Daily Macro Links – Specter of Global Trade War 
- GEOPOLITICS, CRIME, TERRORISM
- PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
- PROPAGANDA, CORRUPTION, AUTHORITARIANISM
- RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
- MACRO OP-EDS, DATA, INQUIRY AND THEORY
- CENTRAL BANKS & MONETARY POLICY
- POSITIONING, INFLECTION, MARKET CALLS
- COLOR, EARNINGS, SENTIMENT, VALUATIONS
- DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
- TAXATION, HAVENS, TRADE, PROTECTIONISM
- FOREX, CURRENCY IMPACTS
- REAL ESTATE, HOUSING, REITS, COMMERCIAL
- HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
- USA ECONOMY DATA
- GLOBAL ECONOMY DATA
- ENERGY COMPANIES, NOCs, INDUSTRY
- ENERGY CRUDE OIL, OIL SANDS, SHALE
- ENERGY RENEWABLES, NUCLEAR
- COMMODITIES BASE METALS, MATERIALS
- COMMODITIES AGRICULTURE & SOFTS
- POLLUTION, CLIMATE & ENVIRONMENT
- FRONTIER MARKETS
- EMERGING MARKETS
- CANADA, AUSTRALIA, NEW ZEALAND
- BREXIT, LONDON, UK ECONOMY
- TRUMP WORLD
- ELECTORAL POLITICS
- DEMOGRAPHICS, INEQUALITY & POPULISM
- SCANDALS, LAWSUITS, FINES, REGULATORY
- BANKS, BROKERS, INSURANCE, XCHANGES
- SILICON VALLEY, UNICORNS, STARTUPS, VC
- CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
- CLOUD, SILICON, ENTERPRISE / SAAS
- RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
- MEDIA, CABLE, SPORTS, ENTERTAINMENT
- AUTOS, ELECTRIC, SELF-DRIVING
- AIRLINES, SHIPPERS, RAIL, TRANSPORTS
- HEALTHCARE, PHARMA, BIOTECH
- SCIENCE, NATURE, PSYCHOLOGY
GEOPOLITICS, CRIME, TERRORISM
“I don’t need the Mexicans. I don’t need Mexico,” Trump reportedly told the Mexican president. “We are going to build the wall and you all are going to pay for it, like it or not.”
Trump hinted that the US would force Mexico to fund the wall with a 10% tax on Mexican exports “and of 35% on those exports that hurt Mexico the most,” Estevez wrote in Proyecto Puente.
Before the call, White House press secretary Sean Spicer said Trump was considering a tax on imports from Mexico to pay for the wall.
Australia’s relationship with the United States, its closest ally, has been rocked by the leaking of a fiery telephone conversation between Malcolm Turnbull and Donald Trump over the proposed refugee resettlement deal.
Relations between the nations were plunged into confusion on Thursday after a bombshell report in The Washington Post detailed that President Trump had called the arrangement the “worst deal ever”, called the Saturday phone call “the worst call by far” he had had with a world leader and that the President had hung up on Mr Turnbull after just 25 minutes when the two men spoke.
President Donald Trump suggested he could back out of an agreement the Obama administration reached with Australia to take in 1,250 refugees, potentially straining ties with a close U.S. ally.
Donald Trump’s closest advisor thinks that the US will be at war with China in the next few years. The far-right figure, who has been given unprecedented power in the White House and has suggested in the past that he supports white supremacy, suggested that the two countries are headed towards war over the South China Sea.
China is stepping up preparedness for a possible military conflict with the US as the Donald Trump presidency has increased the risk of hostilities breaking out, state media and military observers said.
Beijing is bracing itself for a possible deterioration in Sino-US ties, with a particular emphasis on maritime security.
The People’s Liberation Army said in a commentary on its official website last Friday, the day of Trump’s inauguration, that the chances of war have become “more real” amid a more complex security situation in Asia Pacific.
Donald Trump’s administration declared that it was putting Iran “on notice” on Wednesday, signalling both a tougher US line with Tehran and a new test of relations after a weekend missile test by the Islamic republic.
During his campaign, Mr Trump vowed to rip up a 2015 nuclear deal negotiated by the Obama administration and other world powers with Tehran but has taken no public steps to deliver on that since taking office.
In a terse statement delivered on Wednesday by retired general Michael Flynn, the new national security adviser, the White House signalled that was about to change, as the Trump administration faced its first potential security-related foreign policy crisis.
Beyond the tougher words, the administration didn’t offer details of what policy or military options it may be considering. An administration official, who asked not to be identified, told reporters afterward that there are a range of options available to counter Tehran’s actions.
Iran confirmed Wednesday it recently conducted a ballistic missile test launch, a move that drew criticism from U.S. and Israeli officials this week and raised concern about the potential violation of a United Nations Security Council resolution.
The operation was launched to gather intelligence on suspected operations by al-Qaida in the Arabian peninsula (AQAP), according to Thomas. Planning for the raid “started months before”, under Barack Obama’s administration, but was “not previously approved”, he said.
Thomas said he did not know why the prior administration did not authorize the operation, but said the Obama administration had effectively exercised a “pocket veto” over it.
A former official said the operation had been reviewed several times, but the underlying intelligence was not judged strong enough to justify the risks, and the case was left to the incoming Trump administration to make its own judgment.
On the campaign trail, Trump endorsed killing relatives of terrorist suspects, which is a war crime. “The other thing with the terrorists is you have to take out their families, when you get these terrorists, you have to take out their families,” he told Fox News in December 2015.
The White House has said a five-year-old boy was detained for more than four hours and reportedly handcuffed at an airport because he posed a “security risk”. The boy, reportedly a US citizen with an Iranian mother, was one of more than 100 people detained following President Donald Trump’s immigration order.
In a press briefing, Mr Trump’s press secretary Sean Spicer was unrepentant about the incident. He said: “To assume that just because of someone’s age and gender that they don’t pose a threat would be misguided and wrong.”
Theresa May told Parliament that Donald Trump’s travel ban was “divisive and wrong,” as she defended her decision to seek a close relationship with the new U.S. president.
The words were the strongest condemnation that the U.K. prime minister has used against the ban on refugees and travelers from seven predominantly Muslim countries. Still, she went on to argue that Britain’s interests were best served by engaging with Trump as much as possible.
The White House has launched a review of its policy on North Korea, reflecting the growing nuclear threat from Pyongyang that Barack Obama told Donald Trump would represent his most pressing national security challenge.
Two people familiar with the review, which the White House has not disclosed, said it was designed to determine what the Trump administration could do differently to address concerns that North Korea could strike the US with a nuclear-armed missile. One person said Michael Flynn, national security adviser, ordered the review on Friday.
Mr Trump has personally had several detailed intelligence briefings in recent days, according to a third person familiar with the discussions.
Recent video footage by a Russian-language news agency shows the Chechen-led formation patrolling the city’s battered landscape in armored trucks and personnel carriers.
PRIVACY, HACKING, CYBERWAR, SURVEILLANCE STATE
The decision to forgo electronic counting, in national elections scheduled for next month, was a response to fears that outside actors, like Russia, might try to tamper with the election.
The charges follow US accusations that Russian intelligence hacked Democratic party servers last year. While there is no direct link between those accusations and the latest arrests, Russian media say the FSB investigation into the two men began after ThreatConnect, a US cyber security company, alleged that hackers used King Servers, an internet hosting company, to attack US state election rolls. The business partner of the owner of King Servers has long accused Mr Mikhailov of working for the FBI.
This is believed to have prompted the investigation into Mr Mikhailov and Mr Dokuchaev, a former hacker known as “Forb” who joined the secret services to avoid prison, according to the Interfax news agency. The men were arrested as part of a wider-reaching investigation into a group that, according to the Interfax report, conducted cyber attacks, stole private information from people close to the Kremlin, and worked as sources for US intelligence.
Prosecutors in Moscow suspect that U.S. intelligence compromised one of Russia’s most senior cybersecurity officials and have charged him and at least two others with treason in the case, according to a lawyer involved.
The three were detained in December and include Sergei Mikhailov, who was a top official in the information-security division of the Federal Security Service, the main successor to the KGB, and Dmitry Dokuchaev, a member of his staff. The third suspect to be named publicly is Ruslan Stoyanov, a manager at Kaspersky Lab, a Russian cybersecurity company.
Desperate to develop its own mineral deposits, resource-hungry India is trying to revive investment by taking aim at illegal miners like the sand mafia — from a few hundred feet in the air.
