Financial Markets and Economy
Dollar on defensive, Asia stocks subdued amid U.S. trade unease (Reuters)
The dollar was under pressure in Asia on Tuesday as U.S. President Donald Trump's focus on trade protectionism fuelled suspicions his administration might seek a competitive advantage through a weaker currency.
The head of the biggest exchange group in the world on Trump, China, and handling $1 quadrillion in trading (Business Insider)
Terrence "Terry" Duffy is a popular man.
Upon visiting the CME Group office in New York on January 11 to speak with Duffy, chairman and CEO at the $40 billion exchange group, I had a security guard scope me out. He joked he wasn't going to let me hurt "my Terry."
Central Banks Embrace Risk in Era of Low Rates (The Wall Street Journal)
By keeping interest rates low and in some cases negative, central banks have prompted some of the most conservative investors to join the hunt for higher returns: Other central banks.
Bitcoin is little changed at $924 a coin as of 7:26 a.m. ET.
Monday's flat session comes despite some big news out of China. According to Reuters, the country's three largest bitcoin exchanges announced plans to begin charging a flat fee of 0.2% for each transaction.
SEC Probes Whether Companies Are Misusing Adjusted Earnings Metrics (The Wall Street Journal)
The Securities and Exchange Commission’s enforcement division has informed some companies in recent weeks that it is examining their use of adjusted earnings measures, according to people familiar with the matter.
OPEC Shrugs Off Threat of U.S. Cutting Oil Imports (Bloomberg)
OPEC’s two biggest suppliers to the U.S. shrugged off a vow by President Donald Trump to end dependence on the group’s oil, saying the world’s biggest economy would continue to need crude from abroad.
The Trump effect has rallied US markets – but it's based on illusion (The Guardian)
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
Jump of 930% Baffles Danish Property Firm With Near-Zero Equity (Bloomberg)
A small Danish property company started 2017 as the biggest winner on the Copenhagen stock market, surging as much as 930 percent since the end of last year. But there’s a problem: Management has no idea why and is trying to talk sense to investors.
Pain Is Coming for Emerging Market Bond (Bloomberg)
Forget trade wars, protectionism and all the tough talk coming from the Twitter account of President Donald Trump. It hasn't been this safe to own emerging market bonds for a couple of years. Or has it?
Which Economies Will Grow And Which Ones Will Fail Over Next Three Years (Forbes)
The World Bank released its mammoth 276 page report on the global economy for the next three years. The takeaway: global trade flows will improve, and U.S. stimulus under Donald Trump will help a number of emerging markets that benefit from a strong U.S. consumer and dollar inflows.
These Companies Are at Risk in a U.S.-China Trade War (Bloomberg)
With the arrival of China-bashing Donald Trump as president in the White House, analysts are drawing up shortlists of winners and losers from any eruption of tensions between the world’s top two economies.
HALLIBURTON: We are seeing weakness everywhere but in North America (Reuters)
Halliburton Co, the world's No. 2 oilfield services provider, on Monday warned of weakness in markets outside of North America, echoing comments made by larger rival Schlumberger last week.
President Donald Trump has signed an executive order regarding his intent to pull the United States out of the Trans-Pacific Partnership trade deal.
How Donald Trump could take America out of NAFTA (The Economist)
DONALD TRUMP has consistently slammed the North American Free-Trade Agreement (NAFTA). He has called it “the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country”. He blames it for the loss of America’s carmaking jobs, a quarter of which have vanished since 1994.
Hedge Funds Risk Treasuries Wipeout After Bearish Bets Soar (Bloomberg)
The “fast money,” made up of hedge funds and other speculators, upped its bearish bets like never before this month, based on futures data for five-year notes. At the same time, “real-money” accounts, composed of institutional buyers like mutual funds and insurers, did the opposite and built up their bullish positions in much the same way.
Putin Awaits Call to President Trump as Russia Sees Shared Goals (Bloomberg)
The Kremlin said it hopes to arrange the first official phone call between President Vladimir Putin and U.S. President Donald Trump very soon, as Russia emphasized how much it has in common with the new administration.
Morgan Stanley Said to Seek Fees From ETF Issuers to Carry Funds (Bloomberg)
The firm has told some fund issuers to pay a fee or risk having future offerings blocked from its sales network, people familiar with the matter said. The plan, which charges ETF firms for transaction data, drew initial resistance from some large fund providers, including BlackRock Inc., and the firm lowered fees in response, said the people, who declined to be named because the information is private.
Foreigners Are Dumping U.S Debt At A Record Pace And Our $20 Trillion National Debt Is Poised To Become A Major Crisis (Michael Snyder, Blacklisted News)
While most of the country has been focused on the inauguration of Donald Trump, a very real crisis has been brewing behind the scenes. Foreigners are dumping U.S. debt at a faster rate than we have ever seen before, and U.S. Treasury yields have been rising.
