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Situational awareness: Germany grew 0.1% in the third quarter, just enough to avoid its first recession in six years, while the eurozone grew 0.2%, data show. (Bloomberg)
(Today's Smart Brevity count: 1,257 words, ~ 5 minutes.)
Fed chair Jerome Powell again laid out his rose-colored view of the U.S. economy on Wednesday, telling the congressional Joint Economic Committee that he sees the U.S. as “being in a good place."
Why it matters: Powell's testimony was the cherry on top of the good news sundae that has sent traders' appetite for risk soaring over the last two weeks, and priced out expectations for further U.S. interest rate cuts through the end of next year.
What we're hearing: "It's amazing the collective wisdom of the market," says Gautam Khanna, senior portfolio manager at BNY Mellon, which manages at least $1.3 trillion in assets.
Powell has maintained this rosy outlook all along, "but the market needed to see the rate cuts," Lale Akoner, BNY Mellon's global market strategist, adds.
Watch this space: Akoner says she expects the Fed to remain on pause through the end of next year and for U.S. Treasury yields to rise by around 100 basis points in the near future.
Between the lines: Fed fund futures pricing has shown investors consistently betting the economy would deteriorate this year and into 2020, forcing the Fed to continue to cut rates at least two more times by June.
Quick take: “Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely,” Powell told the congressional committee Wednesday.
What's next: Investors will be closely watching U.S. economic data to see if that is the case.
Significant increases in U.S. agriculture buys have become one of a few major sticking points holding up agreement on the "phase one" U.S.-China trade deal. (WSJ)
American Outdoor Brands cited "significant changes in the political climate" as a main reason for spinning off its Smith & Wesson gun manufacturing unit from the company. (MarketWatch)
WeWork reported a loss of $1.25 billion in the third quarter, former CEO Adam Neumann's last. The loss was an increase of more than 150% from a $497 million loss in the same period a year earlier. (Axios)
Google plans to begin offering checking accounts to customers, in coordination with Citi and a small credit union at Stanford University. (WSJ)
The Chinese government is set to eliminate restrictions on foreign ownership of fund management firms in 2020, opening up major opportunities for U.S. and other global firms to capture potentially trillions of dollars in new assets, according to new research from Deloitte.
Why it matters: The Chinese government has been taking steps in recent years to liberalize its capital markets and attract investment.
What's happening: China is facing a retirement crisis, Deloitte analysts argue, and is looking to replicate many aspects of U.S. retirement accounts like IRAs and 401(k)s to help counter the "savings gap" in its state-run Basic Pension System for Enterprise Employees, which could be depleted by 2035.
The big picture: Much of the money invested in China is handled by so-called mom and pop retail investors and Deloitte estimates the total banking and investment assets they hold will reach $30.2 trillion by 2023.
The intrigue: The growth of Chinese public investment plans is very tied to China's GDP growth. Given the divergent possibilities in the next few years, analysts see the possible inflows to public funds diverging by literally trillions of dollars.
Disney was the best performing stock on the Dow Jones Industrial Average Wednesday, jumping 7.3% after reporting 10 million subscribers had signed up for its Disney+ streaming platform on the opening day.
Why it matters: The stock rose to an all-time high and had its biggest single-session gain since April on a day when the Dow, S&P 500 and Nasdaq were little moved.
The big picture: Since announcing Disney+ on Nov. 8, 2018, the stock has gained 28.2%.
Money in the bank: Analysts at Credit Suisse predicted 10 million subscribers would be the magic number for Disney+ in a note back in September, calling the figure "an inflection point" where "70% of investors would start new positions or add to existing ones."
The unrest in Chile could not have come at a worse time for the country's investors, who had already been facing a wave of economic uncertainty.
What's happening: The economy slowed from 4% growth last year to less than 2% in each of the first two quarters of 2019.
Chile's central bank is facing a lose-lose scenario.
Between the lines: With that in mind, it will be difficult for the central bank to cut rates to help stimulate the decelerating economy, Win Thin, global head of currency strategy at Brown Brothers Harriman, writes in a note to clients.
Chilean stocks have taken it on the chin. So far this year, MSCI's Chile index, typically a stable performer, has fallen nearly 26% year to date, while MSCI's overall emerging market index has risen nearly 10%.
The bottom line: "While we would normally expect Chilean equities to start outperforming, we cannot ignore the negative impact of prolonged political uncertainty and so expect the underperformance to continue," Thin says.
His comments came in response to Warren's latest TV ad, which is titled “Elizabeth Warren Stands Up to Billionaires,” and will begin running on the network soon.