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Illustration: Aïda Amer/Axios
Analysts at Goldman Sachs say they expect the European Central Bank to announce it is restarting its bond-buying stimulus program as soon as March, despite having just called it off in December.
Renewed stimulus for the faltering euro zone economy, which has looked weaker with each new data release, has been expected, but Goldman's incorporation of fresh ECB stimulus as part of its market outlook could mark a watershed moment for central banks and the global economy.
What it means: The ECB's stimulus program was created to hold up failing markets in the aftermath of the European crisis that followed the 2008 U.S. financial crisis. The goal was to remove it as soon as the economy could stand on its own.
Like the Federal Reserve's quantitative easing, the ECB's TLTRO program, started in 2014, was considered an emergency, unconventional and temporary fix. It was never imagined as a program that would stay in place for 5 years or more.
Remember: For most of last year policymakers had been preparing asset managers and markets for 2019 to be the year things finally returned to normal. Central bankers said that this year:
There's now significant doubt any of those things will happen.
Another telltale sign that the world is again moving away from normalized interest rates is the resurgent growth of negative-yielding bonds. Having been largely unheard of before the ECB and BOJ officially set negative policy rates, by 2016 more than $10 trillion of global debt held a negative yield, meaning investors paid to hold it.
"The recent uptrend is driven by the deteriorating outlook for Europe and also Japan," Deutsche Bank Chief International Economist Torsten Sløk tells Axios. "Which again is caused by three forces: the slowdown in China, U.S. trade war, and Brexit uncertainty."
Smart speaker company Sonos is re-examining its Chinese supply chains as a result of the U.S.-China trade war, the company's CEO tells Axios' Courtenay Brown.
Spence said it could take "up to one year" to shift manufacturing and its supply chain out of China to avoid feeling the effect from a potential escalation of tariffs. However, the impact the company has felt so far from the trade war is "financially immaterial."
The big picture: Hardware companies are in the trade war's line of fire, as Axios' Ina Fried reported last year.
GoPro, for example, "warned it would move most manufacturing of U.S.-bound gear outside of China by this summer."
Between the lines: Sonos belongs to a class of hardware-dependent companies — along with GoPro and Fitbit — whose stocks have taken a hit as Google, Amazon and Apple assert more dominance in these product areas.
Quick take: Spence tells Axios that while "macroeconomic conditions can certainly impact consumer demand through business cycles," the 16-year-old company has survived economic downturns.
U.S. engine maker Cummins on Wednesday reported lower-than-expected quarterly profit and forecast full-year sales below analysts' estimates, Reuters reports, playing out almost exactly as CEO Tom Linebarger warned in a July New York Times op-ed.
"These tariffs put us in a worse position now than when we started these negotiations, and we are concerned there is no end in sight. Because of this uncertainty, companies like ours are standing still, unclear on how and where to invest."— Cummins CEO Tom Linebarger
What it means: Cummins' soft guidance further amplifies concerns of a slowdown in sales of heavy-duty trucks in North America.
Cummins said Wednesday it expects 2019 production of heavy-duty trucks in North America to rise just 2%, a significant pullback from the nearly 30% growth the industry chalked up last year.
Don't forget: The company's stock dropped 11.5% in December and fell 24% in 2018.
Ratings agency Fitch warned Wednesday that Venezuela's ongoing political and diplomatic crisis raises the risks of increased near-term economic pain as well as further oil market disruptions.
Driving the news: U.S. Sen. Marco Rubio (R-Fla.) said Wednesday that newly declared Venezuelan President Juan Guaidó will name a new board for U.S.-based oil company Citgo, which is owned by PDVSA. Citgo is weighing the possibility of bankruptcy and other contingency plans.
Nicolas Maduro has steadfastly held that he is the rightful president of Venezuela and shows no signs of conceding to demands from the U.S.
Maduro's regime positioned a gas tank and shipping containers on a bridge to block humanitarian aid from entering Venezuela from Colombia, Bloomberg reported.
What's next? Guaidó's economic plan includes seeking financial aid from multilateral organizations, bilateral loans, restructuring Venezuela's debt and bringing private investment back into the country's oil sector. He has also called for eliminating currency controls and privatizing state assets.
On the bright side: "Should a successful political transition combined with economic stabilization reforms be implemented," Fitch analysts said, "Venezuela would have significant potential."
Illustration: Sarah Grillo/Axios
When companies promise thousands of high-paying jobs in exchange for major tax breaks and incentives, those jobs often don't show up, a new study shows. And that may have major implications for the future of Amazon's HQ2, Axios' Erica Pandey reports.
The study — an examination of 164 deals in Texas since 2003 — found that about a quarter of the companies walked back on promised jobs after signing.
Why it matters: In New York, public scrutiny is triggering doubts about the future of a much-publicized $3 billion concession to Amazon to build a new headquarters employing tens of thousands in Queens.
Now the accord is being threatened: On Monday, New York's state Legislature nominated Sen. Michael Gianaris — a vocal HQ2 opponent — to a 3-person board on which any member has the power to veto Amazon's plans.
Milwaukee has the highest-profile case yet: Foxconn got $4.5 billion in public money with the expectation that it would deliver 13,000 jobs.
Foxconn did not respond to requests for comment.
History: Amenhotep III was the ninth pharaoh of the Eighteenth Dynasty of Egypt and one of the greatest African kings in history. He devoted himself to expanding diplomatic contacts and to extensive building in Egypt and Nubia.
His reign was a period of unprecedented prosperity when Egypt reached the peak of its artistic and international power.
Amenhotep III's palace at Thebes was the most opulent in the ancient world. He created monuments that were 70 feet high, weighed 700 tons and carved out of a single rock.
He built the most surviving statues of any Egyptian pharaoh, with more than 250 of his statues having been discovered and identified. Though he ruled in the 14th century B.C., many of his works can still be viewed today.