The government will deploy flying camera drones to track renegades who for years have been extracting everything from sand to coal to iron ore without permits. Unsanctioned diggers pay no tax, violate the mineral rights of others and employ rudimentary methods blamed for widespread environmental damage. They’re also hard to catch, working in remote areas and sometimes getting help from corrupt officials.
Donald Trump’s election raised the prospect of the U.S. blocking the flow of cash to make its southern neighbor pay for a border wall.
Remittances rose 6 percent in December from a year earlier to $2.34 billion, the most ever for the holiday season, according to data released by Mexico’s central bank on Wednesday.
The adoption of credit-card chip technology by U.S. retailers is having an unintended consequence: Criminals are moving from brick-and-mortar stores to the internet.
The use of stolen card data to pay for merchandise on websites, in mobile apps and by dialing call centers surged 40 percent last year, according to a report from Javelin Strategy & Research released Wednesday. That’s forcing merchants to spend billions on online fraud protection in an effort to detect when a crook is using someone else’s card number.
PROPAGANDA, CORRUPTION, AUTHORITARIANISM
A top U.A.E. official defended the Trump administration against accusations that the U.S. travel ban on citizens of seven predominantly Muslim countries is targeting Islam.
“The vast majority of Muslims and Muslim countries have not been affected by this ban,” United Arab Emirates Foreign Minister Sheikh Abdullah bin Zayed told a news conference in Abu Dhabi on Wednesday. “This is a temporary ban that will be reviewed within three months. It’s important to take these points into account.”
The Trump administration wants to revamp and rename a U.S. government program designed to counter all violent ideologies so that it focuses solely on Islamist extremism, five people briefed on the matter told Reuters.
The program, “Countering Violent Extremism,” or CVE, would be changed to “Countering Islamic Extremism” or “Countering Radical Islamic Extremism,” the sources said, and would no longer target groups such as white supremacists who have also carried out bombings and shootings in the United States.
A leaked copy of a draft executive order titled “Establishing a Government-Wide Initiative to Respect Religious Freedom,” obtained by The Investigative Fund and The Nation, reveals sweeping plans by the Trump administration to legalize discrimination.
Tech billionaire and Trump adviser Peter Thiel has sparked a passport-for-sale row in New Zealand after it was revealed he was granted citizenship in 2011 despite visiting the nation only four times.
Thiel’s application was approved by the New Zealand government on the grounds his entrepreneurial skills and philanthropy were beneficial to the country, even though he didn’t meet the standard criteria or intend to live there, official documents released late Wednesday in Wellington show.
New Zealand has become a preferred bolthole for the ultra rich as they seek a haven from global political uncertainty and terror threats. Opposition parties accuse the government of turning citizenship into an asset wealthy foreigners can buy, a claim Prime Minister Bill English has denied.
The company, once a haven for right wing extremism, is cracking down on the hub of white nationalists—right after its founder blasted Trump’s ban on immigrants and refugees.
President Donald Trump’s UN ambassador started her first day saying she’s prepared to “take names” of countries that oppose the U.S., as the new administration in the White House starts its overhaul of foreign policy.
The U.S. will “have the backs of our allies and make sure that our allies have our back as well,” Ambassador Nikki Haley told reporters at the United Nations on Friday. “For those that don’t have our back, we’re taking names. We will make points to respond to that accordingly.”
“He has severed himself in a pretty final and conclusive way, and I just don’t see him being influenced given the structure of his disengagement,” Stan Brand, an ethics lawyer at Akin Gump Strauss Hauer & Feld, said in an interview.
Yet the $350 billion company is so big, and so deeply entrenched in countries around the world, that Tillerson’s past will inevitably shadow him, critics say. They say that no ethics agreement can protect against Tillerson viewing the world through “oil-coated glasses,” as Senator Ed Markey, a Massachusetts Democrat, said this week.
Panasonic Corp said on Thursday its avionics business is being investigated by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) under the Foreign Corrupt Practices Act (FCPA) and U.S. securities-related regulations.
Romania’s political crisis deepened Thursday as a minister pledged to resign amid the largest protests since the collapse of communism following sudden changes to criminal law that undermine a four-year anti-corruption clampdown.
Business Environment Minister Florin Jianu said he couldn’t support the government’s stance after at least 300,000 people took to the streets of cities across the country. About 150,000 gathered in freezing temperatures outside the government building in Bucharest on Wednesday evening, the Digi24 TV station and News.ro estimated.
RATES, LIQUIDITY, SYSTEMIC RISK, BALANCE SHEETS
Inflation across the world is beating analysts’ forecasts even before the potential effect from Donald Trump’s economic policies. The global Citi Inflation Surprise Index, which measures price surprises relative to market expectations, is at the highest in more than five years. The reading turned positive in December — meaning inflation data were higher than expected — for the first time since 2012.
For the high-yield bond market, the root of the problem problem now is that it isn’t living up to its name. Yields just aren’t high enough. Investing in low-rated companies is a skillset that requires a lot of due diligence, and for that extra effort and risk taken there needs to be a commensurate reward.
The ECB’s well-meaning actions are actually now deterring financing in the very area it is trying to support — financing for small- and medium-sized companies, the engine of the economy. Investor demand is very clearly still there for a juicy coupon, as can be seen from the order books for Tier 1 issues, where coupons can be around 8 percent. It’s quite a different matter to buy high-risk debt that yields next to nothing.
Almost a decade on from the financial crisis, a global deadline for reform of the $544tn derivatives market has triggered a last-minute scramble by hundreds of small banks, insurers and pension funds.
Many of these institutions use bespoke derivatives such as swaps to protect their operations from sudden changes in asset prices. In a month’s time they face higher costs and regulatory burdens. Plenty are not ready.
MACRO OP-EDS, DATA, INQUIRY AND THEORY
“A massive clash is starting to emerge with Trump willing to get into major geopolitical spats with China and other countries to advance his ‘America First’ agenda,” Mark Leonard, director of the European Council on Foreign Relations, said in a phone interview.
The sparks that have dominated the initial days of Trump’s presidency have set the stage for increased tensions over global trade and currency regimes. Decades of economic ties are at stake. Signs that the U.S. will favor bilateral trade agreements at the expense of multilateral deals have forced world leaders to define their own red lines, and forge new alliances.
The Trump administration’s willingness to break with tradition and comment about currency valuations has raised fears that the US might lead the world into a new round of currency wars, angering and unnerving allies.
Stephen Mnuchin, the former Goldman Sachs banker whom Mr Trump has tapped for treasury secretary, has publicly adopted a more cautious approach than the new president. During his confirmation hearing last month he told senators that he believed the “long-term strength” of the dollar was “important”.
But the chaotic start to the administration and what many see as its protectionist agenda have amplified fears of not only currency wars but a fully fledged trade confrontation that could be disastrous for the world economy.
It took only one week of bilateral engagement between the new U.S. administration and Mexico to throw the relationship into a tailspin.
Mexico is not the enemy. And neither should it be taken for granted or simply be an afterthought for U.S. national security and foreign policy interests. Trump, despite his evident disdain for Mexico, cannot press Control-Alt-Delete and dispense with a nation on his border. If you approach a relationship as complex as ours — which has so many moving parts and which profoundly affects so many facets of U.S. public policy and interests — with a chainsaw, as Trump has done, you are bound to cut off your own foot.
Mexico is certainly no military power and does not possess nuclear weapons, nor cannot it threaten or challenge Washington’s core interests. But it is not toothless, either. It can impose compensatory tariffs (as we did in 2009 to ensure U.S. compliance regarding the access of Mexican trucks). Moreover, Mexico deepened intelligence and counter-terrorism cooperation with the United States after the heinous terrorist attacks of 2001, convinced that we needed to enhance North American common domain awareness, and that by having Washington’s back, we would continue to foster a vision of two neighbors and partners intent on building a paradigm of common prosperity and common security.
It’s the kind of economic backdrop that helped propel Donald Trump to the White House, fueled the U.K.’s Brexit vote and lifted support for populist parties across Europe. But on a staging ground where Russian and western influences collided throughout the 20th century, disillusionment carries even greater dangers: blood-and-soil beliefs that triggered the Yugoslav wars are finding new life in the new world order.
As Trump belittles NATO and sends conciliatory signs to the Kremlin, Russian President Vladimir Putin is stepping in. He has pledged to strengthen defense cooperation with Serbia, a traditional ally, donating six used MiG-29 fighter planes to the army. He also offered the country to join a trade agreement that would be incompatible with Serbia’s plan to join the European Union.
