British Prime Minister Theresa May unveiled her Brexit Plan B on Monday — and it looks a lot like Plan A.

May launched a mission to resuscitate her rejected European Union divorce deal, setting out plans to get it approved by Parliament after securing changes from the EU to a contentious Irish border measure.

May’s opponents expressed incredulity: British lawmakers last week dealt the deal a resounding defeat, and EU leaders insist they won’t renegotiate it.

Opposition leader Jeremy Corbyn of the Labour Party accused May of being in “deep denial” about her doomed deal.

“This really does feel a bit like Groundhog Day,” he said, referring to the 1993 film starring Bill Murray, in which a weatherman is fated to live out the same day over and over again.

Outlining what she plans to do after her EU divorce deal was rejected by Parliament last week, May said that she had heeded lawmakers’ concerns over an insurance policy known as the “backstop” that is intended to guarantee there are no customs checks along the border between EU member Ireland and the U.K.’s Northern Ireland after Brexit.

May told the House of Commons that she would be “talking further this week to colleagues … to consider how we might meet our obligations to the people of Northern Ireland and Ireland in a way that can command the greatest possible support in the House.

“And I will then take the conclusions of those discussions back to the EU.”

The bloc insists that it won’t renegotiate the withdrawal agreement.

“She is wasting time calling for a revision or clarification over the backstop,” said German politician Udo Bullmann, head of the socialist group in the European Parliament.

Amendments

While May stuck doggedly to her deal, she also acknowledged that control over Brexit wasn’t entirely in her hands. She noted that lawmakers will be able to amend her plan when it comes to a vote in the House of Commons on Jan. 29, exactly two months before Britain is due to leave the EU.

Groups of “soft Brexit”-backing lawmakers — who want to keep close economic ties to the bloc — are planning to use amendments to try to rule out a “no-deal” Brexit and make May ease her insistence that leaving the EU means quitting its single market and customs union.

Britain and the EU sealed a divorce deal in November after months of tense negotiations. But the agreement has been rejected by both sides of Britain’s divide over Europe. Brexit-backing lawmakers say it will leave the U.K. tethered to the bloc’s rules and unable to forge an independent trade policy. Pro-Europeans argue it is inferior to the frictionless economic relationship Britain currently enjoys as an EU member.

After her deal was thrown out last week by a crushing 432-202 vote in Parliament, May said she would consult with lawmakers from all parties to find a new way forward.

But Corbyn called the cross-party meetings a “stunt,” and other opposition leaders said the prime minister didn’t seem to be listening.

On Monday, May rejected calls from pro-EU lawmakers to delay Britain’s departure from the bloc or to hold a second referendum on whether to leave.

In a nod to opposition parties’ concerns, she promised to consult lawmakers, trade unionists, business groups and civil society organizations “to try to find the broadest possible consensus” on future ties between Britain and the EU, and said the government wouldn’t water down protections for the environment and workers’ rights after Brexit.

May also said the government had decided to waive a 65 pound ($84) fee for EU citizens in Britain who want to stay permanently after Brexit.

Guy Verhofstadt, the head of the EU Parliament Brexit steering group, welcomed news that the fee was being dropped for 3 million EU nationals, saying it had been a “key demand” for the EU legislature.

Irish border

May’s immediate goal is to win over pro-Brexit Conservatives and her party’s Northern Irish ally, the Democratic Unionist Party. Both groups say they won’t back the deal unless the border backstop is removed.

The backstop proposes to keep the U.K. in a customs union with the EU in order to avoid checks on the Irish border. It is meant as a temporary measure that would last until a permanent solution is found. But pro-Brexit U.K. lawmakers fear Britain could become trapped in it, indefinitely bound by EU trade rules.

Polish Foreign Minister Jacek Czaputowicz broke ranks with EU colleagues Monday by suggesting the problem could be solved by setting a five-year time limit on the backstop.

The idea got a cool reception. Irish Foreign Minister Simon Coveney said that “putting a time-limit on an insurance mechanism, which is what the backstop is, effectively means that it’s not a backstop at all.”

Britain’s political impasse over Brexit is fueling concerns that the country may crash out of the EU on March 29 with no agreement in place to cushion the shock. That could see tariffs imposed on goods moving between Britain and the EU, sparking logjams at ports and shortages of essential supplies.

Threat of ‘no deal’

Carolyn Fairbairn, director-general of the Confederation of British Industry, said Monday was “another bleak day for business.”

“Parliament remains in deadlock while the slope to a cliff edge steepens,” she said.

Several groups of lawmakers are trying to use parliamentary rules and amendments to May’s plan to block the possibility of Britain leaving the EU without a deal.

One of those legislators, Labour’s Yvette Cooper, said May was shirking her responsibility to the country by refusing to take “no deal” off the table.

“I think she knows that she should rule out ‘no deal’ in the national interest because it would be so damaging,” Cooper told the BBC. “She’s refusing to do so, and I think she’s hoping that Parliament will do this for her. That is not leadership.” 
…

your ads here!

The International Monetary Fund has cut its forecast for world economic growth this year, citing heightened trade tensions and rising U.S. interest rates.

The IMF said Monday that it expects global growth this year of 3.5 percent, down from 3.7 percent in 2018 and from the 3.7 percent it had forecast for 2019 back in October.

 

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said IMF Managing Director Christine Lagarde as she presented the new forecasts at the World Economic Forum in Davos, Switzerland.

 

The fund left its prediction for U.S. growth this year unchanged at 2.5 percent — though a continuation of the partial 31-day shutdown of the federal government poses a risk. The IMF trimmed the outlook for the 19 countries that use the euro currency to 1.6 percent from 1.8 percent.

