Written by Econintersect
Early Bird Headlines 03 January 2019
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 mostly lower as US futures point to further turmoil stateside (CNBC) Major stocks indexes in Asia were mostly lower on Thursday as U.S. futures pointed to another volatile session for Wall Street after Apple lowered guidance for first quarter and warned of weaker sales in China. The U.S. dollar index was lower at 96.499 after touching an earlier low of 96.425. U.S. West Texas Intermediate crude oil futures dropped $0.75 (more than 1.5%) to $45.79 a barrel by 0900 GMT. International Brent crude futures were down $0.50 (almost 1%) at $54.41 a barrel. Spot gold was up 0.24% at $1,287.80 per ounce at 7:16 a.m. ET, having touched its highest since June 15 at $1,292.32.
- Fewer Rate Hikes in 2019 (The Daily Shot) How many central banks are hiking rates vs. easing? The chart below includes a forecast for next year (CE = Capital Economics). As the year progresses an approach to no net rate hikes is expected.
U.S.
- McConnell suggests shutdown could last for weeks (The Hill) See also McConnell: House government funding package a ‘total non-starter’. Senate Majority Leader Mitch McConnell (R, KY) after a White House meeting with President Trump and other congressional leaders said Wednesday that the partial government shutdown could continue for days or even weeks. McConnell and other members of congressional leadership of both parties met with Trump and members of the Department of Homeland Security (DHS) for what was billed as a “briefing” on the border.
But lawmakers say that was quickly derailed with Republicans accusing Democrats of interrupting and Democrats stressed their time would be better spent talking about the partial shutdown.
- Americans are flocking to these 10 cities where you can afford to buy a home on a $60,000 salary (CNBC) CNBC ‘Make It’ identified 10 “boomtown” cities where the qualifying income to purchase a home with a 10 or 20% down payment is an annual salary of $60,000 or less:
- Charlotte
- Dallas
- DesMoines
- El Paso
- Fort Myers
- Grand Rapids
- Houston
- New Orleans
- Oklahoma City
- San Antonio
- John Kelly blames Jeff Sessions for ‘zero tolerance,’ family separations along border (USA Today) The controversial “zero tolerance” immigration policy that led border officials to separate children from their parents was the brainchild of then-Attorney General Jeff Sessions and was not handed down from the White House, Chief of Staff John Kelly says. Kelly, who steps down Wednesday after 18 months in the White House, told the Los Angeles Times the administration had no advance warning of Sessions’ plan.
- Trump illegally asked Russia to help him win in 2016. He shouldn’t get away with it. (USA Today) this Op Ed asserts that Trump openly conspired with the Russians right in front of millions of people:
Trump’s public request for Russian help in finding Hillary Clinton’s emails was a violation of US law. There are ways to hold him accountable.
- Exculpatory Russia evidence about Mike Flynn that US intel kept secret (The Hill) For nearly two years now, the intelligence community has kept secret evidence in the Russia collusion case that directly undercuts the portrayal of retired Army general and former Trump national security adviser Michael Flynn as a Russian stooge. That silence was maintained even when former Acting Attorney General Sally Yates publicly claimed Flynn was possibly “compromised” by Moscow.
- Republicans quietly end probe into FBI ‘bias’ against Trump during Clinton and Russia investigations (Independent) A probe into alleged FBI bias against Donald Trump has been quietly and unceremoniously ended by House Republicans. The president’s allies in congress say more investigation is needed over the handling of inquiries into Hillary Clinton’s emails and Mr Trump’s ties to Russia by the FBI and the Justice Department. Despite the year-long investigation, the chairmen of two House committees failed to produce a full report, and instead made public a letter on Friday evening alleging “seemingly disparate treatment” the two probes received in 2016. House judiciary chairman Robert Goodlatte and oversight chairman Trey Gowdy, who are both retiring next week when Democrats gain a majority in the House, called on the Justice Department to appoint a special counsel to investigate further.
In the letter to the Justice Department and senate majority leader Mitch McConnell, they said they reviewed thousands of documents and conducted interviews that “revealed troubling facts which exacerbated our initial questions and concerns“.
- Donald Trump Had a Terrible Week: Weekend Edition (Bloomberg) Since Early Bird had a vacation week (plus) you missed a lot of Op Eds. Here is a review of the top ones from Bloomberg Christmas Week. See also Bloomberg Opinion’s 2018 in 85 Links.
- Trump’s tax cut one year later: What happened? (The New York Times) There was a point in early 2018 when big American companies couldn’t stop talking about the Trump tax cuts. The fawning faded quickly. Analysts noted that the handouts to workers amounted to a relatively small share of the roughly $200 billion in federal income taxes that corporations avoided thanks to the cuts. Wages across the economy ticked up, but not by nearly as much as some Republicans had promised when they voted for the law. Capital investment surged at the start of the year, but the rate of growth fell sharply in the third quarter. After-tax corporate profits rose nearly 20% in the third quarter from the previous year, much more than profits before taxes. Some companies added workers and raised wages, while others cut jobs. In December, SurveyMonkey found, 47% of Americans approved of the law, while 46% disapproved.