“The Balkans have always been a cauldron of risks boiling over, and in this sense, the situation is not much different from the situation 20, 50 or 100 years ago,” said Konstantin Kosachyov, head of the Russian upper house of parliament’s foreign affairs committee and a former aide to Yevgeny Primakov, prime minister during the Kosovo conflict who aborted a U.S. trip when the bombing started.
Looming polls in France, the Netherlands and potentially Italy have reignited concerns about members’ commitments to the single-currency bloc just as Greece’s debt woes are back on the radar screen. Even so, when it comes to picking European equities, getting the sector right is likely to remain more important than choosing between countries, according to Goldman Sachs Group Inc. analysts led by by Lilia Peytavin and Peter Oppenheimer.
“Although dispersion of returns across countries remains far less important than across sectors, country risk has picked up recently and could increase further ahead of elections,” they wrote in a note published this week, adding that the situation could escalate if concerns surface over a tapering in the European Central Bank’s monetary stimulus.
The dollar’s worst start to the year in more than a decade is just a blip on its path to further gains, according to Goldman Sachs Asset Management, which oversees more than $1 trillion.
The money manager is betting on the greenback and a steeper yield curve as a reflationary era takes hold in the U.S. and other countries, said Philip Moffitt, the Asia-Pacific head of fixed income who is based in Sydney. The dollar will continue to strengthen against the euro and yen as policy makers in Europe and Japan maintain quantitative easing while the Federal Reserve is set to raise interest rates about three times this year, he added.
“It’s just a bit of a pause in the new trend,” he said in a phone interview. “There’s been a profound shift away from fiscal orthodoxy and deflation threats to a more reflationary policy environment globally that’s seen most strongly in the U.S.”
A vision of Islam as inherently hostile has long flourished on the far right. Now President Trump has brought that view to the White House.
This worldview borrows from the “clash of civilizations” thesis of the political scientist Samuel P. Huntington, and combines straightforward warnings about extremist violence with broad-brush critiques of Islam. It sometimes conflates terrorist groups like Al Qaeda and the Islamic State with largely nonviolent groups such as the Muslim Brotherhood and its offshoots and, at times, with the 1.7 billion Muslims around the world. In its more extreme forms, this view promotes conspiracies about government infiltration and the danger that Shariah, the legal code of Islam, may take over in the United States.
Those espousing such views present Islam as an inherently hostile ideology whose adherents are enemies of Christianity and Judaism and seek to conquer nonbelievers either by violence or through a sort of stealthy brainwashing.
Jared Kushner, where are you?
I ask that specifically, in terms of Trump’s inner circle and Bannon’s obviously greater sway. But I ask it in a broader sense as well. Where among Trump’s sanest advisers and the most reasonable Republicans in Congress is the degree of pushback that’s called for? Where are the sufficiently loud voices of dissent? Right now Trump has too many mum collaborators too content to hope for the best. I put Kushner in that pack.
If Kushner has sturdy principles or half the say that Bannon does, then explain the wording of the statement that the president put out on Friday in remembrance of the Holocaust. It failed to mention Jews, an omission so glaring that it incited a furor among Jewish Republican groups. And rather than apologize to them, the administration dug in, reprimanding them for being too touchy.
This had all the markings of Bannon, who deplores what he deems the politically correct coddling of minority groups. But it seemed to go against what Kushner holds dearest. He’s the descendant of Holocaust survivors, including a grandmother who helped to found the United States Holocaust Memorial Museum and once complained of America’s reluctance to take in Jewish refugees who were trying to avoid extermination.
Rejecting the premise of international accords is one thing. But displaying irrationality for effect, without a rational objective, can end in war.
War would be a uniquely bad idea. China, after all, has nuclear weapons. But perhaps what troubles the professor most is that Mr. Trump’s stand seems pointless. “One can justify provocative moves if they serve an important strategic goal,” Mr. Mearsheimer told me. “It is not clear what purpose these moves are designed to serve.”
And yet pointlessness is coming to define American foreign policy. Mr. Trump lacks an end game.
Security experts in the United States are baffled by Mr. Trump’s executive order abruptly barring entry by citizens from seven mostly Muslim countries, noting that it will ultimately put the security of the United States at risk by sending a uniform message of hostility to 1.6 billion followers of Islam.
In Mexico, government officials are scratching their heads about what Mr. Trump hopes to achieve by threatening to walk away from the trade agreement that has cemented bilateral relations for the last quarter-century. And who knows what Mr. Trump thinks the United States would stand to gain by leaving the World Trade Organization?
“What is a better Nafta?” asked Douglas Irwin, a trade historian at Dartmouth College. “He hasn’t said.”
Strategies for dealing with Mr Trump have diverged. Some companies have tried to negotiate their way out of his Twitter attacks, wielding facts and figures. Others have tried using their own “alternative facts”, repackaging planned investment and jobs as “new”, or have mixed fact with flattery.
One chief equated life under the new president to dealing with a “natural disaster”: no one in corporate America knew where he would strike next — or how it would hit their share price.
For 70 years, we have thrived in the embrace of an America that believed in freedom and stood up to evil. We have seen America get it badly wrong but we have never seen it ready to retreat from the fight. For all its mistakes, only the hard left considered it the world’s greater evil. All those years later, we are still quoting the inspirational rhetoric of the Kennedy inaugural speech and Martin Luther King’s words from the march on Washington. So yes, it was a place of low politics and high ideals. Now it is just a place of low politics.
Perhaps this too shall pass. We have had bad men in the White House before. But the angst so many feel about Trump goes beyond his views, or fear that he might start a war. Many feared Ronald Reagan. But his was an optimistic country whereas Trump’s America is a dark, fearful and insular place. Reagan’s was an America that would stand tall in the world; right now, the home of the brave is crouched in a corner. And while the most extreme fears — the talk of fascism — will surely prove overblown, it seems remarkable even to consider America in such terms.
During nearly four years as an immigration officer with Homeland Security, I conducted in-person interviews with hundreds of refugees in 10 countries from 20 different nationalities. I have had countless refugees break down crying in my interview room because of the length and severity of the vetting process. From that experience and numerous security briefings, I can affirm that whoever wrote Trump’s executive order blocking refugees from the United States is wholly unfamiliar with the U.S. immigration system, U.S. laws, international law and the security threats facing our nation. I can’t speak for all refugee and asylum officers, but I can say that those who have been working in immigration for years from opposite ends of the political spectrum are appalled by these new policies.
According to the New America Foundation, jihadists killed 94 people inside the United States between 2005 and 2015. During that same time period, 301,797 people in the US were shot dead, Politifact reports.
At first blush, these numbers might seem to indicate that Donald Trump’s temporary ban on immigrants from seven countries—a goal he said was intended to “protect the American people from terrorist attacks by foreign nationals admitted to the United States”—is utterly misguided.
But Trump is right about at least one thing: Americans are more afraid of terrorism than they are of guns, despite the fact that guns are 3,210 times more likely to kill them.
Even in these hyper-partisan times, loathing for Opec still unites most Americans. Yet paradoxically, over four decades from the early 1930s to early 1970s, the United States was Opec, and much better at oil supply manipulation and price fixing than today’s Opec ever was.
Up until 1972, independent US oilmen and oil states like Texas acquiesced to heavy-handed government regulations over oil, imposing monthly quotas on producers. This was all done to vanquish chronic booms and busts that vexed the oil industry, consumers, investors, and officials.
This paradox bears directly on the epic, structural shift currently under way in the global oil market, with far-reaching repercussions not only for oil and energy, but also economic growth, security, and the environment. Wildly gyrating oil prices over the past decade mark the demise of Opec as an effective supply manager and the return of free crude oil markets. The resulting unwelcome and likely protracted return of boom-bust oil prices constitutes a major and under-appreciated financial, economic, and geopolitical risk to consumers, businesses, the incoming administration and governments worldwide.
CENTRAL BANKS & MONETARY POLICY
The political landscape has eroded for the Fed in recent years, and Ms. Yellen has struggled to confront the challenge.
Once revered as the masterminds of the U.S. economy, Fed policy makers now face the most intense political scrutiny in a generation. The path of monetary policy, which is emerging from a decade of basement-level rates, is being debated in the political arena in a way not seen since the Paul Volcker era in the 1980s.
The person leading the institution isn’t a politician—she’s a macroeconomist who spent most of her career at the Fed and in academia. Yet the task ahead of her, now that Donald Trump is president, might require a different set of skills. The new president thrust Ms. Yellen and the Fed onto the national political stage by criticizing them sharply during the campaign, and his election raised expectations that GOP bills to rein in the central bank could become law.