 

Growth in emerging-market countries is forecast to slow to 4.5 percent from 4.6 percent in 2018. The IMF expects the Chinese economy — the world’s second biggest — to grow 6.2 percent this year, down from 6.6 percent in 2018 and slowest since 1990.

 

The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts.

 

Britain’s messy divorce from the European Union and Italy’s ongoing financial struggles pose threats to growth in Europe.

 

And rising trade tensions pose a major risk to the wider world economy. Under President Donald Trump the United States has imposed import taxes on steel, aluminum and hundreds of Chinese products, drawing retaliation from China and other U.S. trading partners.

 

“Higher trade uncertainty will further dampen investment and disrupt global supply chains,” said IMF chief economist Gita Gopinath.

 

Rising interest rates in the U.S. and elsewhere are also pinching emerging-market governments and companies that borrowed heavily when rates were ultra-low in the aftermath of the 2007-2009 Great Recession.

 

As the debts roll over, those borrowers have to refinance at higher rates. A rising dollar is also making things harder for emerging-market borrowers who took out loans denominated in the U.S. currency.

 

 
…

your ads here!

The International Monetary Fund has cut its forecast for world economic growth this year, citing heightened trade tensions and rising U.S. interest rates.

The IMF said Monday that it expects global growth this year of 3.5 percent, down from 3.7 percent in 2018 and from the 3.7 percent it had forecast for 2019 back in October.

 

“After two years of solid expansion, the world economy is growing more slowly than expected and risks are rising,” said IMF Managing Director Christine Lagarde as she presented the new forecasts at the World Economic Forum in Davos, Switzerland.

 

The fund left its prediction for U.S. growth this year unchanged at 2.5 percent — though a continuation of the partial 31-day shutdown of the federal government poses a risk. The IMF trimmed the outlook for the 19 countries that use the euro currency to 1.6 percent from 1.8 percent.

 

Growth in emerging-market countries is forecast to slow to 4.5 percent from 4.6 percent in 2018. The IMF expects the Chinese economy — the world’s second biggest — to grow 6.2 percent this year, down from 6.6 percent in 2018 and slowest since 1990.

 

The World Bank and the Organization for Economic Cooperation and Development have also downgraded their world growth forecasts.

 

Britain’s messy divorce from the European Union and Italy’s ongoing financial struggles pose threats to growth in Europe.

 

And rising trade tensions pose a major risk to the wider world economy. Under President Donald Trump the United States has imposed import taxes on steel, aluminum and hundreds of Chinese products, drawing retaliation from China and other U.S. trading partners.

 

“Higher trade uncertainty will further dampen investment and disrupt global supply chains,” said IMF chief economist Gita Gopinath.

 

Rising interest rates in the U.S. and elsewhere are also pinching emerging-market governments and companies that borrowed heavily when rates were ultra-low in the aftermath of the 2007-2009 Great Recession.

 

As the debts roll over, those borrowers have to refinance at higher rates. A rising dollar is also making things harder for emerging-market borrowers who took out loans denominated in the U.S. currency.

 

 
…

your ads here!

At the Gaba landing site in Kampala, fishermen dock their boats filled with both tilapia and Nile perch.

Waiting along the shores, donning white gum boots and white coats, fish traders wait to offload the Nile perch that has turned profitable for many traders.

The fish’s commodity, known as a swim bladder, is used as an aphrodisiac in China and is now being recognized by the Ugandan government as water gold, but fishermen at the forefront say they are being exploited.

A study by the Lake Victoria Fisheries Organization has shown that a growing appetite in Asia has seen the former waste by-product becoming a multi-million-dollar export.

Idrisa Walusimbi began working as a fisherman 20 years ago. Now, he has his own boat and is chairman of the fish protection unit. He says in the early 1990s, Nile perch fish maw would be fried and eaten by locals. But lately, the Chinese market has made it more lucrative, especially for the exporter.

“You find that from the lowest fisherman, as you know, that he gains, but not so much. Then you find the middleman gains more, and the trader above gains even more, the levels keep increasing and the ones that profit the most are the final local buyer and exporter,” Walusimbi said.

Uganda, Kenya, and Tanzania collectively earn $86 million from trading the commodity. Uganda alone earned $40 million in 2017 as the largest exporter of the Nile perch swim bladder to China.

Vincent Ssempijja, Uganda’s minister for agriculture, animal industry and fisheries, says fish maw is a new item that needs to be regulated.

“That’s why we want to regulate it, so that our fish farmers and of course the fish mongers and the fisheries sector really, benefit from this very lucrative business. Yes, it’s certainly a new type of gold, so we need to look at it more critically,” Ssempijja said.

International prices for dry maw range between $450 and $1,000 per kilogram, depending on the size, quality and market strength. Fish sold to locals have the swim bladders taken out and sold for between $107 to $214 per kilogram.

At the Gaba landing site, fish processing companies have trucks loaded with the Nile Perch fish maw left intact.

The Lake Victoria Fish Organization in its report advises that the fish maw be recognized as a separate commodity from fish. Walugembe George, a fisherman, says he wishes there was a standard price so they too could benefit.

“We have always known that it’s a saleable commodity, but we sell it at low prices. So, we have been exploited. Why do the prices hike and then slump?” he asked.

The Ugandan government is currently consulting and discussing a fisheries and aquaculture bill that calls for the fish maw to be one of the products that should be regulated.

 

 
…

your ads here!

At the Gaba landing site in Kampala, fishermen dock their boats filled with both tilapia and Nile perch.

Waiting along the shores, donning white gum boots and white coats, fish traders wait to offload the Nile perch that has turned profitable for many traders.

The fish’s commodity, known as a swim bladder, is used as an aphrodisiac in China and is now being recognized by the Ugandan government as water gold, but fishermen at the forefront say they are being exploited.

A study by the Lake Victoria Fisheries Organization has shown that a growing appetite in Asia has seen the former waste by-product becoming a multi-million-dollar export.