Trump reportedly expected to sign an executive order on NAFTA (Business Insider)
President Donald Trump is "expected to sign an executive order as early as Monday to renegotiate" the North American Free Trade Agreement with Canada and Mexico, NBC News' Kristen Welker reports, citing a White House official.
Trump Warns "We Are Going To Be Imposing A Very Major Border Tax", Will "Cut Regulations By 75%" (Zero Hedge)
One look at the Dollar Index in the last week and it's clear just how 'variable' President Trump's position has been on trade and so-called 'border adjustments'. In the space of a few days, he has swung from being against a border adjustment, to possibly being for it, and now today confirming that "we are going to impose a major border tax." Yen, Peso, and Loonie are all sliding further on the headline.
RBC On The Treasury Standoff: "Someone Is Going To Get Hurt Badly" (Zero Hedge)
Following up on his note from yesterday in which he discussed the unwind of the Trumpflation trade and the beginning of the "pain trade", and having received feedback from clients following yesterday's sudden reversal in the US Dollar (which is fading fast following the latest hawkish comments from Janet Yellen), RBC's Charlie McElligott writes that the general tone is "downplaying fear of a larger VaR-episode (see: last Jan / Feb in the market neutral community via an excruciating factor rotation) developing at this point beyond the “now regularly scheduled” January mean-reversion, largely due to the remarkably-tight range now built-into US rates (as they ping between 2.30 and 2.40 for 10s and 2.90 to 3.00 for 30s).
For The First Time Ever Russia Beats Saudi Arabia As China's Top Oil Supplier (Zero Hedge)
While OPEC members were infighting over crude production and export quotas, posturing with temporary production cuts (just so the Saudis could get a six month reprieve during which it clears out a massive internal crude glut), Russia was busy capturing market share, and according to overnight Chinese data, Russia overtook Saudi Arabia as China’s top oil supplier last year for the first time ever boosted by robust demand from independent Chinese "teapot" refineries.
Companies
McDonald's U.S. restaurant sales fall after five quarters of gains (Reuters)
McDonald's Corp's (MCD.N) sales at established U.S. restaurants fell for the first time in six quarters as the novelty of all-day brea
A Rising Tide of Used Cars Threatens Ford’s Profits (Bloomberg)
A glut of used vehicles has started to depress prices. That trend will intensify as Americans will return 3.36 million leased cars and trucks this year, another jump after a 33 percent surge in 2016, according to J.D. Power.
Uber (Uber Technologies)
Uber is a ridesharing app for fast, reliable rides in minutes—day or night. There’s no need to park or wait for a taxi or bus. With Uber, you just tap to request a ride, and it’s easy to pay with credit or cash in select cities.
Technology
Samsung says batteries caused Note 7 fires, may delay new phone launch (Reuters)
Samsung Electronics Co Ltd indicated on Monday that its latest flagship Galaxy S smartphone could be delayed as it pledged to enhance product safety following an investigation into the cause of fires in its premium Note 7 devices.
Super-fast camera records light-based 'sonic booms' (Engadget)
Scientists have suspected that light can create its own conical wakes, like a sonic boom, but how do you capture something that happens so quickly? With a very fast camera, naturally.
Politics
President Donald Trump Makes Revised Trade Deals an Early Priority (Politics)
President Donald Trump is taking immediate steps to reorder U.S. economic alliances in his first days in office, setting up meetings with leaders from Mexico and Canada on North American affairs and hosting U.K. Prime Minister Theresa May this Friday to lay the groundwork for a trade pact with London.
Trump Mocks Protesters Before Affirming Right to Demonstrate (Bloomberg)
President Donald Trump mocked protesters who gathered for large demonstrations across the U.S. and the world on Saturday to signal discontent with his leadership, but later offered a more conciliatory tone, saying he recognized such marches as a “hallmark of our democracy.”
Trump’s Foreign Dealings Violate Constitution, Suit Claims (Bloomberg)
A government watchdog group sued President Donald Trump in federal court Monday, alleging that his business dealings violate the U.S. Constitution’s ban on federal officials’ receiving payments from foreign governments.
States Send Trump Lists for Promised Roads-and-Bridges Plan (Bloomberg)
With President Donald Trump promising to rebuild crumbling U.S. highways, bridges and buildings, states have begun submitting lists of priority projects in need of funding.
Elon Musk and other executives are at the White House to meet with President Trump (Business Insider)
Tesla and SpaceX CEO Elon Musk is at the White House.
Musk is one of several executives attending President Donald Trump's meeting on manufacturing Monday morning. Reuters' reporter Roberta Rampton snapped a shot of Musk in the White House's Roosevelt Room, along with executives from Lockheed Martin, Whirlpool, Under Armour, and Johnson & Johnson.
