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Good Morning. In today’s edition, markets are off to a rough start this month, a rocky time for politics in Europe, turnover in the White House, and more. |
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It’s a difficult December for markets so far. Trade tensions, signs of slowing global growth and central-bank tightening have roiled stocks, bonds and commodities in what historically has been a strong month of the year. Also spooking investors: a Treasurys market flirting with a yield-curve inversion, where shorter-dated bonds yield more than longer-dated ones—seen as a possible recession signal. For the first time since the dot-com era, investors aren’t embracing a “buy-the-dip” strategy of jumping in after selloffs, a sign the longest bull market in U.S. history may be in its late stages. But investors have been bargain-hunting in emerging markets, which are coming off one of the worst selloffs in years. Despite the market mayhem, many economic trends don’t fit with patterns that preceded previous downturns, writes the Journal’s Paul Hannon. European stocks fell in morning trading Monday, after Asian markets ended lower across the board. Futures pointed to lower openings for the Dow industrials and S&P 500. Follow the story: Subscribe to our Markets and Real Time Economics newsletters, and visit WSJ.com today for updates. |
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From reporter Akane Otani: Investors have had to become much more cautious as the bull market has stretched on. Most of the portfolio managers we speak to say they are still invested in U.S. shares—it’s hard to give up on them entirely when corporate profits still look healthy—but slowing global and domestic growth has taken a toll on investors’ enthusiasm this year. That’s something that will be worth keeping a close eye on as we head into 2019 and beyond. |
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Times have turned rocky in European politics, as well. | | More than 100,000 antigovernment protesters took to the streets of France for a fourth consecutive weekend. The WSJ’s Stacy Meichtry assesses President Emmanuel Macron’s options. GETTY IMAGES |
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Riots resurfaced across France this weekend, and Brexit continued to roil the U.K. In France, President Emmanuel Macron faces unprecedented pressure to roll back his economic overhaul after a fourth consecutive weekend of “yellow vest” protests led to 135 injuries, more than 1,000 arrests and a downward revision in the fourth-quarter growth forecast. In the U.K., Parliament is expected Tuesday to reject Prime Minister Theresa May’s Brexit deal on Tuesday, throwing plans for the country’s departure from the European Union into turmoil. |
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White House revolving door keeps turning. | | Nick Ayers, chief of staff to U.S. Vice President Mike Pence, and White House Chief of Staff John Kelly in May. PHOTO: JONATHAN ERNST/REUTERS |
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President Trump said Saturday that chief of staff John Kelly will leave “toward the end of the year.” That opens the way for a third person in the job in less than two years, reflecting an extraordinary level of turnover in senior White House ranks. Vice President Mike Pence’s chief of staff, Nick Ayers, won’t be getting the job, officials said yesterday. The longtime Republican operative had been seen as a top candidate. On Friday, President Trump nominated William Barr to be attorney general, a job he held during the first Bush administration. |
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The arrest of Huawei’s CFO and heir apparent was the latest salvo in a decadelong effort by U.S. officials to hinder a company they see as a threat to national security and America’s global edge in technology innovation. The Chinese company’s top suppliers include the likes of Broadcom, Qualcomm and Intel—with the latter two also working with it on 5G technologies—so any U.S. action against Huawei for alleged sanctions violations could devastate Huawei and curtail business for Silicon Valley. Over the weekend, China demanded the immediate release of the finance chief, Meng Wanzhou. Her arrest has sparked concerns that American executives in China may be vulnerable to retaliation. According to documents filed by her lawyers, Ms. Meng is a cancer survivor who suffers from health issues including hypertension and difficulty eating solid food, and she is willing to put up her two Vancouver homes as collateral for bail. In Tokyo, prosecutors indicted Nissan and its former chairman, Carlos Ghosn, on charges of underreporting his compensation on company financial reports over five years. Mr. Ghosn’s arrest last month derailed his plan to replace Nissan CEO Hiroto Saikawa, people with knowledge of the matter said—a new twist to the drama inside the company. Mr. Saikawa has said Nissan investigated alleged wrongdoing by Mr. Ghosn for months and supplied information to prosecutors. Unless he confesses, Mr. Ghosn is likely to have a lengthy stay in a Japanese jail, staying in a room measuring about 80 square feet, equipped with a washstand, a small bookshelf, a toilet and a small table. Detainees can bathe for 15 minutes twice a week. |