Idrisa Walusimbi began working as a fisherman 20 years ago. Now, he has his own boat and is chairman of the fish protection unit. He says in the early 1990s, Nile perch fish maw would be fried and eaten by locals. But lately, the Chinese market has made it more lucrative, especially for the exporter.

“You find that from the lowest fisherman, as you know, that he gains, but not so much. Then you find the middleman gains more, and the trader above gains even more, the levels keep increasing and the ones that profit the most are the final local buyer and exporter,” Walusimbi said.

Uganda, Kenya, and Tanzania collectively earn $86 million from trading the commodity. Uganda alone earned $40 million in 2017 as the largest exporter of the Nile perch swim bladder to China.

Vincent Ssempijja, Uganda’s minister for agriculture, animal industry and fisheries, says fish maw is a new item that needs to be regulated.

“That’s why we want to regulate it, so that our fish farmers and of course the fish mongers and the fisheries sector really, benefit from this very lucrative business. Yes, it’s certainly a new type of gold, so we need to look at it more critically,” Ssempijja said.

International prices for dry maw range between $450 and $1,000 per kilogram, depending on the size, quality and market strength. Fish sold to locals have the swim bladders taken out and sold for between $107 to $214 per kilogram.

At the Gaba landing site, fish processing companies have trucks loaded with the Nile Perch fish maw left intact.

The Lake Victoria Fish Organization in its report advises that the fish maw be recognized as a separate commodity from fish. Walugembe George, a fisherman, says he wishes there was a standard price so they too could benefit.

“We have always known that it’s a saleable commodity, but we sell it at low prices. So, we have been exploited. Why do the prices hike and then slump?” he asked.

The Ugandan government is currently consulting and discussing a fisheries and aquaculture bill that calls for the fish maw to be one of the products that should be regulated.

 

 
…

your ads here!

China’s 2018 economic growth decelerated to 6.6 percent after activity in the final quarter of the year declined amid a tariff battle with Washington.

Data announced Monday showed economic growth cooled to a post-global crisis quarterly low of 6.4 percent in the three months ending in December from the previous quarter’s 6.5 percent.

Chinese economic growth has been slowing since regulators tightened controls on bank lending in late 2017 to rein in a debt boom.

Growth held up through much of 2018 despite President Donald Trump’s tariff hikes on Chinese goods in a fight over Beijing’s technology ambitions. But exports contracted in December as the penalties began to dampen demand.

Growth in investment, retail sales and other indicators also slowed.
…

your ads here!

The sale of Nile Perch fish maw in Uganda has become a lucrative business, especially for distributors. The fish maw – or dried swim bladder – is used as an aphrodisiac in China. But Ugandan fishermen bringing in the perch say they are being exploited while others are reaping the profits. Halima Athumani reports from Kampala.
…

your ads here!

U.S. President Donald Trump said on Saturday progress is being made toward a trade deal with China and denied that he was considering lifting tariffs on Chinese products.

“Things are going very well with China and with trade,” he told reporters, adding that he had seen some “false reports” indicating that U.S. tariffs on Chinese products would be lifted.

“If we make a deal certainly we would not have sanctions and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very

well happen with China. It’s going well. I would say about as well as it could possibly go.”
…

your ads here!

U.S. President Donald Trump said on Saturday progress is being made toward a trade deal with China and denied that he was considering lifting tariffs on Chinese products.

“Things are going very well with China and with trade,” he told reporters, adding that he had seen some “false reports” indicating that U.S. tariffs on Chinese products would be lifted.

“If we make a deal certainly we would not have sanctions and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very

well happen with China. It’s going well. I would say about as well as it could possibly go.”
…

your ads here!

World stock indexes jumped on Friday, with Wall Street posting a fourth straight week of gains, and the dollar had its first positive week since mid-December as optimism increased that an end is in sight to the U.S.-China trade conflict.

Stocks were boosted by a Bloomberg report that said China sought to raise its annual goods imports from the United States by more than $1 trillion in order to reduce its trade surplus to zero by 2024.    

That followed a report on Thursday that U.S. Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.

Progress in trade talks

While the equity rally lifted all major sectors, trade-sensitive industrials posted among the biggest S&P 500 sector gains, up 1.9 percent on the day. The Philadelphia SE semiconductor index rose more than 2 percent and Germany’s exporter-heavy DAX was up 2.6 percent.    

“There seems to be some progress going in the trade negotiations,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

While that was the biggest influence, “we’ve still got momentum since the first of the year,” he said. “Some of the money that came out of the market at year-end, whether it was high frequency traders or tax-loss selling, is coming back in.”

Adding to strength in equities and supporting U.S. Treasury yields was data that showed U.S. manufacturing output increased the most in 10 months in December. 

Some strategists said relatively light equity trading volume this week indicated that some investors were still waiting on the sidelines.    

The Dow Jones Industrial Average rose 336.25 points, or 1.38 percent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 percent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 percent, to 7,157.23.

The S&P 500 registered its biggest four-week percentage gain since October 2011. The index is now 8.9 percent below its Sept. 20 record close after dropping 19.8 percent below that level — near the 20-percent threshold commonly considered to confirm a bear market — on Christmas Eve.

STOXX 600 index is up

The pan-European STOXX 600 index rose 1.80 percent and MSCI’s gauge of stocks across the globe gained 1.23 percent.

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for another round of talks aimed at resolving the trade dispute between the world’s two largest economies.

Recent indicators show signs that the Chinese economy is losing momentum.

The trade optimism boosted the dollar against other major currencies.

The dollar index rose 0.31 percent, with the euro down 0.26 percent to $1.1365.

U.S. Treasury yields rose to three-week highs as investors piled back into Wall Street.  

