Five Things You Need to Know to Start Your Day
Want to receive this post in your inbox every morning? Sign up here
The latest country to meet with North Korea may be, of all places, Japan, while tech stocks once again weigh on U.S. equity gauges. Here are some of the things people in markets are talking about.
North Korea and… Japan?
Kim Jong Un’s administration is seeking diplomatic talks with Japan, Asahi reports, citing unidentified people familiar with the matter. The meetings may take place in Pyongyang after the summit with the U.S. The yen fell to the lowest level in two weeks versus the dollar. Of course, a fiscal year-end squeeze may be affecting the pair as well.
Technology stocks remained front and center during the U.S. session. Amazon.com came into focus, stealing the limelight from Facebook after Axios reported that U.S. President Donald Trump is “obsessed” with regulating the e-commerce behemoth. The S&P 500 fell, but is still hanging just above its 200-day moving average, a significant technical level. Stocks in the U.S. have been struggling to hold gains toward the end of the session lately. The Cboe's VIX index remained below 25, but not by much. The U.S. dollar rose, while 10-year Treasury yields were in the 2.78% area.
Indonesia’s New Central Bank Chief
Indonesia’s new central bank governor knows a thing or two about crisis management. That’s about to come in handy. In October last year, Perry Warjiyo sensed a new calamity around the corner, warning that the tightening of U.S. monetary policy meant trouble ahead for Southeast Asia’s largest economy. Fast forward five months and the rupiah has tanked against the dollar, foreign investors are ditching Indonesian stocks and bonds, and the central bank was last month forced to tap $4 billion of foreign reserves to defend the currency. He’ll take the reins at Indonesia’s central bank in May as the economy struggles for traction even after eight rate cuts, and as a trade war further threatens its nascent recovery.
Upward U.S. GDP Revision
The U.S. economy grew in the fourth quarter at a faster pace than last estimated, helped by an upward revision to household spending on services and a smaller drag from inventories, according to Commerce Department data released Wednesday. The report also included the first look at the health of corporate America toward the end of 2017. The gain in fourth- quarter profits from a year earlier, together with lower corporate taxes following the tax overhaul signed by President Donald Trump late last year, bodes well for business investment and employment. Separately, China’s economic outlook remains robust, according to the earliest indicators for March, and economists have run some numbers of Trump's China threats.
Traders face a tricky Thursday. Volatility remains elevated as markets swing up and down with abandon. The MSCI All-World Index of global stocks is poised to snap a seven-quarter winning streak -- its longest such stretch of gains since 1997 -- while global bonds are set for their first decline in currency neutral terms since 2016. There will be a smattering of data to take note of, including Japanese retail trade, Australian private sector credit and Vietnamese GDP. Chinese earnings season rolls on with Bank of China and CNOOC among the major releases of interest. Some 63% of the region's bourses, by market cap, will be open Friday when the overwhelming majority of the world's equity desks will be shut. China, Japan, South Korea and Taiwan will stand alone as the only four $1 trillion+ stock markets trading on the final day of the week.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Trump ousts Veterans Affairs Secretary David Shulkin.
- Crypto's billionaire trading king has run into problems.
- A lot is going on at the New York auto show.
- Should Australia just relax about Chinese cash?
- What the new owners of Air India will get.
- A man spent $100 million building a resort in Fiji.
- Uber and Tesla crashes elicit warnings about cutting corners.
- Reddit disables Bitcoin payments.
— With assistance by Garfield Clinton Reynolds, Sho Chandra, Stephanie Hoi-Nga Wong, Karlis Salna, and Tassia Sipahutar