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Amazon.com is fighting a barrage of seller scams. The company has fired several employees suspected of having helped supply independent merchants with inside information. In recent weeks, Amazon has also deleted thousands of suspect reviews, restricted sellers’ access to customer data and stifled some techniques that trick the site into surfacing products higher in search results. The crackdown hasn’t stopped some sellers from sabotaging rivals, including by maliciously flagging products as counterfeits or trademark infringements. Sellers are also buying Amazon wholesaler accounts on the black market to gain access to volumes of product listings. |
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A secret workforce funds North Korea and defies sanctions. | | Ugandan President Yoweri Museveni with a senior North Korean official in Entebbe in 2014. PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES |
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North Korean soldiers, companies and contractors still operate around the world, despite United Nations prohibitions meant to curtail Kim Jong Un’s nuclear ambitions. A swath of African nations—including Uganda, Tanzania, Sudan, Zambia and Mozambique—that pledged to sever Pyongyang ties nurtured over decades instead are making the ties more surreptitious, according to diplomats and defense-industry analysts. |
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What We’re Following Uber-Lyft Race: The ride-sharing rivals both filed IPO paperwork in recent days, broadening their competition from a battle for customers to one for global investors. Saudi Shutdown: The Senate this week is set to vote on a resolution to withdraw U.S. support for the Saudi-led coalition at war in Yemen. Football Family: The battle for control of the Denver Broncos, whose owner is incapacitated by Alzheimer’s, has spilled out into the open. Rape Case: Prosecutors in Minnesota are close to deciding whether to charge Chinese billionaire Liu Qiangdong with the sexual assault of a college student, which he denies. Out in India: Reserve Bank of India governor Urjit Patel resigned, citing “personal reasons.” |
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Trending Stories at WSJ.com | | PHOTO: EMILY PRAPUOLENIS/THE WALL STREET JOURNAL |
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Why you need better headphones, and which ones you should buy. (Read) American entrepreneurs who flocked to China are heading home, disillusioned. (Read) General Motors bids farewell to its breakthrough electric car, the Chevy Volt. (Read) |
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What Else We’re Reading Why millions of Americans could face surprise emergency-room bills in January. (Bloomberg) Greece’s financial crisis has led to a baby bust. (Washington Post) The wooing of Jared Kushner: How the Saudis got a friend in the White House. (New York Times) |
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Today’s Question and Answer In response to our question about the arrest of a prominent Chinese tech executive at the request of the U.S.: Richard Saloom from Alabama said: “While I think it sends a strong message, retaliatory arrests of American executives are sure to follow.” Slade Howell from North Carolina wrote: “So far the details of the charges against Ms. Meng and Huawei have yet to be revealed, but it is certain that her arrest, made at the request of the U.S., will have a significant impact on not only trade but all future negotiations with China. Huawei’s violation of sanctions with Iran is the official charge, but the larger concern is that the company is producing government-supported Chinese digital equipment capable of gathering information and possibly sabotaging foreign military equipment. On the other hand, it is also possible that the U.S. bureaucracy is using this perfectly timed move by the Justice Department to derail the Trump trade agreement with China for political purposes. There is much to be revealed.” Question for tomorrow’s 10-Point: Going back to our article above, what are your thoughts on the end of GM’s Chevy Volt? Do you have an electric car and/or an American-made car, or do you prefer a foreign-made car? Email us your comments, which we may edit before publication, to 10point@wsj.com, and make sure to include your name and location. |
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| The 10-Point was the name given to the news column that runs on the front page of The Wall Street Journal. Today’s newsletter was curated and edited by Eleanor Miller (eleanor.miller@wsj.com) in collaboration with Editor in Chief Matt Murray. Let us know what you think by replying to this email. Editor's note: The 10-Point is now a WSJ member benefit. If you receive our flagship newsletter and are not yet a member, we'll continue sending it to you for now. To ensure you don't miss out, we invite you to join us and enjoy the full breadth of scoops, analysis and great storytelling from our journalists around the globe. |
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