Written by Gary
US stocks end mixed as global growth concerns dampen earnings optimism (SPY +0.1%). Closed near yesterday’s closing.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | No-deal Brexit would cost Ford up to $1 billion: sourceFord faces a bill of up to $1 billion if Britain leaves the European Union without a deal, comprising World Trade Organization tariffs and the impact of a weaker pound, a person familiar with the company’s plans said on Thursday. |
| U.S. government shutdown threatens rollout of new car models: automakersThe partial U.S. government shutdown is threatening to delay the roll-out of new vehicle models in the United States by stalling required certifications from the Environmental Protection Agency, automakers said. |
| Google asks U.S. Supreme Court to end Oracle copyright caseAlphabet Inc’s Google on Thursday asked the U.S. Supreme Court to reverse a ruling that resurrected a billion-dollar copyright case brought by Oracle Corp that dates to 2010. |
| ‘Under siege’, oil industry mulls raising returns and PR gameWhen the global oil industry held its biggest annual gathering this week in the Swiss town of Davos, it invited banking bosses and fund managers to discuss two key topics – climate change and pressure from investors. |
| J.P. Morgan pares U.S. first quarter GDP view to 1.75 percentJ.P. Morgan economists reduced their outlook for U.S. economic growth in the first quarter to 1.75 percent from 2.00 percent as the partial U.S. government shutdown has stretched to a second month for the longest one ever, they said on Thursday. |
| Stocks meander, bonds up after ECB, U.S.-China trade talkStocks flitted between positive and negative territory on Thursday while U.S. Treasuries were in demand after the European Central Bank chief said economic growth was likely to be weaker than previously expected and the United States was cautious on prospects for a trade deal with China. |
| ‘Maddening’ U.S. shutdown hangs over airlines even as profits beatThree major U.S. airlines said on Thursday the U.S. government partial shutdown had not yet had a major financial impact but a tipping point might be near. |
| S&P 500, Dow sag on trade worries, chipmakers lift NasdaqThe S&P 500 and the Dow edged lower on Thursday as lingering anxieties about slowing global growth and unresolved trade disputes kept buyers at bay, but chipmakers rallied to push the Nasdaq into the black. |
| Harvard, Levi Strauss, U.S. think tank in blockchain tie-up on worker welfareHarvard University’s public health graduate school, U.S. think-tank New America, and American apparel company Levi Strauss & Co announced on Thursday a collaboration to develop a blockhain-based system designed to augment outside auditors of factory health and safety with self-reporting by workers. |
| Bonds & Dollar Bid And Kudlow Rescues Stocks From Ross RoutPlunging PMIs, “miles and miles” to go on US-China trade talks, and no end in sight for the shutdown… so wheel Larry Kudlow out on TV to talk up everything and rescue stocks… Chinese markets bounced back to unch on the week overnight…
UK’s FTSE continues to tumble as Spain outperformed despite ugly PMIs across eurozone… |
| Elon’s “Musk Foundation” Under Scrutiny For Donating Close To HomeBetween a volatile (to say the least) 2018 and a start to 2019 that included laying off even more of his Tesla workforce and one of his spaceships being blown over by the wind, Elon Musk looks slated for another year mired in controversy. The latest of Musk’s ventures being scrutinized is now his charitable foundation, which was the subject of a Guardian longform write-up this week. The article states that Musk’s charitable foundation has gone to enrich causes close to, or directly tied to, Musk and his immediate family. The charity has given more money to artificial intelligence causes than to any of the traditional charities that it supports, according to the article. The charity’s website, MuskFoundation.org, states that grants are made in support of: Renewable energy research and advocacy Human space exploration research and advocacy Pediatric research Science and engineering education Development of safe artificial intelligence to benefit humanity We all know that Musk likes to be the center of attention when it comes to charitable causes, whether it is embarrassing himself trying to unprovokedly thrust his services into the Thai cave rescue or claiming that he’s g … |
| Senate Blocks Both Bills To End Government ShutdownThe U.S. Senate has blocked legislation that incorporates President Trump’s proposal to fully open the government and includes his demand for $5.7 billion to help build a border wall, as the partial government shutdown approaches its 35th day – the longest in US history.
While Sen. Joe Manchin (D-WV) joined Republicans to advance the measure, it failed by a margin of 50-47, far short of the 60 votes needed to defeat a filibuster. GOP Senators Mike Lee (Utah) and Tom Cotton (Arkansas) surprisingly voted against Trump’s plan. Lee is considered a fiscal hawk, while Cotton is considered one of the Senate’s most conservative members when it comes to immigraiton. Senate Republicans also blocked a stopgap measure to end the partial shjutdown, voting 52-44 on the legislation, also short of the 60 votes needed to defeat a filibuster.
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| Beware The ‘Recession-Deniers’Authored by Sven Henrich via NorthmanTrader.com, Complacency Complacency is back and comes in the form of recession denial in the face of global slowing data. We didn’t see the slowdown coming but we are confident it will not produce a recession so the narrative goes. Not even a risk of a recession. You’re hearing it from the Fed, the White House, the IMF and every Wall Street firm, the ECB and the BOJ, the chorus is sung with uniformity. No recession.
Not only is there no recession the slowdown creates a bullish paradox is the message. Because of the slowdown central banks will remain accommodative and hence the global debt construct will not be further burdened by higher rates and the party can keep on going. So fear not, buy stocks. But how can anyone be sure that the slowdown in data will not produce a recession? After all recessions come not only on inversions of yield curves, but historically they are coming at the end of business cycles with low unemployment rates and waning confidence. |
| Trump Today: President’s plan to end shutdown and fund wall stymied in SenateA measure that would end the partial government shutdown while providing $5.7 billion for President Donald Trump’s proposed border wall falls short of the 60 votes needed to advance, as does a rival bill that would withhold wall money. |
| The Tell: Venezuela’s defaulted bonds gain luster on regime change hopes, says economistInvestors see fresh opportunities in Venezuela’s defaulted government bonds in the hopes that recent unrest in the inflation-ravaged country could lead to regime change and a restructuring of its debts. |
| Bond Report: Treasury yields follow Europe lower after downbeat ECB commentaryTreasury yields fall Thursday, following the decline of European bond yields, after European Central Bank President Mario Draghi underlined the growing risks to the eurozone economy’s prospects. |
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