The Federal Reserve said Wednesday it remains on track to gradually raise short-term interest rates this year and gave no hint about when the next increase might come. Following a two-day policy meeting, officials unanimously held their benchmark rate steady in a range between 0.50% and 0.75%, while noting in a statement some recent improvements in the economy.
Federal Reserve officials left interest rates unchanged while acknowledging rising confidence among consumers and businesses following Donald Trump’s election victory.
Like everyone trying to figure out where the U.S. economy is heading, the Federal Reserve is waiting to see what the whirlwind of executive orders and remarks from President Donald Trump mean for growth as they weigh the timing of the next interest-rate hike.
Investors are making two different bets on the markets and on the Federal Reserve. They can be right on only one of them.
The reason for the difference is investors have baked into their forecasts Mr. Trump’s stimulus and bid up markets in anticipation. The Fed has to be more cautious and can’t act based on policies that Mr. Trump and congressional Republicans haven’t even put together yet. It won’t be until Mr. Trump puts his signature to those policies that the Fed will be able to incorporate them into their forecasts and set policy appropriately.
The Turkish central bank’s unorthodox efforts to support the lira are breathing life into the nation’s battered markets even as some investors remain concerned about the effectiveness of the policy maker’s approach.
The lira has bounced from a record low reached earlier this month as the central bank’s efforts to tighten liquidity through daily funding operations pushed up funding costs to an almost five-year high. The currency’s volatility has also been damped by foreign-exchange swap auctions, while the nation’s bonds have jumped.
POSITIONING, INFLECTION, MARKET CALLS
The market this week is dealing with the realization that President Donald Trump means all the things he says. He really is a protectionist, really does think America needs to be protected from the world both economically and physically. He really does make policy without much care or thought to get details right, he really has recruited an honest-to-God terrible team, and it actually is kind of dangerous.
For months, Wall Street strategists scrambled to justify a post-election rally most didn’t see coming by claiming Trump’s proposed tax cuts and vague infrastructure spending plans would goose growth, while discounting his vow to impose trade barriers as not really serious. Ten days into his presidency, the president has alienated our third-biggest trading partner in Mexico while having his spokesman float vague proposals about 20% taxes the president himself says might apply to all imports.
The post-election movements of U.S. stocks have been heavily influenced by policy. First they soared, then they traded in a narrow range. Now the markets have entered a period of greater volatility underpinned by a tug of war between the expectation of reflationary policies and the risk of stumbling into stagflation. Where we end up will be predominantly a political call.
Specifically, the implementation of a well-designed set of policies built around the president’s three headline initiatives — tax reform, deregulation and infrastructure — would unleash reflationary forces that would validate existing asset valuation, and could take them a lot higher if the rest of the world were also to improve its policy mix. If, however, the U.S. stumbled into protectionism and trade wars, the markets would give up more of the recent gains, and possibly even overshoot on the way down.
COLOR, EARNINGS, SENTIMENT, VALUATIONS
People seem to be easing up on their ammunition buying after the presidential election.
DEALS, MERGERS, IPOs, LBOs, RESTRUCTURINGS
With pent-up demand from 2016 and the challenges of an unpredictable U.S. administration ahead, companies seeking to get deals done kicked off this year with a bang.
Global M&A activity amounted to $224 billion in January, the highest volume since 2000 in the first month of the year, according to data compiled by Bloomberg. For the first time since 2008, Europe topped North America on the list of target regions, as firms from Swiss drugmaker Actelion Ltd. to Italian eyewear maker Luxottica Group SpA agreed to be bought.
TAXATION, HAVENS, TRADE, PROTECTIONISM
Whether or not a border tax proposed by Republican congressional leaders helps U.S. President Donald Trump pay for his Mexico border wall, it would have a radical impact on global trade patterns.
Deutsche Bank AG economists Robin Winkler and George Saravelos have calculated the amount of trade with the U.S. that countries stand to lose if they face a 20 percent penalty at the border. Mexico is the obvious biggest loser, but Canada and Asian manufacturing economies including Vietnam, Malaysia and Thailand would also be in line for a big hit.
Jeffrey Immelt has spent his career riding the great wave of globalization. Now, he warns, the time of unbridled trade is over.
It’s not merely the rise of President Donald Trump, said Immelt, the long-time head of General Electric Co. A confluence of forces, both economic and political, have chipped away at the postwar order, presenting new challenges — and opportunities — for big business around the world.
Deep-red South Carolina has twice come out strongly for President Donald Trump, giving him a key win in last year’s Republican primary and delivering him a 14-point win in November over Hillary Clinton.
But some in the state, which relies heavily on foreign investment and free trade, already are questioning some of Mr. Trump’s early moves to withdraw from a Pacific Rim trade deal and erect new physical and economic barriers with Mexico.
“It means real trouble,” said Rep. Mark Sanford, a Republican and former governor who tentatively backed Mr. Trump’s campaign. “This is America stepping away from the table in a way that’s never been done since World War II.”
BMW AG Chief Executive Officer Harald Krueger defended the importance of free trade, responding to recent remarks by U.S. President Donald Trump suggesting he’ll push for tariffs to protect American jobs.
BMW’s U.S. factory in Spartanburg, South Carolina, is the German manufacturer’s largest worldwide. The plant produces BMW’s popular sport-utility vehicles for global markets and is currently being expanded to an annual capacity of about 450,000 vehicles. Krueger said BMW is the largest exporter on a net basis from the U.S., with goods worth $10 billion per year, and employs 70,000 people (including indirect positions) in the country.
“Free trade has only made this success story in the U.S. possible — 70 percent of the automobiles produced here are exported,” Krueger said.
It juts up from the vast arid plains of central Mexico, a hollow shell of steel beams that serves as a harbinger of the damage Donald Trump’s “America First” push could wreak on trade partners across the globe.
This was to be no ordinary auto plant. The Ford Motor Co. project, about four hours north of Mexico City, was hyped as the region of San Luis Potosi’s biggest private investment ever, a $1.6 billion facility that would have employed almost 3,000 people and added a half-percentage point to the state’s economic growth.
San Luis Potosi state still owes money on the land that it bought and donated to Ford. Now, it’s scrambling to regain control of the abandoned site and find a new tenant to pick up the pieces. That’ll be no easy feat as Trump floats the idea of a border tax of up to 20 percent and continues his Twitter attacks against American companies that ship jobs abroad. When Dearborn, Michigan-based Ford up and scrapped its project on Jan. 3, it became at least the second foreign company in Mexico to bow to the pressure.
“Ford was going to be the engine to make us grow faster,” said Gustavo Puente, head of the state’s economic development office. “The worst part has been the uncertainty about what Trump’s policies will do.”
A broad coalition of lobbyists for retailers like Wal-Mart Stores Inc., energy companies and the auto industry is launching a battle against a proposed U.S. tax on imports, aiming to sway both federal lawmakers and American consumers.
The Retail Industry Leaders Association and more than 120 other trade groups are backing the campaign, called “Americans for Affordable Products,” which will center on how a border-adjusted tax could increase prices for consumers. Part of the message: that export-focused companies may get their federal taxes drastically cut, maybe even to zero. Behind the scenes, the campaign will rely in part on lobbying by industry executives.
With an audience of more than 100 million tuning in Sunday, Super Bowl advertisers want their commercials to get attention — just not the wrong kind. That’s even more true in an era where everything from Skittles to avocados has been politicized.
None of the ads for this weekend’s game on Fox are expected to purposely press any political buttons, but advertisers want to avoid even accidentally offending anyone. That’s a tall order in a particularly tense moment in America, when CEOs are under pressure to take sides on major issues and the president routinely scolds companies on Twitter.
FOREX, CURRENCY IMPACTS
Major currencies are posting their largest swings in months, highlighting a growing difficulty for investors and traders to discern the likely path of Trump administration policy.
The U.S. currency rallied in the weeks following Donald Trump’s election Nov. 8, reflecting in part investor expectations that deregulatory, tax-reduction and stimulus plans will push up U.S. growth. But since the New Year, the dollar has declined and volatility has picked up, driven by statements by administration officials that have been interpreted by investors as advocating a lower dollar.
The remarks, from Mr. Trump and some important advisers, have surprised some investors and pushed many traders to take a more-defensive stance. Few analysts expect quick clarity on Washington policies that could settle the dollar’s path, likely meaning more unpredictable trading in the months ahead.
Currency traders have long been used to analyzing political risk — just not so much when it comes to the U.S. dollar.
The greenback has been rattled this week by political concerns, spurring debate over the long-term implications of Trump administration policies and their impact on demand for assets denominated in the world’s reserve currency. It’s a relatively unfamiliar dynamic for those accustomed to looking at bond-yield differentials when attempting to gauge the dollar’s outlook.
