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Jan 31, 2019, by Lorcan Roche Kelly
(Bloomberg)
Patience is a virtue
Bulls are cheering after Federal Reserve Chair Jerome Powell signaled the bank is finished raising rates for now. U.S. stocks are set for their biggest January rally in three decades, with European markets in line for their biggest monthly gain since October 2015. Interest-rate futures are showing few signs of another hike in 2019, and have raised the chances of a cut in 2020. Goldman Sachs Group Inc. economists see just a 25 percent chance of a rate rise in the second quarter, down from 55 percent previously.
If all else fails
Time seems to be running out for Deutsche Bank AG to prove that it can stand on its own feet. Executives at the bank, ahead of fourth-quarter results tomorrow, are concerned that a government-brokered merger with rival Commerzbank AG may quickly become the only option if there is no turnaround in the first three months of this year, people briefed on their thinking said. The lender dropped more than 3 percent in Frankfurt trading this morning, with Commerzbank also losing ground.
Trade talks
President Donald Trump will meet China’s Vice Premier Liu He in the Oval Office today as two days of high-level trade talks come to an end will little indication so far that China is willing to bend to U.S. demands. While a breakthrough was never expected at this point, investors will look to the concluding statement promised by the White House for progress on core issues such as intellectual property rights, market access and promises to buy more American goods. The deadline for striking a trade deal is March 1.
To the brink
The European Union has long learned that the time for brinksmanship is literally at the brink — and they seem happy to push Brexit talks to the very edge of the March 29 exit date in order to create maximum pressure for a deal. While the EU says the existing arrangement is not up for renegotiation, there may be room to allow an extension of the current deadline, although the appetite for further dragging out the issue appears low.
Coming up…
Initial jobless claims data at 8:30 a.m. Eastern Time will give one last look at the employment situation ahead of tomorrow’s payrolls number. November’s new home-sales data is at 10:00 a.m. The huge week for corporate earnings continues with Amazon.com Inc., General Electric Co., DowDuPont Inc., and Baker Hughes all set to report.
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