- What Do Mueller and the Kremlin Know About Michael Cohen’s Alleged Prague Trip? (Observer) (Econintersect note: Oberver was formerly owned by Jared Kushner and is now owned by a Kushner family trust. The current CEO and publisher is Joseph Meyer, Jared Kushner’s brother-in-law.) No aspect of the scandal surrounding President Donald J. Trump’s hidden relations with Russia has been more controversial than the reputed summer 2016 trip to the Czech Republic by Michael Cohen, Trump’s longtime consigliere. Now, a confluence of intelligence that’s found its way into the hands of special counsel Robert Mueller may finally provide some long-awaited answers.
As reported in the contested dossier compiled by Christopher Steele, the former British senior intelligence officer and Russia expert, Cohen sojourned to Prague in late August or early September of our election year to secretly parley with Kremlin representatives. In Steele’s telling, Cohen went to the Czech Republic to deliver cash to Russian hackers to help swing the 2016 election Trump’s way. This account, if true, describes unambiguous collusion between the Trump campaign and the Kremlin – exactly what the president has always denied occurred. If Cohen met with Russian spies in the late summer of 2016 to conspire against Hillary Clinton, that’s something a lot of Americans would term treason.
- The Government Shutdown Is Going to Hurt More People Each Day It Continues (Slate) White House officials expect the shutdown to extend into the new year as Trump refuses to sign any spending bill that does not include billions in funding for a border wall, while Democrats continue to argue that a physical barrier would be wasteful and ineffective. Around 800,000 government employees are now furloughed or expected to work without pay. Federal agencies have been attempting to continue operating as usual, though funding and staffing lapses have hit some harder than others. Many departments have stated that more employees may be furloughed, and services suspended, as the shutdown progresses and reserve funds become depleted.
- U.S. Stocks End Worst Year Since Financial Crisis: Markets Wrap (Bloomberg) U.S. stocks ended the worst year since the financial crisis with a narrow gain in thin pre-holiday trading. Treasuries rose to a 10-month high. The advance trimmed the worst December rout for the S&P 500 since 1931 to 9.2%. That monthly rout capped a 6.2% slide in the year, the worst year of the record bull market.
EU
- Return to Positive Interest Rates Still a Long Way Off (The Daily Shot) The market’s expectations for the timing of the ECB’s liftoff are getting pushed further out. Eonia is short for Euro OverNight Index Average, also known as the Eorobor overnight rate.
Russia
- Death toll rises to 37 in Russian apartment block collapse (The Guardian) The blast from an apparent gas explosion in the early hours of 31 December damaged 48 apartments in a 10-story building in the industrial city of Magnitogorsk. Rescuers have been working in freezing temperatures to try to recover people trapped under the rubble. As of Thursday morning, 22 of the 37 dead had been identified.
Japan
- Japan confirms it will quit IWC to resume commercial whaling (The Guardian) Japan will resume hunting in its waters in July but will end controversial expeditions to the Southern ocean. Japan is facing international condemnation after confirming it will resuming commercial whaling for the first time in more than 30 years. The country’s fleet will resume commercial operations in July next 2019, the government’s chief spokesman, Yoshihide Suga, said of the decision to defy the 1986 global ban on commercial whaling.
China
- The trade war between the world’s two largest economies is starting to slow their pace of growth, especially in China.
- Apple lowered its first-quarter revenue projection, blaming a slowing economy in China and the trade war for a drop in consumer demand.
- Stocks in Asia were mostly lower Thursday morning and U.S. futures pointed to another volatile session for Wall Street following Apple’s forecast.
- Slower Economic Activity for China 2019 (The Daily Shot) Slower credit expansion does not bode well for China’s economic activity next year.
- China’s Moon Landing: ‘New Chapter in Humanity’s Exploration of the Moon’ (The New York Times) China reached a milestone in space exploration today, landing a vehicle on the far side of the moon for the first time in history, the country’s space agency announced. The landing of the probe, called Chang’e-4 after the moon goddess in Chinese mythology, is one in a coming series of missions that underscore the country’s ambitions to join – and even lead – the space race.
- Behind the El Chapo trial: what’s been left unsaid in a New York courtroom (The Guardian) The alleged Mexican drug kingpin’s trial resumes today but, amid riveting testimony so far, strange silences have lurked. Day-to-day testimony has been like a Netflix thriller, yet it has obscured the nexus of top-level corruption the world’s biggest criminal organisationoperated north and south of the US border. What is missing from this trial is any mention of the vast amounts of money the drug operation provided to Mexico and to U.S. and global interests such as Wells Fargo and HSBC.
Canada
- No North Atlantic right whales killed in Canadian waters in 2018 (The Guardian) Protection measures appear to be working, but the outlook for the whales remain bleak as only 411 are believed to remain worldwide. The habitat range of right whales has become increasingly erratic and unpredictable, making it difficult to anticipate which areas are in need of closure. In recent years, right whales have become a common sight in the Gulf Saint Lawrence – Canada’s busy shipping thoroughfare – setting the stage for deadly interactions with marine traffic.
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