkswagen (VOWG_p.DE), Renault (RENA.PA) and Fiat Chrysler (FCHA.MI) led an 8.1% decline in European car sales in November, the main regional industry body said on Friday, as the introduction of tougher new emissions tests continued to weigh on demand. Car sales had surged in the month before the new standard became effective September 1 and have declined every month since.
- France and Germany are uprooting the pillars of the European Union (CNBC)
- A deeply wounded, impoverished and divided Europe began to come back together after two world wars around the French-German reconciliation in the early 1950s.
- The two countries made a deal in order to move the European project forward, but that uneasy alliance stumbled upon major difficulties posed by the last financial crisis, because Berlin and Paris have always been worlds apart.
- ECB to Finish the End of a Failed Era (Twitter)
UK
- May’s plea for EU help on Brexit cast as failure at home (Reuters) British Prime Minister Theresa May’s attempt to win assurances from the European Union on her Brexit deal was cast by opponents on Friday as a humiliating failure that did nothing to ease the parliamentary deadlock over Britain’s departure from the bloc.
Germany​
- Curious Rush To Combine German Banks (Alhambra Investments) Hat tip toLee Adler, Wall Street Examiner. The merger proposed for Deutsche Bank with its equally distressed Fellow German bank Commerzbank makes little sense to Jeffrey P.Snider. They have strongly overlapping holdings and those are concentrsated on the highest risk exposures: Junk bonds and lower traches of investment grades. The anchor dragging DB down is evident in the graphic below.
Russia
- Russia ready to discuss inspections with U.S. on arms treaty: RIA (Reuters) Russia is ready to discuss mutual inspections with the United States in order to save the Intermediate-range Nuclear Forces Treaty, RIA news agency cited Russia’s Ministry of Foreign Affairs as saying on Friday.
India
- Google is wading into India’s huge online shopping market (CNN) Google is making it easier for hundreds of millions of people in India to shop on its platform. The company launched Google Shopping in the country on Thursday, allowing users to search for products in English and Hindi – India’s most popular language – and compare deals from retailers. The service can be accessed via a new shopping tab within Google Search and through Google Lens, an image recognition app which allows users to photograph products to find out more about them. India is also the first country in the world to get a separate shopping homepage on Google, a company spokesperson said.
- These are the best tech companies to work for in India (CNBC) India may be steaming ahead when it comes to technological innovation, but top local tech talents would still rather work at one of the multinational companies in the country than a homegrown firm, according to a new study from jobs site Indeed. The 15 top companies include only 3 Indian firms and none are in the top 10. The top 5:
- Adobe
- Nvidia
- Microsoft
- SAP
- Akamia
South Korea
- South Korea’s Moon urges ‘restrained’ language in forced labor row with Japan (Reuters) South Korea’s President Moon Jae-in told Japanese lawmakers on Friday “cautious, restrained” language is needed when discussing World War II forced labor to avoid “inciting antagonistic emotions” between the people of the two East Asian countries.
China
- China’s consumers, factories take a beating as economic gloom deepens (Reuters) China’s November retail sales grew at their weakest pace since 2003 and industrial output rose the least in nearly three years as the economy lost further momentum, heaping pressure on Beijing to defuse its trade dispute with the United States. Retail sales rose 8.1% in November from a year earlier, below expectations for an 8.8% rise and the slowest since May 2003. In October, sales increased 8.6%. Auto sales fell a sharp 10.0% from a year earlier – the steepest drop in nearly seven years. Industrial output rose 5.4% year-on-year in November, missing analysts’ estimates and matching the pace seen in January-February 2016. Factory output had been expected to grow 5.9%, unchanged from October’s pace.
Over the weekend, China reported far softer than expected November exports and imports, reflecting slower global demand and waning domestic factory activity as profit margins narrow.
Click for large images and 15 more charts.
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