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🎙 “If liberty means anything at all, it means the right to tell people what they do not want to hear.” - See who said it and why it matters at the bottom.
Photo illustration: Sarah Grillo/Axios. Photo: Olivier Douliery/AFP via Getty Images
Stock indexes around the globe have been roaring higher since the start of the year, but expectations of improved economic growth and soothed international tensions may be getting a bit ahead of themselves.
Driving the news: The IMF released its latest World Economic Outlook Monday, showing yet another revision lower of its expectations for global growth in 2019 and in 2020. IMF head Kristalina Georgieva also issued a number of warnings, suggesting that the worst may not have passed yet.
Why it matters: Economists and market watchers worry that if trade and the manufacturing sector do not improve soon, the health of the global economy could be at risk.
Yes, but: Georgieva told Axios following her speech that she understands why stock investors have gotten especially bullish lately, even in light of the IMF's worsening assessment of global growth.
Watch this space: Pessimism and worry were the big themes during last year's impressive run for global equities, but that feeling reversed itself in the fourth quarter of 2019 and a number of metrics are starting to show that traders now have become overly exuberant.
The bottom line: Deutsche Bank investment strategist Parag Thatte points out, "Equity positioning, like the market itself, has run far ahead of current growth as investors price in a global growth rebound."
Georgieva also signaled some worry over the overly complex nature of financial markets, particularly in the U.S. and other industrial countries like Japan and Western Europe, in her remarks on Friday.
What it means: Deepening financial markets have long been considered beneficial for a country's growth and development, but Georgieva argued that research is beginning to show that there is a point at which financial depth becomes negative.
The intrigue: The 2020 Edelman trust barometer, released Monday, shows data may be starting to show the stress from overly deep financial markets in industrial countries.
What they're saying: "[N]ational income inequality is now the more important factor in institutional trust," CEO Richard Edelman said in a release accompanying the results.
Climate change threatens to provoke “green swan” events, or "climate black swans," that could trigger a systemic financial crisis and endanger humanity more than financial crises. (BIS)
President Trump and French President Emmanuel Macron agreed to a truce in their dispute over digital taxes that will mean neither side imposes punitive tariffs this year. (Bloomberg)
Asian equity prices fell as worries about a coronavirus, a cousin of respiratory illness SARS, caused a fourth death and following the Bank of Japan's decision to keep interest rates on hold. (MarketWatch)
Boeing is seeking funding of $10 billion or more to deal with costs stemming from its two fatal 737 MAX crashes. (CNBC)
Isabel dos Santos, Africa’s richest woman, looted possibly billions of dollars from Angola and its state oil company, with the help of McKinsey, Boston Consulting Group, PwC and other Western firms. (ICIJ)
Axios' Dave Lawler writes: PwC's annual Global CEO survey — 1,581 CEOs across 83 territories — was conducted in the fall and released Monday as the World Economic Forum opened. It makes for some pretty alarming reading.
The big picture: 53% of CEOs expect global economic growth to decline in 2020, up from 29% in 2019 and just 5% in 2018. Their views of their own companies’ prospects were the bleakest since 2009.
Go deeper: Read Dave's full story here.
There were two themes that persisted in November's U.S. job openings and labor turnover survey (JOLTS) released on Friday — the stubborn quits rate and the consistent decline in the number of job openings.
The big picture: Job openings fell by 561,000 to 6.8 million, the Labor Department said, the biggest drop since August 2015. That pushed the number of job openings to the lowest level since February 2018.
On the other side: After rising near a record high in July and August, touching 2.4%, the quits rate has fallen back and again looks stuck at 2.3%. The percentage of people who willingly leave a job is a positive sign of economic momentum and confidence.
Activist Coretta Scott King addresses the 1988 Democratic National Convention in Atlanta. Photo: Wally McNamee/Corbis via Getty Images
Coretta Scott King played an integral role in establishing the Fed's dual mandate of stable prices and maximum employment.
Why it matters: Most central banks have only a singular objective — maintaining price stability, or keeping inflation in check. The Fed, however, has two and that is thanks in no small part to King.
Details: "King played a pivotal, but not widely recognized, role in advocating for full employment," a policy paper from the Center for Economic and Policy Research notes.
What it means: The Humphrey-Hawkins Act "clarified the role that monetary policy can play in improving the employment picture and required the Fed to weigh the impact that its interest rate policy would have on the job market."
The bottom line: AP reporter Errin Haines points out that Martin Luther King Jr. Day "is Mrs. King’s as much as it is Dr. King’s, because she demanded that the country that disrespected her husband in life would respect him in death, year after year, until it became a reality."
George Orwell wrote the quote at the top in a proposed preface for "Animal Farm" that was never published, but can be read in full here in the New York Times archives.