“I’m not sure serious analysis is possible, and I don’t trust my gut instincts on something as far from the usual state of affairs,” said Kit Juckes, a global strategist at Societe Generale SA in London and a veteran of more than three decades of market research. Juckes was referring, in a note Tuesday, to the dollar’s reaction to President Donald Trump’s selective travel ban.
REAL ESTATE, HOUSING, REITS, COMMERCIAL
Blackstone Group LP said it plans to spend $500 million to revamp Chicago’s Willis Tower as it tries to draw more tourists and office tenants to the country’s second-tallest building.
The makeover of the 110-story skyscraper will be the first major renovation in the tower’s 43-year history, according to a statement today by Blackstone. The investment is the largest the firm has made in one of its properties, real estate chief Jon Gray said in the statement.
HEDGE FUNDS, PRIVATE EQUITY, MONEY MGMT
Billionaire Ray Dalio’s Bridgewater Associates earned almost $5 billion for its clients last year while rivals George Soros and John Paulson lost money, according to a report by hedge-fund investor LCH Investments NV.
Spending, which is often determined by three- or five-year averages of investment returns, is coming under increasing pressure as endowments struggle to keep up with historical results. Boards of trustees and investment committees are re-calibrating expectations for performance, said Paul Dimitruk, chairman of Partners Capital, which handles investments for clients including endowments and foundations.
Computer-based hedge funds have been admitted to a list of the all-time top 20 best performers for the first time in a sign that the dominance of traditional human investing is being radically challenged by technology.
DE Shaw, Citadel and Two Sigma, which all incorporate so-called “systematic strategies” that trade using computer algorithms, joined the closely followed annual list compiled by LCH Investments, the fund of hedge funds run by the Edmond de Rothschild group.
The 20 best-performing hedge fund managers of all time index measures the total dollars made for investors since inception. DE Shaw, which manages $27bn in assets, entered the list in third spot, while Ken Griffin’s Citadel joined at number five. Two Sigma came in 20th place.
“This environment is undoubtedly better for active investing – just as active investing was considered to be on its deathbed,” Loeb wrote in a letter to clients of his $15 billion Third Point LLC Wednesday.
A shift from government monetary stimulus to measures that will increase personal and corporate spending will create lower correlations between various types of securities and greater dispersion of results within them, such as stocks, Loeb said.
The move marks the seventh time Soros has appointed a new chief investment officer since the billionaire philanthropist decided to scale back risk following the departures of star traders Stanley Druckenmiller and Nicholas Roditi in April 2000. Early last year, Burdick replaced Scott Bessent, who oversaw investments for four years before leaving at the end of 2015 to start his own hedge-fund firm. Since then, Soros has become more involved in day-to-day trading at his family office, taking a series of bearish bets. The firm returned about 5 percent in 2016, a person with knowledge of the matter said.
“Her expertise at allocating risk across a diverse set of strategies makes her a perfect fit for the Soros family office,” said Nicolas Roth, co-head of alternative assets at Geneva-based investment firm Reyl & Cie, which invests in hedge funds. “O’Connor is a recognized multi-strategy platform.”
USA ECONOMY DATA
Companies last month added the most workers to payrolls since June on pickups in services and manufacturing jobs, data from the ADP Research Institute in Roseland, New Jersey, showed Wednesday.
Manufacturing growth accelerated in January for a fifth consecutive month on stronger orders and production that signal America’s factories are rebounding.
The Institute for Supply Management’s index rose to 56, the highest since November 2014, from 54.5 the prior month, data from the Tempe, Arizona-based group showed Wednesday. The median forecast in a Bloomberg survey of economists called for 55. A reading above 50 signals expansion.
U.S. manufacturing activity rose to the highest level in more than two years in January amid rising demand and expectations for a friendlier business environment during the Trump administration.
Filings for unemployment benefits in the U.S. are estimated to have dropped to 250,000 for the week ended Jan. 28, marking the 100th consecutive period below 300,000, a threshold economists see as indicative of a healthy labor market. That’s the longest streak since a 161-week stretch that ended in 1970, with companies reluctant to fire employees as it becomes tougher to find experienced workers to replace them.
U.S. car and light truck sales slipped 1.8 percent in January as automakers pulled back on bulk sales to rental, government and business fleets and concentrated on more profitable retail sales to individual consumers.
GLOBAL ECONOMY DATA
The world’s working-age population is shrinking faster than expected, leaving fewer people to support a growing number of seniors, according to the Bloomberg Sunset Index.
Conventional measures of old-age dependency calculate the ratio of people ages 65 and older with those of working age: 15 to 64. But many people stop working well before 65: Men in 66 percent of the 178 countries Bloomberg evaluated and women in 78 percent can begin receiving retirement benefits earlier.
ENERGY COMPANIES, NOCs, INDUSTRY
Royal Dutch Shell PLC’s annual profit tumbled to the lowest level in more than a decade, reflecting a tough year for an industry hit hard by low oil prices.
Shell said Thursday its profit for 2016 on current cost-of-supplies basis—a measure similar to the net income that U.S. oil companies report—was $3.5 billion, down from $3.8 billion a year earlier. Profit for the fourth quarter fell to $1 billion from $1.8 billion a year earlier.
The recent bump in oil prices isn’t enough to help Petroleos de Venezuela SA as it faces its fourth consecutive year of declining production.
The company’s crude output is expected to fall this year as it failed to raise cash for investments and after Venezuela agreed to cut 95,000 barrels a day for six months as part of a deal struck by the Organization of Petroleum Exporting Countries and other non-members to lift oil prices, analysts say. Even the recent increase in oil prices, following the cuts, aren’t enough to ease the company’s financial burden, Lucas Aristizabal, a senior director at Fitch Ratings, said.
President Donald Trump’s energy policies are good for the petroleum industry and Saudi Arabia sees no problem with growth in U.S. oil production as long as it’s in line with demand, Saudi Energy Minister Khalid Al-Falih said.
“President Trump has policies which are good for the oil industries,” Al-Falih said in an interview with the BBC. “He has steered away from excessively anti-fossil-fuel, unrealistic fossil-fuel policies.”
ENERGY CRUDE OIL, OIL SANDS, SHALE
Crude purchases in one corner of the oil market by a Chinese trader are contributing to the shake-up of supply flows across the globe.
China National United Oil Co. last month bought at least 7 million barrels of Middle East crude for March loading as part of an assessment process operated by Platts used to set price benchmarks, data compiled by Bloomberg show. The spree was made at a time the region’s supply is shrinking as producers including Saudi Arabia shoulder a majority of global output curbs.
The purchases by the trader known as Chinaoil have helped raise the value of Middle East crude, which had already turned costlier relative to supplies from other regions on OPEC’s deal to cut production. The increase in the Dubai crude benchmark versus West Texas Intermediate and Europe’s Brent has spurred previously unviable flows of cargoes into Asia from areas such as the Gulf of Mexico and boosted shipments from West Africa and the North Sea.
U.S. crude exports are poised to surpass production in four OPEC nations in 2017 and may grow even more if President Donald Trump honors pledges to ease drilling restrictions and maximize output.
The world’s largest oil-consuming country could sell as much as 800,000 barrels a day of crude overseas this year, according to four analysts surveyed by Bloomberg. That’s more than OPEC producers Libya, Qatar, Ecuador and Gabon each pumped in December. The U.S. exported 527,000 barrels a day in the first 11 months of 2016, Energy Information Administration data show.
“Godzilla is even taller in person,” Vikas Dwivedi, senior analyst at Macquarie Capital (USA) Inc., said in a telephone interview from Houston. “U.S. production will be bigger than most people are expecting.”
The U.S. for the first time is pushing more crude and refined petroleum products into Latin America than it brings back, signaling a change in the global trade map that could be tested if President Donald Trump introduces border taxes.
The scales tipped in favor of the U.S. in October, when it recorded a surplus of 89,000 barrels a day of petroleum, the first gain for the U.S. since records began in 1993, according to the U.S. Energy Information Administration. In November, the surplus grew to 184,000 barrels a day, the EIA said Tuesday. That compares to a 4.3 million barrel deficit in 2005.
The change comes as Latin America, led by Mexico, is importing unusually large amounts of gasoline as aging refineries fail to keep up with soaring demand. At the same time, the region’s output of heavy crude, once a staple for U.S. refiners, is declining just as Canada’s production is on the rise.