Oil prices jump

Benchmark 10-year notes last fell 12/32 in price to yield 2.7878 percent, compared with 2.747 percent late on Thursday.

Oil prices jumped about 3 percent, rising after OPEC detailed specifics on its production-cut activity to ease global oversupply.   

Brent crude gained $1.52 to settle at $62.70 a barrel, or 2.48 percent higher. U.S. WTI crude futures added $1.73 to settle at $53.80 a barrel, or 3.32 percent up.

 
…

your ads here!

World stock indexes jumped on Friday, with Wall Street posting a fourth straight week of gains, and the dollar had its first positive week since mid-December as optimism increased that an end is in sight to the U.S.-China trade conflict.

Stocks were boosted by a Bloomberg report that said China sought to raise its annual goods imports from the United States by more than $1 trillion in order to reduce its trade surplus to zero by 2024.    

That followed a report on Thursday that U.S. Treasury Secretary Steven Mnuchin was considering lifting some or all tariffs imposed on Chinese imports. The Treasury denied Mnuchin had made any such recommendation.

Progress in trade talks

While the equity rally lifted all major sectors, trade-sensitive industrials posted among the biggest S&P 500 sector gains, up 1.9 percent on the day. The Philadelphia SE semiconductor index rose more than 2 percent and Germany’s exporter-heavy DAX was up 2.6 percent.    

“There seems to be some progress going in the trade negotiations,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

While that was the biggest influence, “we’ve still got momentum since the first of the year,” he said. “Some of the money that came out of the market at year-end, whether it was high frequency traders or tax-loss selling, is coming back in.”

Adding to strength in equities and supporting U.S. Treasury yields was data that showed U.S. manufacturing output increased the most in 10 months in December. 

Some strategists said relatively light equity trading volume this week indicated that some investors were still waiting on the sidelines.    

The Dow Jones Industrial Average rose 336.25 points, or 1.38 percent, to 24,706.35, the S&P 500 gained 34.75 points, or 1.32 percent, to 2,670.71 and the Nasdaq Composite added 72.77 points, or 1.03 percent, to 7,157.23.

The S&P 500 registered its biggest four-week percentage gain since October 2011. The index is now 8.9 percent below its Sept. 20 record close after dropping 19.8 percent below that level — near the 20-percent threshold commonly considered to confirm a bear market — on Christmas Eve.

STOXX 600 index is up

The pan-European STOXX 600 index rose 1.80 percent and MSCI’s gauge of stocks across the globe gained 1.23 percent.

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for another round of talks aimed at resolving the trade dispute between the world’s two largest economies.

Recent indicators show signs that the Chinese economy is losing momentum.

The trade optimism boosted the dollar against other major currencies.

The dollar index rose 0.31 percent, with the euro down 0.26 percent to $1.1365.

U.S. Treasury yields rose to three-week highs as investors piled back into Wall Street.  

Oil prices jump

Benchmark 10-year notes last fell 12/32 in price to yield 2.7878 percent, compared with 2.747 percent late on Thursday.

Oil prices jumped about 3 percent, rising after OPEC detailed specifics on its production-cut activity to ease global oversupply.   

Brent crude gained $1.52 to settle at $62.70 a barrel, or 2.48 percent higher. U.S. WTI crude futures added $1.73 to settle at $53.80 a barrel, or 3.32 percent up.

 
…

your ads here!

U.S. consumer sentiment tumbled in early January to its lowest level since President Donald Trump was elected more than two years ago as a partial shutdown of the federal government and financial market

volatility stoked fears of a sharp deceleration in economic growth.

The drop in confidence reported by the University of Michigan on Friday was the clearest sign yet that the impasse in Washington over Trump’s demands for $5.7 billion to help build a wall on the U.S. border with Mexico was negatively affecting the economy.

Trump has touted high consumer confidence as an indication of the good job he is doing on the economy. While consumer sentiment remains relatively high, the gathering clouds over the economy could make households

more cautious about spending, leading to slower growth. Consumer spending accounts for more than two-thirds of the U.S. economy.

“This report on consumer sentiment is the first concrete evidence that the economy is going to fall and fall hard if Washington does not end the shutdown,” said Chris Rupkey, chief economist at MUFG in New York. “It is going to be hard to see real GDP growth of more than 1 to 1½ percent in the first quarter if the consumer goes on a buying strike.”

The longest government shutdown in U.S. history has left 800,000 government workers without paychecks. Private contractors working for many government agencies are also without wages.

The University of Michigan said its consumer sentiment index fell 7.7 percent to a reading of 90.7 this month, the lowest reading since October 2016 and the steepest drop since September 2015. Economists had forecast a reading of a 97.0.

The survey’s measure of current economic conditions decreased to 110.0 from a reading of 116.1 in December. Its measure of consumer expectations tumbled to a reading of 78.3, the lowest since October 2016, from 87.0 in late December.

Several factors

The University of Michigan attributed the decline in sentiment to “a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies.”

It said that half of the survey’s respondents “believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”

Economists estimate the partial shutdown of the government, which started Dec. 22, is subtracting as much as two-tenths of a percentage point from quarterly GDP growth every week.

Other surveys have also shown an ebb in business sentiment.

“Sentiment among both households and businesses has been coming off the sugar highs, which were caused by tax cut hopes at the beginning of the Trump presidency,” said Harm Bandholz, chief U.S. economist at UniCredit in New York.

U.S. financial markets shrugged off the fall in sentiment, with investors focusing on another report Friday that showed manufacturing output had surged by the most in 10 months in December, and on hopes for progress in the U.S.-China trade row.

Stocks on Wall Street rallied, while the dollar rose against a basket of currencies and U.S. Treasury prices fell.

Factory activity

The broad-based jump in manufacturing output in December reported by the Federal Reserve could allay fears of a sharp slowdown in factory activity.