Trump Revamps U.S. Trade Focus by Pulling Out of Pacific Deal (Bloomberg)
With the stroke of a pen, President Donald Trump abruptly ended the decades-old U.S. tilt toward free trade by acting to withdraw from an Asia-Pacific accord that had been promoted by companies including Nike Inc. and Wal-Mart Stores Inc. as well as family farmers and ranchers.
The Women's Marches may have been the largest demonstration in US history (Vox)
Crowd estimates from Women’s Marches on Saturday are still trickling in, but political scientists say they think we may have just witnessed the largest day of demonstrations in American history.
Pope Francis warns against electing right-wing populists: ‘Hitler did not steal power’ (Raw Story)
In an hour-long interview with Spanish newspaper El Pais conducted as Donald Trump was being sworn in as US president, the pontiff also condemned the idea of using walls and barbed wire to keep out foreigners, among them refugees and migrants.
Donald Trump took the oath of office in front of a comically small crowd (Think Progress)
So much for his huge ratings draw. Despite the unseasonably warm weather, the crowds at Donald Trump’s inauguration ceremonies on Friday fell well short of expectations.
Government 'tried to bury' its own alarming report on climate change (Independent)
The Government has been accused of trying to bury a major report about the potential dangers of global warming to Britain – including the doubling of the deaths during heatwaves, a “significant risk” to supplies of food and the prospect of infrastructure damage from flooding.
Trump doling out plum adviser jobs to rich friends (Politico)
Rudy Giuliani, one of Donald Trump's top political surrogates and a millionaire, is running point on the president-elect's cybersecurity policies. Carl Icahn, a billionaire friend in New York, is charged with cutting regulations.
Obama issued fewer executive orders on average than any president since Cleveland (Pew Research Center)
Barack Obama averaged fewer executive orders per year in office than any U.S. president in 120 years. The executive orders he did issue, however, face an uncertain future under President Donald Trump, who has characterized some of Obama’s orders as “illegal and overreaching.”
White House website: Civil rights out, Melania’s jewelry in (Think Progress)
In the minutes after Donald Trump took the presidential oath of office on Friday, the White House website immediately transitioned, and many pages were notably missing. But there was still room to promote First Lady Melania Trump’s jewelry line.
GIULIANI: 500,000 Women Who Marched Against Trump Didn't Even Know What They Were Protesting (InfoWars)
The former mayor of New York questioned the 500,000 people who participated in the Women’s March on Washington.
China Says It Is Ready To Assume "World Leadership", Slams Western Democracy As "Flawed" (Zero Hedge)
Over the weekend China used the Trump inauguration to warn about the perils of democracy, touting the relative stability of the Communist system as President Xi Jinping heads toward a twice-a-decade reshuffle of senior leadership posts.
Donald Trump and Vladimir Putin: The plutocratic evil twins claim to stand against the neoliberal economic order (they don’t)Ten days before Donald Trump’s inauguration, BuzzFeed published the unconfirmed “Trump dossier” reportedly compiled by former MI6 agent Christopher Steele, igniting a storm of controversy on many fronts.
Neo-Nazi Richard Spencer doesn’t want you to call him a Nazi: It’s ‘a historical term’ (Raw Story)
Neo-Nazi Richard Spencer wants you to know that actually, he’s not a Nazi, but a supporter of “identity politics for white Americans and for Europeans around the world” and that the ethnic cleansing he and his allies are calling for would be the “peaceful” kind.
Health and Biotech
Pharma Lobby Fights Back Against Trump Criticism With TV Ads (Bloomberg)
Big pharma’s lobbying arm is fighting back against outrage over rising drug costs from the public and President Donald Trump, who has the industry in his crosshairs.
Life on the Home Planet
'Money stained with blood': Pope Francis lashes out at the Italian mafia (AFP)
Pope Francis on Monday blasted the "money stained with blood" and "evil power" wielded by Italian organised crime as he met the heads of the country's anti-mafia squad.
Iraqi forces claim recapture of eastern Mosul after 100 days of fighting (Reuters)
Iraqi officials said on Monday government forces had taken complete control of eastern Mosul, 100 days after the start of their U.S.-backed campaign to dislodge Islamic State militants from the city.
This anxiety-inducing video shows more than 100 years of climate change in 20 seconds (Science Alert)
NASA and the US National Oceanic and Atmospheric Administration (NOAA) confirmed this week that 2016 really was the hottest year on record… again.
Scientists have just melted a solid below its freezing point (Science Alert)
Thanks to the way chemical bonds between molecules work, phase transitions are generally pretty simple – when a substance hits its freezing point, it starts to solidify, and when it hits its boiling point, it starts to vaporise.
The most detailed 'full disk' view of Earth ever has been released – and it's incredible (Science Alert)
Below is one of the most detailed full-disk photos of Earth ever taken – and the US government is now downloading a fresh version of it every 15 minutes.