ENERGY RENEWABLES, NUCLEAR
Saudi Arabia will award its first tender to build 700 megawatts of solar and wind energy in September, with the cost of power forecast to be the lowest in the world, Energy Minister Khalid Al-Falih said.
OPEC’s biggest oil producer plans to build 300 megawatts of solar plants in the al-Jouf area in northern Saudi Arabia and 400 megawatts of wind projects in nearby Tabuk, he said. Requests to qualify for bidding will be issued Feb. 20 and bids will be on April 17.
“The terms on renewable contracts will be motivating so that the cost of generating power from these renewable sources will be the lowest in the world,” Al-Falih said Wednesday at a press conference in Riyadh.
The renewable-energy industry has a message for the Trump administration about bringing energy jobs to rural communities: get out of the coal mines and look to the sky.
U.S. wind-farm developers and suppliers had more than 100,000 workers at the end of the year and the solar industry had more than double that, and they’re a significant source of employment in many of the rural red states that supported Donald Trump’s campaign. That compares to 65,971 coal mining jobs at the start of last year, according to the U.S. Energy Department.
Leaders of the solar and wind industries say the rural areas that missed out on economic growth under President Barack Obama are benefiting from the expansion of clean energy. And that growth isn’t driving the collapse of coal mining, according to Abigail Hopper, the recently hired chief executive officer of the Solar Energy Industries Association.
“I reject the idea that there has to be a winner and a loser,” Hopper said in an interview Tuesday at the trade group’s Washington headquarters. “These are good paying, local jobs that the solar industry is creating everywhere.”
COMMODITIES BASE METALS, MATERIALS
Australia’s trade performance closely correlates with demand from China’s old growth drivers like infrastructure and apartment construction. The government in Beijing’s stimulus program, together with cutbacks in coal output, has helped underpin a surge in coal and iron ore prices that’s now reflected in Australia’s sharply improved trade balance. However, the impact of a fall in coal prices since November remains to be seen.
COMMODITIES AGRICULTURE & SOFTS
Demand for bacon depleted frozen pork-belly supplies in the U.S. to a record low for December, but the pork industry is taking steps to avoid any serious shortages.
The U.S. Department of Agriculture reported last week that pork bellies in cold storage fell to 17.7 million pounds last month, the lowest December inventory since records began in 1957. In comparison, more than 52.3 million pounds of pork bellies—the cut of the hog from which bacon is derived—remained in storage in December 2015.
Despite alarming headlines, and people taking advantage of any excuse to share bacon pictures, there’s no reason to panic. The frozen reserves are just that — reserves. There will be no rationing at breakfast, or for your burgers (or B.L.T.s, or quiche, or roasted bacon-wrapped rabbit, or apples and ice cream. Not even for your bacon footballs this weekend).
“To imply that there’s going to be some shortage of bacon is wrong,” said Steve Meyer, the vice president of pork analysis for EMI Analytics, in an interview as the bacon reports spread. “There’s plenty of hogs coming. There’s going to be plenty of bacon.”
POLLUTION, CLIMATE & ENVIRONMENT
Roughly 100,000 people in Pittsburgh were unable to drink their tap water Wednesday without boiling it first because of concerns the city’s water authority failed to adequately disinfect part of its system.
Just like protesters who have taken to the streets and airports — for the Women’s March and against the travel ban — scientists are planning their own march.
Governments in Southeast Asia are ramping up spending just as central banks are putting away their policy-easing tools.
From Thailand to Malaysia, states are boosting budgets for railways, roads and other infrastructure projects to help bolster growth in a region facing uncertain global markets and the threat of a pullback in trade under U.S. President Donald Trump.
“Fiscal is going to be the main story this year,” said Selena Ling, an economist at Oversea-Chinese Banking Corp. in Singapore. “All of these countries don’t really have much room for cutting rates further. Their currencies may weaken more if rates are lower.”
India is planning to create a state-owned oil giant through mergers to match the might of international companies and billionaire Mukesh Ambani’s Reliance Industries Ltd.
“We see opportunities to strengthen our central public-sector enterprises through consolidation, mergers and acquisitions,” Finance Minister Arun Jaitley said in Parliament while presenting the federal budget for the year beginning April 1. “It will give them the capacity to bear high risk, avail economies of scale, take higher investment decision and create more value for stakeholders.”
Businesses that prey on the vulnerable and desperate by charging exorbitant interest have sidestepped authorities’ crackdown on risky practices, an approach that’s throttled credit and winnowed the ranks of banks. In contrast, Russia’s payday lenders posted 65 percent growth in 2016 and have more than tripled the volume of outstanding loans over the last two years.
That may be about to change. Patriarch Kirill, the spiritual leader of 150 million Russian Orthodox worldwide who’s also closely allied with President Vladimir Putin, condemned the microfinance organizations last week. Labeling them “bloodsuckers” and amoral predators, he called for Russia to create banks that will cater to the poor.
CANADA, AUSTRALIA, NEW ZEALAND
If Trump and Congressional Republicans get everything they want — tax cuts, infrastructure spending, and a border-adjustment tax — what happens to Canada?
According to Deutsche Bank AG macro strategist Sebastien Galy, this trifecta of policies would force the Bank of Canada to cut rates and warn that quantitative easing might be needed to support the economy. The negative effect on exporters and competitiveness will likely dwarf any benefits stemming from the boost to U.S. aggregate demand.
Canada’s economy may be returning to health after an oil shock, but keeping up that momentum could hinge on whether manufacturers show more resilience.
The problem is that manufacturing output has gone sideways for more than two years and is a smaller part of the economy, making it harder to drive future growth. Manufacturing, like the country’s battered energy industry, may not be ready deliver a huge jolt of momentum.
BREXIT, LONDON, UK ECONOMY
Smaller manufacturers are warning of increasing price pressures as the collapse in the pound since Britain voted to leave the European Union drives up the cost of raw materials.
Costs built at the quickest pace since 2011 in the three months through January, prompting factories to raise their expectations for output-price inflation to the highest level in more than two decades, the Confederation of British Industry said in a report published Thursday.
Germany’s financial regulator offered to allow most banks that move operations there because of Brexit to keep current models for setting capital requirements for as long as two years, people with knowledge of the matter said.
U.K. Prime Minister Theresa May faces a battle with pro-European lawmakers in her Conservative Party after they grudgingly backed her plan to trigger Brexit negotiations by the end of March in its first test in Parliament.
The House of Commons on Wednesday approved by 498 votes to 114 to allow May to start divorce talks with the European Union. But with more parliamentary hurdles ahead, lawmakers warned their backing shouldn’t be mistaken for unconditional support to negotiate Brexit freely.
With Donald Trump stepping up criticism of Germany’s colossal trade surplus, the country’s business leaders say there’s a problem with the new president’s “America First” policy: U.S. consumers and workers are the likely losers from many of his proposed restrictions.
Chief executive officers from BMW AG, Deutsche Lufthansa AG, and Siemens AG all emphasized the perils of protectionism in comments Wednesday, after a top Trump administration official criticized German trade policies. In an interview with the Financial Times, Peter Navarro, the head of the White House National Trade Council, called Germany’s surplus a sign of a “grossly undervalued” currency.
France’s election is making Europe’s markets nervous.
Traders, already wearied from the 2016 gyrations that followed Brexit, Donald Trump’s victory and Italy’s referendum, are pricing in a surge in volatility for April, when the first round of French voting will occur. The scandal threatening to unhinge Republican candidate Francois Fillon’s run for the presidency has raised concerns that Marine Le Pen, the populist who wants to withdraw France from the euro, may have less of a long shot at winning.
Just as Angela Merkel gears up to campaign against populist foes, Germany’s Social Democrats are opening a different front against her re-election bid.
Within a week of nominating Martin Schulz as its lead candidate in the Sept. 24 national vote, the political outsider has given the country’s second-biggest party a clear bump in the polls. That’s shifting the race’s momentum after a year dominated by the surge of the smaller, anti-immigration Alternative for Germany in the wake of Europe’s refugee crisis.
Investors are dumping Greek bonds, fearing that Athens will be unable to pay debt that comes due this summer.
The selloff comes as the Greek government is again at a standstill in negotiations with its creditors in the eurozone and at the International Monetary Fund. Athens needs to break the deadlock and secure more aid before about €6 billion ($6.5 billion) in debt has to be repaid in July.
Complicating matters is a scheduled IMF board meeting next week and a lack of clarity over what position the U.S.—which has the largest vote at the fund—would take under the Trump administration.
Support for Germany’s Social Democrats jumped to the highest level in almost four years in a poll that underscores the party’s revival after it picked Martin Schulz as Chancellor Angela Merkel’s election challenger.
