Jan 10, 2019, by Lorcan Roche Kelly
Yesterday’s meeting between President Donald Trump and Congressional Democrat leaders produced no progress towards resolving the government shutdown as talks collapsed soon after they began. Trump, who walked out of the discussion yesterday, is travelling to the Mexican border today to rally support for his stance on the wall. Barring a last-minute change of heart by either side, 800,000 federal workers will miss their paychecks tomorrow. Republicans in Congress may be starting to lose patience with the president’s position as they hold their own meetings in an attempt to find a solution to the impasse.
Ford Motor Co. announced it will cut thousands of jobs in Europe and may close some plants as the automaker tries to return the business unit to profitability. In the U.K., Jaguar Land Rover, once owned by Ford, will announce 5,000 job cuts later today, according to reports. The news comes only a day after China reported the first fall in car sales in the country in at least two decades.
Theresa May lost a vote in parliament yesterday which means she will have to quickly present her plan for what to do if she, as expected, loses a vote on the Brexit deal agreed with the European Union next week. With control starting to slip from the hands of the British Prime Minister, some now see a lower chance of a so-called “hard Brexit” on March 29. Austrian Chancellor Sebastian Kurz became the first European Union leader to suggest that an extension to the deadline for the British withdrawal now needs to be considered.
Overnight, the MSCI Asia Pacific Index lost 0.1 percent while Japan’s Topix index closed 0.9 percent lower as initial optimism over trade talks between the U.S. and China was tempered by the lack of solid details from the meetings. In Europe, the Stoxx 600 Index was 0.3 percent lower at 5:45 a.m. Eastern Time as more disappointing industrial production numbers added to the cautious mood. S&P 500 futures pointed to a drop at the open, the 10-year Treasury yield was at 2.699 percent and gold was largely unchanged.
With today’s wholesale inventories and sales data falling victim to the shutdown, initial jobless claims numbers at 8:30 a.m. are the only important economic data point on the calendar today. However, there is a long list of Federal Reserve speakers due. In order of appearance: Richmond Fed President Thomas Barkin, Fed Chairman Jerome Powell, St. Louis Fed President James Bullard, Chicago Fed President Charles Evans, Minneapolis Fed President Neel Kashkari and Fed Vice Chairman Richard Clarida.