Manufacturing activity, which accounts for about 12 percent of the economy, is slowing as some of the boost to capital spending from last year’s $1.5 trillion tax cut package fades.

In addition, a strong dollar and cooling growth in Europe and China are hurting exports. Lower oil prices are also slowing purchases of equipment for oil and gas well drilling.

Production at factories increased at a 2.3 percent annualized rate in the fourth quarter after expanding at a 3.7 percent pace in the July-September period. It increased 2.4 percent in 2018, the largest gain since 2012, after advancing 1.2 percent in 2017.

“While the manufacturing strength in December is a favorable signal for the economy, we should keep in mind that it came after soft results in earlier months,” said Daniel Silver, an economist at JPMorgan in New York. “A broad range of manufacturing surveys also have been weakening lately, so the strength in the manufacturing output in December may prove to be short-lived.”

Last month, motor vehicle production surged 4.7 percent after gaining 0.2 percent in November. Excluding motor vehicles and parts, manufacturing advanced a solid 0.8 percent last month after gaining 0.1 percent in November.

December’s surge in manufacturing output, together with a rise in mining production, offset a weather-related drop in utilities, leading to a 0.3 percent increase in industrial production. Industrial output rose 0.4 percent in November. It increased at a 3.8 percent rate in the fourth quarter after

notching a 4.7 percent gain in the third quarter.
…

your ads here!

U.S. consumer sentiment tumbled in early January to its lowest level since President Donald Trump was elected more than two years ago as a partial shutdown of the federal government and financial market

volatility stoked fears of a sharp deceleration in economic growth.

The drop in confidence reported by the University of Michigan on Friday was the clearest sign yet that the impasse in Washington over Trump’s demands for $5.7 billion to help build a wall on the U.S. border with Mexico was negatively affecting the economy.

Trump has touted high consumer confidence as an indication of the good job he is doing on the economy. While consumer sentiment remains relatively high, the gathering clouds over the economy could make households

more cautious about spending, leading to slower growth. Consumer spending accounts for more than two-thirds of the U.S. economy.

“This report on consumer sentiment is the first concrete evidence that the economy is going to fall and fall hard if Washington does not end the shutdown,” said Chris Rupkey, chief economist at MUFG in New York. “It is going to be hard to see real GDP growth of more than 1 to 1½ percent in the first quarter if the consumer goes on a buying strike.”

The longest government shutdown in U.S. history has left 800,000 government workers without paychecks. Private contractors working for many government agencies are also without wages.

The University of Michigan said its consumer sentiment index fell 7.7 percent to a reading of 90.7 this month, the lowest reading since October 2016 and the steepest drop since September 2015. Economists had forecast a reading of a 97.0.

The survey’s measure of current economic conditions decreased to 110.0 from a reading of 116.1 in December. Its measure of consumer expectations tumbled to a reading of 78.3, the lowest since October 2016, from 87.0 in late December.

Several factors

The University of Michigan attributed the decline in sentiment to “a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies.”

It said that half of the survey’s respondents “believed that these events would have a negative impact on Trump’s ability to focus on economic growth.”

Economists estimate the partial shutdown of the government, which started Dec. 22, is subtracting as much as two-tenths of a percentage point from quarterly GDP growth every week.

Other surveys have also shown an ebb in business sentiment.

“Sentiment among both households and businesses has been coming off the sugar highs, which were caused by tax cut hopes at the beginning of the Trump presidency,” said Harm Bandholz, chief U.S. economist at UniCredit in New York.

U.S. financial markets shrugged off the fall in sentiment, with investors focusing on another report Friday that showed manufacturing output had surged by the most in 10 months in December, and on hopes for progress in the U.S.-China trade row.

Stocks on Wall Street rallied, while the dollar rose against a basket of currencies and U.S. Treasury prices fell.

Factory activity

The broad-based jump in manufacturing output in December reported by the Federal Reserve could allay fears of a sharp slowdown in factory activity.

Manufacturing activity, which accounts for about 12 percent of the economy, is slowing as some of the boost to capital spending from last year’s $1.5 trillion tax cut package fades.

In addition, a strong dollar and cooling growth in Europe and China are hurting exports. Lower oil prices are also slowing purchases of equipment for oil and gas well drilling.

Production at factories increased at a 2.3 percent annualized rate in the fourth quarter after expanding at a 3.7 percent pace in the July-September period. It increased 2.4 percent in 2018, the largest gain since 2012, after advancing 1.2 percent in 2017.

“While the manufacturing strength in December is a favorable signal for the economy, we should keep in mind that it came after soft results in earlier months,” said Daniel Silver, an economist at JPMorgan in New York. “A broad range of manufacturing surveys also have been weakening lately, so the strength in the manufacturing output in December may prove to be short-lived.”

Last month, motor vehicle production surged 4.7 percent after gaining 0.2 percent in November. Excluding motor vehicles and parts, manufacturing advanced a solid 0.8 percent last month after gaining 0.1 percent in November.

December’s surge in manufacturing output, together with a rise in mining production, offset a weather-related drop in utilities, leading to a 0.3 percent increase in industrial production. Industrial output rose 0.4 percent in November. It increased at a 3.8 percent rate in the fourth quarter after

notching a 4.7 percent gain in the third quarter.
…

your ads here!

The European Union insisted Friday that agriculture be kept out of the EU-U.S. trade negotiations, despite Washington’s wishes to include the vast sector, and said any overall deal will be limited in scope.

The EU Commission announced its pro posals for a negotiating mandate from the 28 member states and said that the EU negotiations will be “strictly focused on the removal of tariffs on industrial goods, excluding agricultural products.”

EU Trade Chief Cecilia Malmstrom also said that she is preparing a target list of American products it will hit with punitive tariffs if the Trump administration goes through with its threat to impose duties on European auto imports.

