Illustration: Rebecca Zisser/Axios
A battle between California politicians and PG&E, the state's largest utility, is being waged over who should have to pay the price of wildfire damage, Axios' Courtenay Brown and Andrew Freedman write.
Why it matters: Companies are being forced to face the consequences of a changing climate, which is leading to more frequent and destructive wildfires and other natural disasters. PG&E's situation is a warning to other power companies and businesses around the country.
The big picture: The Camp fire, which destroyed the town of Paradise, was the costliest catastrophe worldwide, with $16.5 billion in damages, per reinsurance company Munich Re.
"Market participants have woken up to the reality that [wildfires] can happen again and probably will. The expected value of future wildfire liabilities is so much bigger [thanks to climate change]," Michael Wara, a research fellow at Stanford University's Energy and Policy program, tells Axios.
PG&E could be on the hook for billions of dollars in liability costs related to last year and the prior year's wildfires, far more than its insurance would cover.
Driving the news: California is one of the few states that hold utilities liable for damages tied to their equipment, even if the companies were in compliance with the state's safety rules.
Why you will hear about this again: The rest of the U.S. is increasingly feeling the effects of climate change.
The bottom line: PG&E's predicament could be repeated elsewhere as the impacts of climate change hit increasingly hard.
Geisha Williams' departure from PG&E takes the percentage of Latina Fortune 500 CEOs from 0.2% to 0.0%, equaling the percentage of black female CEOs. With Indra Nooyi stepping down as CEO of PepsiCo in October 2018, the total number of Fortune 500 CEOs who are women of color is now 0.2%. The lone woman leading a Fortune 500 company is Joey Wat of Yum China.
Editor's note: This piece has been corrected to show that the total number of Fortune 500 CEOs who are women of color is 0.2% and that Joey Wat is the CEO of Yum China.
Federal Reserve Board Chairman Jerome Powell. Photo: Getty Images
"Don't underestimate how likely it is that the Fed just backs away from everything because they don't want the politics. [The Fed doesn't] want to be susceptible to criticism that they are doing something to hurt Trump or aid Trump."— Jefferies' Chief Market Strategist David Zervos
Fed Chairman Jay Powell will hold a press conference after every FOMC meeting in 2019. Zervos says that rather than providing more clarity, the market may just tire of Powell's indecisiveness and start listening to someone else.
"It's like a friend who says that one day they're coming out to meet you and then they don't come to meet you and then the next day they do come to meet you. After a while, I don't know when they are coming or not. Maybe the market will start listening to [Fed Vice Chairman] Rich Clarida or [New York Fed President] John Williams."
China posted its largest trade surplus with the U.S. on record in 2018, the country's government data showed Sunday. The trade surplus was nearly $50 billion greater than 2017, with exports rising by 11.3%.
Why it matters: President Trump has made cutting the trade deficit with China a top administration priority, however it has widened significantly since he became president.
Worth mentioning: China's global trade surplus — how much the country exports vs what it imports from the rest of the world — fell to its lowest level since 2013.
"The partial government shutdown is now the longest on record, with little chance of a near-term resolution. It has now lasted long enough that we have to start thinking about the impact on first quarter GDP growth, which was already set to slow as a result of the drop in stock prices in the fourth quarter and the fading fiscal push... if the shutdown were to last through the whole quarter, we would look for an outright decline in first quarter GDP."— Pantheon Macroeconomics Chief Economist Ian Shepherdson
Photo: Sean Gallup/Getty Images
Last year's tax reform spurred stronger-than-expected car sales by giving consumers more disposable income, but the payback will come this spring when many Americans could discover they're not getting the tax refund they had expected, Axios' Joann Muller writes.
Why it matters: Car sales are a key driver of the U.S. economy, and the industry sees a big uptick every spring as consumers turn their tax refund into a deposit on a new or used car. Without that seasonal bounce, 2019 auto sales may be lower, making a recession more likely.
Yes, but: Tax reform isn't the only reason auto sales are likely to decline this year. Vehicles are becoming less affordable, due to tariffs on steel and other commodities, rising interest rates and the cost of premium features and technology.
The bottom line: Cox Automotive, the digital information giant behind AutoTrader, Kelly Blue Book and Manheim Auto Auctions, sees U.S. auto sales falling to 16.8 million units in 2019.
The British pound rallied going into the weekend, rising to its highest level against the dollar since Nov. 22. That's odd considering the spate of bad news for British Prime Minister Theresa May's one and only Brexit deal.
It seems, however, that the market is not pricing a better Brexit agreement, but no Brexit at all, says Bannockburn Global Forex Chief Market Strategist Marc Chandler.
What they're saying: "This bullish price action suggests market participants may be looking beyond the January 15 vote in the House of Commons," Chandler wrote in a Sunday note to clients.
Watch this space: CFTC data shows speculators are still widely betting on the British pound to fall in value, but new data hasn't been reported since Dec. 21 because of the U.S. government shutdown.