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Situational Awareness: Reporting earnings this week are Citi, JPMorgan and Wells Fargo on Tuesday, BofA and Goldman Sachs on Wednesday (along with some higher-profile regional banks), and Morgan Stanley on Friday.
🎙 "The way to get started is to quit talking and begin doing." - See who said it and why it matters at the bottom.
Illustration: Aïda Amer and Sarah Grillo/Axios
The world's total debt surged by some $9 trillion in the first three quarters of 2019, according to data from the Institute of International Finance, bringing the world's total debt load to $253 trillion, or 322% of its GDP — a record high.
Why it matters: In times of economic strength, economists exhort countries to pare back their debt burdens and pay it down to protect against future unrest and downturn.
What it means: The two may be linked. Liz Ann Sonders, chief investment strategist at Charles Schwab, told Axios earlier this year that the weak growth seen by the U.S. and much of the rest of the globe may be directly caused by the ever-growing debt.
Be smart: Even Fed chair Jerome Powell, who has been careful to focus his remarks almost exclusively on the strengths of the U.S. economy, was dour in his assessment of current U.S. debt levels.
Between the lines: The U.S. led the way in debt accumulation last year, with government debt-to-GDP rising to an all-time high of 102% of GDP, IIF finds.
What's next: All signs point to the debt binge continuing. Thanks to low interest rates and loose central bank policy, IIF estimates that total global debt will exceed $257 trillion in the first quarter of 2020.
The Trump administration has "reached out to the North Koreans" to ask them to resume negotiations. (Axios)
The U.S. and China have agreed to hold a series of meetings semiannually to handle trade disputes and economic reforms. (WSJ)
Iran vowed to conduct a thorough investigation and bring "culprits" to justice after admitting it shot down a jet initially reported to have crashed because of mechanical failure. (Bloomberg)
Taiwanese President Tsai Ing-wen, whose party advocates for Taiwan's formal independence from China, won a landslide victory with record voter turnout. (Bloomberg)
Walmart fired around 50 of its India executives as part of its restructuring in the country. (Reuters)
Friday's jobs report missed expectations, but still delivered solid numbers, showing the U.S. economy added well over 100,000 jobs and the unemployment rate remained near a 50-year low.
On one hand: BLS reported that the number of people who were employed part time but would rather be full-time employees declined by 507,000 over the year.
On the other hand: The wage increases for production and nonsupervisory workers had hit a decade high of 3.6% in October, showing a glaring deceleration to December.
Plus, the average work week fell to 34.3 hours per week — indicating a lack of demand for labor at what should be a high-demand time of year.
High-tech mattress company Casper made clear it plans to go public on Friday by filing an S-1 with the SEC, which was full of interesting tidbits, including its plan to harness the "Sleep Economy" with the help of its “Sleep Arc.”
What's happening: Casper has helped open up a booming industry and raked in $312 million in the first nine months of 2019. However, its S-1 filing is raising some eyebrows.
Details: Most notable in the filing is the pronounced slowdown in growth since 2017, says Vincent Ning, director of research and operations at online investment advisor Titan.
Yes, but: Even though the company is still losing money — a characteristic Wall Street turned against in a major way in 2019 — Casper has begun to stem its losses and is losing less money as it grows, in contrast to companies like Uber and Lyft.
The bottom line: Perhaps the most attractive part of Casper is its gross margins, which "do appear healthy," rising above 50% in the third quarter, "and are on track to place Casper firmly in league with premium-tier Sleep Number territory."
In the latest sign that U.S. stock traders may have gotten a bit too bullish, Bloomberg reported last week that short selling on the popular ETF that tracks the S&P 500 known as SPY fell to 1.1% as a percentage of shares outstanding, according to data from IHS Markit.
Watch this space: Bloomberg also notes that around 82% of S&P 500 companies are currently trading above their 200-day average price, the highest percentage in two years.
Microsoft has been a big winner for stock traders over the past year, delivering gains of nearly 60%. But Sony hasn't been far behind and the two companies are preparing to go head-to-head again as Sony releases its PlayStation 5 and Microsoft debuts Xbox Series X.
The latest: A poll from research firm Civic Science shows U.S. consumers favor the Xbox, with 57% of respondents saying they are more excited for the latest Microsoft offering than its Sony rival. The same result holds true across gender and racial lines.
Yes, but: Consumers who say they play video games daily say they are more excited about the new PlayStation (44% to 25%).
The bottom line: If these new consoles create enough hype and can deliver returns in the $38 billion video game console market, 2020 could be an even bigger year for Microsoft and Sony.
Reality check: No matter which console consumers prefer, Microsoft and Sony can both win. In May, they announced a strategic partnership to co-develop game-streaming technology and host some of PlayStation’s online services on Microsoft's Azure cloud platform.
Of note: CivicScience's survey was taken in January among more than 1,600 Americans age 13 and up.
Walt Disney debuted the very first Mickey Mouse comic strip on Jan. 13, 1930.