Last July, during a period of heightened tensions over trade, U.S. President Donald Trump and EU Commission President Jean-Claude Juncker agreed to start talks meant to achieve “zero tariffs” and “zero subsidies” on non-automotive industrial goods.

With the U.S. criticizing the Europeans for allegedly dragging their feet in the talks, Malmstrom said “the EU is committed to upholding its side of the agreement reached by the two Presidents.”

Any agreement would fall well short of the scope of the free trade deal that had been discussed in recent years — but paused in 2016 after Trump slammed such wide-ranging international deals as unfair to the U.S.

Instead, Malmstrom said, the deal both sides are now looking at could be concluded “quite quickly. We could finalize this and it would be beneficial to all of us.”

 
…

your ads here!

An array of crises will keep several world leaders away from the annual World Economic Forum (WEF) in Davos next week, which takes place against a backdrop of deepening gloom over the global economic and political outlook.

Anxieties over trade disputes, fractious international relations, Brexit and a growth slowdown that some fear could tip the world economy into recession are set to dominate the Jan. 22-25 Alpine meeting.

The WEF’s own Global Risks Report set the tone this week with a stark warning of looming economic headwinds, in part because of geopolitical tensions among major powers.

​No Trump, Macron or May

Some 3,000 business, government and civil society figures are scheduled to gather in the snow-blanketed ski resort, but among them are only three leaders of the Group of Seven most industrialized countries: Japanese Prime Minister Shinzo Abe, German Chancellor Angela Merkel and Italian Premier Giuseppe Conte.

Donald Trump, who stole the Davos limelight last year with a rare appearance by a sitting U.S. president, pulled out of this year’s event as he grapples with a partial U.S. government shutdown.

On Thursday, the White House said Trump had also canceled his delegation’s trip to Davos because of the shutdown, now in its 27th day. Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo had been expected to lead the U.S. team, according to two senior administration officials.

French President Emmanuel Macron is also skipping the meeting as he seeks to respond to the “yellow vest” protests, while British Prime Minister Theresa May battles to find a consensus on Brexit.

​No Xi, either

Outside the G7, the leaders of Russia and India are shunning Davos, while China —whose president, Xi Jinping, was the first Chinese leader to attend the elite gathering in 2017 to offer a vigorous defense of free trade — is sending Xi’s deputy instead.

That will leave the likes of British Finance Minister Philip Hammond, Chinese Vice President Wang Qishan and a host of central bankers with the task of trying to reassure business chiefs.

“Davos will be dominated by a high level of anxiety about stock markets, a slowdown in growth and international politics,” said Nariman Behravesh, chief economist at IHS Markit. “The leadership presence is lower than last year but those who are going … will be seeking to impart a sense of confidence and calm business and investors’ nerves.”

​Forum still has its glitz

Before the U.S. cancellation, a Trump administration official had said the U.S. delegation would also discuss the importance of reforming institutions such as the World Trade Organization, the International Monetary Fund and the World Bank.

Trump has harshly criticized globalization and questioned U.S. participation in multilateral institutions such as the WTO, calling for a revamp of international trade rules.

Davos watchers said the absence of so many top leaders this year did not mean the glitzy forum had lost its status as a global stage for top politicians to present their agendas.

“Abe is going to Davos not just as Japanese prime minister but also as chair of the G20. It will be a perfect opportunity to lay the groundwork of upcoming G20 meetings,” said a Japanese government source familiar with international affairs.

“Of course there may be inconveniences such as missing opportunities to hold bilateral meetings, but that won’t undermine the importance of Davos,” he said.

A Chinese official who has attended Davos regularly but will not go this year said China had never expected to make progress at the meeting on the trade dispute with the United States. 

“It’s just an occasion for making a policy statement,” he said.

​Networking opportunities

The low turnout among major Western leaders may also give more prominence to political personalities who may otherwise be upstaged. Davos will be the first major international outing for Brazilian President Jair Bolsonaro, elected on a wave of anti-establishment and conservative nationalism also seen elsewhere.

He said on Twitter he would present “a different Brazil, free of ideological ties and widespread corruption.”

For business chiefs, the value of Davos lies not so much in the public sessions but in the networking and deal-making opportunities on the sidelines of the main conference.

“It’s the best place to pitch for ideas, build connections and get your brand known,” said Chen Linchevski, chief executive of Precognize, an Israel-based start-up developing software that prevents technical or quality failures at manufacturing plants.

“It’s the kind of place where in a few days you meet people you wouldn’t easily meet otherwise,” said Linchevski, who is paying 50,000 Swiss francs ($50,495) to attend the event.
…

your ads here!

U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported Thursday, citing people familiar with the internal deliberations.

But Trade Representative Robert Lighthizer has resisted the idea, and the proposal had not yet been introduced to President Donald Trump, according to the Journal.

U.S. stocks advanced on the news even as a Treasury spokesman working with the administration’s trade team denied the report.

“Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs or other parts of the negotiation with China,” the spokesman said.

“This an ongoing process with the Chinese that is nowhere near completion.”

Chinese Vice Premier Liu He will visit the United States on Jan. 30 and 31 for the latest round of trade talks aimed at resolving a bitter trade dispute between the world’s two largest economies.

In December, Washington and Beijing agreed to a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.

Mid-level U.S. and Chinese officials met in Beijing last week to discuss China’s offers to address U.S. complaints about intellectual property theft and increase purchases of U.S. goods and services.

Lighthizer did not see any progress made on structural issues during those talks, Republican U.S. Senator Chuck Grassley said earlier this week.

The Trump administration is scheduled to increase tariffs March 2 on $200 billion worth of Chinese goods to 25 percent from 10 percent.

The timeline is seen as ambitious, but the resumption of face-to-face negotiations has bolstered hopes of a deal.

