Feb 7, 2019, by Samuel Potter
Every big media organization needs a wall full of clocks, usually to check the time across the world’s major cities. It’s no different at Five Things’ global HQ (Bloomberg basement level 2, left after the stationery supplies), except ours are countdown clocks. They count down to Brexit, the expiry of the U.S.-China trade truce, the 2020 election, and to the next series of the weirdly addictive cult British reality TV show Love Island. But the loudest clock right now is the shutdown clock. The Feb. 15 deadline for U.S. lawmakers to reach a border-security agreement and avert another partial government closure is looming ever larger, and the two sides still appear far apart. The top Democrat working on the deal said a bipartisan agreement by the end of this week should be possible, but President Donald Trump’s refusal to sign a bill without funds specifically for a wall hangs over everything. Acting White House Chief of Staff Mick Mulvaney said if Congress doesn’t agree to Trump’s request for $5.7 billion, “we’ll figure out a way to do it with executive authority.”
Depending who you ask, Theresa May is either a determined pragmatist battling against the odds to fulfill what she sees as a democratic mandate for Brexit, or a blinkered and obstinate career politician simply clinging on by any means possible. Whatever your view, it’s hard to argue her strategy isn’t bold: Just keep doing the same thing, over and over. The U.K. Prime Minister is heading back to Brussels today seeking legally-binding changes to the exit deal she reached last year with her European Union counterparts. Trouble is, there is zero evidence EU officials will be willing to budge, so maybe it’s just that she likes Belgian waffles. If she can’t get a breakthrough, she’s promised British lawmakers she’ll make a statement next week ahead of a potential Parliamentary vote on what to do next. But now an official has suggested that vote could be delayed. It’s clear that finding some solution to this mess is a Titanic challenge, and we’ll let you figure out where that particular analogy ends up…
Clear as mud
There is a segment of the market that thinks too much attention is paid to every single utterance of the world’s central bankers. Cue, today: The financial world is tying itself in knots trying to decipher the somewhat hawkish comments of recently dovish hawkish Fed Chair Jerome Powell, who gave a brief but positive assessment of the economy at an event on Wednesday. Look, it’s perfectly clear: Depending on various stuff, they could either hike, cut or maybe hold. Still confused? Don’t feel bad. Even former Fed head honcho Janet Yellen has no idea what’s next. And since we’re talking policy makers, the Bank of England meets today and is expected to neither cut nor raise while telling us they stand ready to cut or raise. At least one central bank is in the mood to shake things up: Indian policy makers delivered a surprise cut today.
Overnight, the MSCI Asia Pacific Index slipped 0.3 percent with much of the region remaining shut for Lunar New Year celebrations. Japan’s Topix index ended down 0.8 percent as the yen edged higher. In Europe, the Stoxx 600 Index dropped 0.6 percent at 6:19 a.m. Eastern Time as investors digested a big cut to the growth outlook by officials. S&P 500 futures pointed to a slide at the open, the 10-year Treasury yield was at 2.668 percent and gold was steady.
Like data? Jobless claims come at 8:30 a.m., with Bloomberg’s Consumer Comfort number at 9:45 a.m. and Fed Consumer Credit details at 3:00 p.m. Like earnings? We got you. Amid a deluge of U.S. corporate reports the standouts include Philip Morris International Inc., Kellogg Co. and something called Twitter Inc. That Bank of England expected hold is at 7:00 a.m., by the way.