Conservative leaders are trying to steady the campaign of François Fillon, once the clear front-runner to become France’s next president, as he faces a deepening criminal investigation.
War crimes, attacks on media freedom in former communist states and prejudice against Europe’s Muslims. Now mortgages in Ireland have made it onto the ignominious list for George Soros’s campaigners.
The billionaire investor’s Open Society Foundations is opening a new front in the fight against evictions as the legacy of one of the worst real-estate market crashes in history continues to haunt Ireland. About one in 10 Irish mortgages is in arrears, or 4.5 billion euros ($4.9 billion) of missed payments, and foreclosures tripled over the last five years.
“Essentially, we are aiming to apply a human rights approach in repossession cases,” said Marguerite Angelari, senior attorney at Soros’s organization. “It looks pretty easy to get a repossession order in Ireland. Based on European Union law, it shouldn’t be.”
Chinese labour unrest extended its footprint last year as workforce tensions that have long beset the manufacturing and construction industries began to hit the fast-growing sectors on which Beijing has pinned its hopes for future growth.
While the 2,663 strikes and protests recorded in 2016 by China Labour Bulletin marked a fall of 112 on the previous year, the total was still almost double that of 2014, with the spread to new sectors partly offsetting a drop in manufacturing unrest.
“The new economy is rife with the old labour problems of the past,” said Keegan Elmer, a researcher at the Hong Kong-based workers’ rights organisation.
Until now, Hong Kong has been regarded as a haven from arbitrary police and judicial action, but global companies will have to reconsider this in the wake of Mr Xiao’s disappearance. In mainland China itself, his abduction will send a chilling message to the super-wealthy, who already believe Mr Xi has launched a war against them. It will also accelerate the pace of capital flight.
Chinese property developers investing in new ventures outside their core business are hurting their bonds. Purchases by highly leveraged Chinese developers unrelated to real estate raise the “knee-jerk question” of whether they might be having problems with their existing business, said Bryan Collins, a fixed-income portfolio manager at Fidelity International in Hong Kong.
The disclosure that Mr. Trump uses a prostate-related drug to maintain growth of his scalp hair, which has not been publicly known, appears to solve a riddle of why Mr. Trump has a very low level of prostate specific antigen, or PSA, a marker for prostate cancer. Mr. Trump takes a small dose of the drug, finasteride, which lowers PSA levels. Finasteride is marketed as Propecia to treat male-pattern baldness.
Dr. Bornstein said he also took finasteride and credited it for helping maintain his own shoulder-length hair and Mr. Trump’s hair. “He has all his hair,” Dr. Bornstein said. “I have all my hair.”
The decision is the first court judgment against a company owned by Mr. Trump since he became president last month.
First Lady Melania Trump, who planned to move to the White House in mid-2017, may stay in NYC, a source reveals in the new issue of Us Weekly.
President Donald Trump’s campaign finished last year with $16.1 million in the bank after pulling in a record $6.5 million after he’d already won, Federal Election Commission filings show.
Trump is still actively soliciting donations via the campaign’s website and targeted text messages during a time when most new administrations pause fundraising and shift to governing. In the final 33 days of the year, Trump’s campaign hawked Christmas ornaments emblazoned with his campaign slogan, as well as other merchandise commemorating his December thank-you tour and January inauguration.
Less than 48 hours before Neil Gorsuch was introduced as President Donald Trump’s Supreme Court nominee, he was traveling in secret down Colorado back roads to a military aircraft as part of a White House operation to keep his selection under wraps.
Rex Tillerson, the former Exxon Mobil Corp. chief, won Senate confirmation as secretary of state after lawmakers split mostly along party lines on U.S. President Donald Trump’s choice of an oilman with no government experience but a career negotiating billions of dollars of energy deals worldwide.
Mr. Scaramucci will not become the president’s liaison to the business community after the sale of his investment firm to a Chinese conglomerate raised questions.
The battle over Supreme Court nominee Neil Gorsuch began in earnest, with President Trump saying Senate Republicans should change rules requiring 60 votes should there be Democratic opposition.
Since his surprise victory, the president and Republican leaders in both chambers have described a tax overhaul as a top priority — a once-in-a-generation opportunity for meaningful change. Here’s a closer look at four of the hurdles they’ll have to overcome: Trump’s controversies; issues with the border tax; deduction and disputes; and opposition from Democrats.
The repair language was discussed by Republicans during their closed-door policy retreat in Philadelphia last week as a better way to brand their strategy. Some of that discussion flowed from views that Republicans may not be headed toward a total replacement, said one conservative House lawmaker who didn’t want to be identified.
DEMOGRAPHICS, INEQUALITY & POPULISM
When the Affordable Care Act passed Congress in 2010, more Americans disliked it than liked it. And that was the pattern in public opinion for the next six years.
But since Donald J. Trump, who promised to repeal the law, was elected president, that long-held pattern has begun to shift. In a variety of recent polls, with questions asked in different ways, more Americans are now saying they favor Obamacare than oppose it.
The NBC News/Wall Street Journal poll has been tracking views of the health law since 2009. Its poll in January indicated for the first time that more people viewed the health law as a good idea than as a bad one.
Uninsured rates in low-income families have fallen under the Affordable Care Act, yet more than a third of Americans continued to face difficulties paying their medical bills in 2016, a survey found.
Adults in poor families were among the greatest beneficiaries of the ACA, with uninsured rates falling as much as 17 percentage points since it became law in 2010, according to a study from the Commonwealth Fund, a private, New York-based research organization. Still, 34 percent of Americans said it’s difficult or impossible to find affordable health coverage.
In the Conference Board’s monthly consumer confidence gauge, Americans 55 and older have seen the biggest rise in optimism since the November election of President Donald Trump.
“Confidence continues to trend higher across age groups; post-election, most of the major gains have come from older Americans, though younger folks are also feeling broadly more confident through January,” Bespoke Investment Group said in a note.
Part of the reason for this could come from the fact that older Americans were more likely to have voted for Trump in the first place. Regardless, other surveys of investor confidence have also been shifting post-election. According to both UBS Group AG and Charles Schwab Corp., sentiment among their customers has improved since November.
“Investors cited Trump’s pro-business policies — including lower personal and corporate taxes – expectations for less regulation and increased infrastructure spending, which they believe will spur U.S. economic growth, as the primary sources of their optimism,” UBS said in a note.
SCANDALS, LAWSUITS, FINES, REGULATORY
The virtual reality headset maker that Facebook Inc. bought in 2014 for $2 billion used stolen computer code, a jury said in awarding $500 million to ZeniMax Media Inc.
The case was over the Oculus Rift, the device that has put the social media giant at the forefront of the virtual reality boom.
Wednesday’s verdict in Dallas federal court is a rebuke to Facebook Chief Executive Officer Mark Zuckerberg, who isn’t a defendant but who told jurors in his first-ever courtroom testimony that it was important for him to be there because the claims by ZeniMax were “false.” An Oculus spokeswoman said the company will appeal.
BANKS, BROKERS, INSURANCE, XCHANGES
Deutsche Bank AG fell the most in four months after earnings missed analysts’ estimates, in part because clients stepped back from doing business with the lender amid concern about its financial strength.
The stock slumped as much as 7.1 percent, the most since September, after revenue from debt trading, its biggest source of income, fell short of estimates and equity trading revenue unexpectedly declined.
The ranks of investment bank research analysts have fallen by one-tenth since 2012, as tighter regulation and falling profits have forced financial institutions to cull their brigades of economists, bond strategists and stock pickers.
The number of analysts working at the world’s 12 biggest investment banks fell to 5,981 last year, according to fresh numbers from Coalition, a data provider on the industry. That is down from 6,282 at the end of 2015, and 6,634 at the end of 2012, when Coalition began to collect the numbers.
The cuts are expected to deepen in the coming years. “We will have massive cost pressures in an industry that is not ready for it at all,” said Matthew Benkendorf, chief investment officer at Vontobel Asset Management. “They’ll have to gut things pretty hard.”
SILICON VALLEY, UNICORNS, STARTUPS, VC
The building, which opened in 2008 and was touted as the most luxurious tower in San Francisco, became a beacon of the city’s burgeoning wealth, attracting tech millionaires, venture capitalists, and even the San Francisco 49ers retired quarterback Joe Montana.