China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfers.

Industrial stocks, which have been sensitive to trade developments, jumped 1.4 percent after the Wall Street Journal report.
…

your ads here!

Indonesian President Joko Widodo has accused his election rival of allowing corrupt candidates on his legislative ticket and failing to include women in senior positions.

Widodo and former General Prabowo Subianto, along with their running mates, faced off Thursday in the first of five debates before the April 17 election. The debate focused on terrorism, human rights, corruption, and law and order.

Opinion polls show Widodo commanding 52 percent to 54 percent popular support and Subianto 30 percent to 35 percent. About 10 percent of voters are undecided and another 15 percent are considered swing voters, meaning the race has the potential to tighten.

Subianto, making his second bid for president after being narrowly defeated by Widodo in 2014, waffled when asked why his party has the highest number of candidates with corruption records.

“Maybe the corruption they did was not huge, maybe he or she just, what I mean is, the theft was indeed wrong, but the most important thing to be eradicated was a corrupter who stole trillions of rupiah (hundreds of millions of dollars) of state money, of people’s money,” he said.

Questioning Subianto’s opening statement of a commitment to empowering women, Widodo said he has nine women in important Cabinet positions but there are few women in the leadership of Subianto’s Gerindra party.

Subianto said his party has many female candidates and criticized the quality of decision making by Widodo’s women ministers.

Widodo, the first Indonesian president from outside the country’s Jakarta elite, has made upgrading Indonesia’s infrastructure the signature policy of his five year-term.

In debating human rights, none of the candidates addressed Subianto’s involvement in human rights abuses during the dictator Suharto’s regime that ended two decades ago.

 

 
…

your ads here!

Workers around Tunisia went on strike Thursday to demand higher pay in a standoff with a government struggling to reduce unemployment, poverty and social tensions.

All flights in and out of the North African country’s main airport were cancelled, and schools nationwide were closed. Ports, public transport, hospitals and other public services were also disrupted.

 

Marathon last-minute negotiations between the government and union umbrella group UGTT failed to avert Thursday’s strike by public sector workers.

 

Thousands of people gathered at the national union headquarters in Tunis and marched through the capital’s main thoroughfare, carrying signs reading “Get Out!” and “The People Want the Fall of the Regime.” Rallies were also held in other cities.

 

Addressing the crowd in Tunis, the head of the UGTT, Noureddine Tabboubi, accused the government of “neglecting the workers” as runaway inflation has eroded purchasing power.

 

The International Monetary Fund has urged public sector salary freezes and other reforms in exchanges for loans to Tunisia’s struggling economy.

 

The union boss accused the government of being afraid to “move a little finger without the green light” of the IMF. Unions want an end to salary freezes for Tunisia’s 600,000 public sector workers.

 

President Beji Caid Essebsi has called for calm. Thursday’s strike comes after new tensions erupted last month when a journalist set himself on fire to protest unfulfilled promises of Tunisia’s 2011 Arab Spring revolution.

 

Similar rallies were held throughout the country, notably in southern provinces where the strike nearly paralyzed public services.

 

Prime Minister Youssef Chahed warned that the strike would result in a “considerable cost” to an already fragile economy and might push the government to seek further foreign loans with tough conditions.

 

Speaking on public television Wataniya 1 on Wednesday night, Chahed said, “We did everything possible to avoid the strike in presenting proposals that improve purchasing power while at the same time taking into account the country’s capabilities.”

 

He invited the unions back to the negotiating table after Thursday’s strike.

 

 

 
…

your ads here!

China’s economic czar, Vice Premier Liu He, will travel to the United States later this month for the second round of negotiations aimed at resolving the ongoing trade war between the global economic giants.

Commerce Ministry spokesman Gao Feng told reporters in Beijing Thursday that Liu will visit Washington on January 30-31. He was invited by U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

U.S. negotiators were optimistic after the first round of talks in Beijing last week that the two sides would be able to resolve tariff disputes that have upset global markets.

The trade talks are the result of an agreement last month between President Trump and Chinese President Xi Jinping to stop the tit-for-tat tariff conflict between the two countries for 90 days starting on New Year’s Day.

The United States has long complained about access to the vast Chinese market and Beijing’s demands U.S. companies reveal their technology advances.

If no deal is reached by March 2, U.S. tariffs on $200 billion Chinese goods will rise from 10 percent to 25 percent.
…

your ads here!

John C. Bogle, who simplified investing for the masses by launching the first index mutual fund and founded Vanguard Group, died Wednesday, the company said. He was 89.

Bogle did not invent the index fund, but he expanded access to no-frills, low-cost investing in 1976 when Vanguard introduced the first index fund for individual investors, rather than institutional clients.

The emergence of funds that passively tracked market indexes, like the Standard & Poor’s 500, enabled investors to avoid the higher fees charged by professional fund managers who frequently fail to beat the market. More often than not, the higher operating expenses that fund managers pass on to their shareholders cancel out any edge they may achieve through expert stock-picking.

Mutual fund industry critic

Bogle and Vanguard shook up the industry further in 1977. The company ended its reliance on outside brokers and instead began directly marketing its funds to investors without charging upfront fees known as sales loads.

Bogle served as Vanguard’s chairman and CEO from its 1974 founding until 1996.

He stepped down as senior chairman in 2000, but remained a critic of the fund industry and Wall Street, writing books, delivering speeches and running the Bogle Financial Markets Research Center.

The advent of index funds accelerated a long-term decline in fund fees and fostered greater competition in the industry. Investors paid 40 percent less in fees for each dollar invested in stock mutual funds during 2017 than they did at the start of the millennium, for example. But Bogle continued to maintain that many funds were overcharging investors, and once called the industry “the poster-boy for one of the most baneful chapters in the modern history of capitalism.”

Bogle also believed that the corporate structure of most fund companies poses an inherent conflict of interest, because a public fund company could put the interests of investors in its stock ahead of those owning shares of its mutual funds. Vanguard has a unique corporate structure in which its mutual funds and fund shareholders are the corporation’s “owners.” Profits are plowed back into the company’s operations, and used to reduce fees.

$5 trillion under management

Vanguard, based in Valley Forge, Pennsylvania, manages $5 trillion globally. It helped usher in a new era of investing, and index funds have increasingly become the default choice for investors. In 2017, investors plugged $691.6 billion into index funds while pulling $7 billion out of actively managed funds, according to Morningstar.

Vanguard offers both index and managed funds, but remains best-known for its index offerings. Vanguard’s original index fund, now known as the Vanguard 500 Index, is no longer the company’s biggest, but remains among the company’s lowest-cost funds.

Bogle spent the first part of his career at Wellington Management Co., a mutual fund company, then based in Philadelphia. He rose through the ranks and, in his mid-30s, was tapped to run Wellington.

He engineered a merger with a boutique firm that was making huge sums, but was ousted after the stock market tanked in the early 1970s, wiping out millions in Wellington’s assets. He said he learned an important lesson in how little money managers really know about predicting the market.

Knack for math

Bogle suffered several heart attacks and underwent a heart transplant in 1996, the year he stepped down as CEO. He reached the mandatory retirement age of 70 for Vanguard directors in 1999 and left as senior chairman the next year.

Vanguard did not provide a cause of death. Philly.com is reporting he died of cancer, citing Bogle’s family.

John Clifton Bogle was born in May 1929 in Montclair, New Jersey, to a well-off family; his grandfather founded a brick company and was co-founder of the American Can Co. in which his father worked.

Bogle attended Manasquan High School in Manasquan, N.J, for a time, then got a scholarship to the prestigious all-boys Blair Academy in Blairstown, New Jersey. It was at Blair that Bogle discovered his knack for math. He graduated from Blair in 1947 and was voted most likely to succeed.

Bogle graduated from Princeton with a degree in economics in 1951. His thesis was on the mutual fund industry, which was then still in its infancy.

Bogle is survived by his wife, Eve, six children, 12 grandchildren and six great-grandchildren.
…

your ads here!

Female employees at Citigroup Inc around the world are paid just 71 percent of what men earn, the giant bank said on Wednesday, declaring its intentions to close its gender pay gap.

A Citigroup shareholder group that sought data on the pay gap said the bank is the first U.S. company to disclose such figures.

The U.S.-based bank employs more than 200,000 people in more than 100 countries, and more than half those employees are female, it said.

Tackling the 29 percent gap means increasing the number of women in senior and higher-paying roles, promoting women to at least 40 percent of assistant vice president through managing director jobs, Citigroup said in a statement.

Citigroup said it disclosed the data in response to a shareholder proposal from Arjuna Capital, an investment management firm.

The bank said its “raw pay gap” showed median pay for females globally was 71 percent of the median for men.

The raw gap measures the difference in median total compensation not adjusted for job function, level and geography.

With those adjustments, women are paid an average of 99 percent of what men are paid, it said.

“We have work to do, but we’re on a path that I’m confident will allow us to make meaningful progress,” Sara Wechter, head of human resources, said in a statement.

In the United States overall, women last year working full-time year-round earned 80 percent of what men earned, according to commonly cited data from the U.S. Census Bureau.

Congress outlawed pay discrimination based on gender in 1963, yet public debate over why wages still lag drastically for women has snowballed in recent years.

Globally, the World Economic Forum reported an economic gap of 58 percent between the sexes for 2016, costing the global economy $1.2 trillion annually.

Last January, Citigroup said it was increasing compensation for women and minorities to bridge pay gaps in the United States, the United Kingdom and Germany, becoming the first big U.S. bank to respond to a shareholder push to analyze and disclose its gender pay gap.

This past year it expanded its pay equity review beyond those three countries to its workforce globally, it said.

 
…

your ads here!

The Ports of Los Angeles and Long Beach on Wednesday said they set all-time records for moving cargo in 2018, after U.S. retailers and manufacturers pulled forward imports to avoid higher tariffs on Chinese goods. The Port of Los Angeles, North America’s busiest container port, handled 9.46 million 20-foot equivalent units (TEUs) last year, the most in its 111-year history and 1.2 percent more than in 2017.

The neighboring Port of Long Beach processed more than 8 million TEUs for the first time last year, after container cargo totals jumped 7 percent from 2017.

“This is a rush of cargo based on political trade policy,” said Gene Seroka, executive director for the Port of Los Angeles, where direct trade with China accounted for just over half of the $284 billion in cargo the port handled in 2017. “Many people were fearful that we were going to go from a 10 percent tariff on certain items to 25 percent on January 1,” Seroka said.

The U.S. and China in late November agreed to a 90-day cease-fire in their bitter trade war. Under that deal, the U.S. will keep tariffs on $200 billion worth of Chinese imports at 10 percent.

That news came after many importers sped up orders for everything from apparel to auto parts to avoid the higher tariffs.

The cargo surge at Los Angeles/Long Beach and other major U.S. ports spurred disruptions that are rippling through the supply chain. U.S. warehouses are stuffed to the rafters, forcing some importers to delay port cargo pickups or to park containers in parking lots.

The National Retail Federation and Hackett Associates’ Global Port Tracker expect 2018 imports to jump 5.3 percent to a record 21.6 million TEUs. They also project cooling in the early months of 2019, as imports typically soften due to a post-holiday drop in demand and Lunar New Year factory shutdowns in Asia.

“We’ll see a little bit of a lull during Lunar New Year and thereafter. That in and of itself will allow us to catch up,” Seroka said.
…

your ads here!