The 58-story tower’s shine faded on May 10, 2016, when Agabian attended a homeowners association meeting and was informed that the building had sunk 16 inches into the earth and tilted over 15 inches at its tip and 2 inches at the base, according to suits filed by residents and the city of San Francisco. “You can imagine how distressed we were to know that, for one, our lifetime investment and savings are at risk,” she said. “And we have no idea whether or not there’s a fix to it, and if there is a fix to it, what it will entail.”
The building, meanwhile, continues to sink.
The difference between the tech industry and other sectors, dealers said, was that—while billionaire tech chief executive officers have begun to buy art along with the houses, planes, cars, and other objects that cement their status as members of the global rich—there has been little to no emulation from the lower, merely wealthy ranks.
Buell, the adviser, speculates that the rising ranks of tech managers will eventually get around to buying art, but “I think it’s going to take a little bit more time, I’ll be totally honest,” she said. “People in the art world are like ‘hurry up and spend money,’ but many of these guys are working their tails off,” she continued. “They’re just having their children and buying their first houses. I think the trickle-down will happen, but further down the line.”
Uber Technologies Inc. is offering its drivers an average of about a dollar apiece to dispose of alleged labor code violations that their own lawyer said might be worth billions.
The ride-hailing company asked a state judge in Los Angeles Wednesday to approve a $7.75 million settlement to resolve claims stemming from the company’s refusal to give California drivers the protections and benefits of employees. The accord doesn’t require Uber to stop classifying the drivers as independent contractors.
CONSUMER TECH, SOCIAL MEDIA, E-COMMERCE, MOBILE
While online identity previously emphasized everything anyone has ever done, with Snapchat “my identity is who I am right now,” Mr. Spiegel said in a 2015 video to describe the app.
Mr. Spiegel, 26, Snap’s chief executive, has since built a budding digital empire based on that initial unconventional insight — and has continued upending the tech industry with his different way of seeing the world, often with a touch of ego. Rather than accept the norms of the social networking ecosystem, he has stuck to atypical viewpoints on matters from mobile video to video-recording spectacles. And he has done all of this more than 350 miles away from Silicon Valley, in the sunny climes of Venice, Calif., where Snapchat is based.
“If you want to understand Snap, look at Evan Spiegel,” said Todd Chaffee, a partner at IVP, one of Snap’s three largest venture capital investors. “He is the visionary who drives that company.”
Facebook recorded a 51% jump in fourth-quarter revenue, reflecting the still-vibrant mobile advertising business that has driven the social-media giant’s growth over the last four years.
Facebook Inc.’s fourth-quarter revenue climbed more than forecast, driven by advertisers’ continued push to reach consumers on mobile phones.
CLOUD, SILICON, ENTERPRISE / SAAS
RETAIL APPAREL, SPECIALTY, DINING, BIG BOX
Apple Inc. is more than doubling the size of its renowned store on Manhattan’s Fifth Avenue, bringing a boost to a retail corridor that’s suffered from Trump Tower congestion and persistently high vacancies in the past year.
The technology giant will expand the store — known for its distinctive glass cube — to 77,000 square feet (7,150 square meters) from about 32,000 square feet, Douglas Linde, president of Boston Properties Inc., said on the company’s earnings conference call Wednesday. The Boston-based landlord is co-owner of the General Motors Building at 767 Fifth Ave., which houses the Apple location.
Under Amour — which has doubled its sales about every three years — is now having a hard time maintaining that rapid growth. While the company helped make moisture-wicking clothing a staple of gym-goers’ wardrobes, the increased popularity of athletic wear as everyday apparel has brought a raft of new competitors. The growth concerns caused Under Armour’s shares to slip 30 percent last year, and the stock is the most shorted in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
MEDIA, CABLE, SPORTS, ENTERTAINMENT
Sony Corp on Thursday said it does not plan to sell its pictures business after suffering a $1 billion writedown, and instead aims to turn it around by adding sales channels and making more use of movie characters.
“We believe in long-term upside potential for pictures,” Chief Financial Officer Kenichiro Yoshida said at an earnings briefing, reiterating that Sony continues to regard the business as important to the group.
AUTOS, ELECTRIC, SELF-DRIVING
Daimler AG’s Mercedes-Benz jumped out to an early lead in the race for U.S. luxury auto sales supremacy, posting a record January after winning the crown last year for the first time since 2013.
Tesla Inc. started testing four self-driving cars on California’s public roads late last year, a milestone for Chief Executive Officer Elon Musk who has promised to demonstrate an autonomous road trip from Los Angeles to New York by the end of 2017.
Elon Musk’s Tesla Motors Inc. said in a regulatory filing today that its new name is Tesla Inc. The decision to drop the word “Motors” was made to reflect the fact that Tesla, which merged with SolarCity Corp., another Musk company, is now in the solar business as well.
AIRLINES, SHIPPERS, RAIL, TRANSPORTS
Amazon.com Inc. is building a new air hub near Cincinnati to support a growing fleet of planes that can move inventory around the U.S. so online shoppers get their orders quickly.
Amazon will invest $1.49 billion to build the facility on 900 acres at Cincinnati/Northern Kentucky International Airport, said Mindy Kershner, an airport spokeswoman. The airport is located in Hebron, Kentucky, and is southwest of Cincinnati.
The e-commerce giant has 11 warehouses in Kentucky where inventory is stored, packed and shipped to customers ordering goods over the internet. The air hub will support the 16 planes transporting Amazon inventory around the country. Amazon last year signed agreements with two carriers to lease as many as 40 cargo planes to support its new Prime Air operation.
HEALTHCARE, PHARMA, BIOTECH
Drug-resistant malaria superbugs threaten a global public health disaster unless urgent action is taken to fight their spread in Southeast Asia, authors of new research have warned.
The mosquito-borne uber-parasites have taken hold in parts of Thailand, Laos and Cambodia and could sweep into India and on to Africa where most malaria deaths occur, their results suggest.
The conclusions will deepen concerns that growing resistance to the main artemisinin class of antimalarial drugs might reverse international success in almost halving estimated death rates from the disease over the past 15 years.
Sir Nicholas White, co-author of the research published on Thursday in The Lancet Infectious Diseases, warned that the last wave of drug-resistant malaria parasites to spread from Asia to Africa “killed millions”.
Obamacare looks like it’s going away. Until that happens, big health insurers aren’t sure what to do with it.
Republicans and President Donald Trump haven’t given details on how they’ll repeal and replace the Affordable Care Act. Uncertainty about the law, which covers millions of Americans, has left companies trying to figure out if they’re better off stuck in limbo or just quitting entirely.
SCIENCE, NATURE, PSYCHOLOGY
Our brains are wired to “voraciously feed on information,” says University of California, San Francisco neuroscientist Adam Gazzaley, co-author of the 2016 book “The Distracted Mind.” So why let social media companies decide when they should tempt you? Turn off app notifications on your phone and computer, particularly ones for live video broadcasts, whose see-it-while-you-can alerts are designed to engender a fear of missing out.
To further stem the temptations, try what I call the digital Paleo Diet: Do serious work only on tech that was available before the year 2000. Make your main work devices completely off-limits to social media so distractions aren’t even possible. Don’t log into Facebook or even install the app. (For extra help, try the News Feed Eradicator for Facebook browser plugin.)
Hide your phone when you’re working, driving or doing important socializing. Studies have shown even the presence of a phone, on silent, can cause poor academic performance or less-meaningful face-to-face interaction.
Gaga’s halftime extravaganza represents the latest achievement of Mr. Lawrence’s nearly five-decade career. The 71-year-old coach began training Gaga 17 years ago, when she was a 13-year-old student on Manhattan’s Upper West Side named Stefani Joanne Angelina Germanotta. Mr. Lawrence’s nephew heard her singing in a clothing boutique he ran and recommended her to Don. During their first lesson, in Mr. Lawrence’s studio near 72nd Street and Broadway in Manhattan, Gaga’s mother sat outside in a waiting room. “Within three months, I knew this girl was going to be it,” Mr. Lawrence says.
Mr. Lawrence uses a classical technique associated with opera singers and has attracted an avid following among rock and pop’s top talent. His clients have included Mick Jagger, Axl Rose, Bono, Courtney Love and Christina Aguilera, among many others.
While the NFL is backing Quanterix, a test for the living could present an existential crisis for the league. Discovering, for instance, that half its linemen show signs of CTE could starve the league of talent or force changes that make it unrecognizable to fans. And football isn’t alone: CTE presents similarly dire questions for hockey, soccer, and ultimate fighting, among other contact sports.
“The NFL may not realize they have awakened an animal here,” Hrusovsky says. “If they want it, they should invest like crazy in it. If they don’t really want it, holy moly, what have they created? Because I am not going to go away.”