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"In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms." - See who said it and why it matters at the bottom.
Protesters have taken to the streets all over the world to object to U.S. actions, including this rally in front of the U.S. embassy in Manila. Photo: Ted Aljibe/AFP via Getty Images
The price of gold hit its highest in nearly seven years, oil hit a four-month peak and stocks were in the red across Asia and Europe, with Gulf stocks from Kuwait and Saudi Arabia well off and S&P futures lower, as tensions between the U.S. and Iran ratcheted up over the weekend.
What happened: President Trump warned in a tweet that if Iran retaliated for the killing of General Qasem Soleimani last week it would face "very hard and very fast" attacks on 52 targets.
Yes, but: While the war of words has many on edge and fearing the worst, for financial markets much of the reaction seen since Friday's airstrike will be short-lived, if history is a guide.
What to watch: The attack on Soleimani and coming fallout will most acutely impact the oil market, analysts say.
Italy, Germany and other European governments are bailing out struggling banks, skirting regulations meant to keep public money out of the private system. (WSJ)
Multiple former Wells Fargo executives could be indicted this month and already are under criminal investigation in connection with the bank’s fake-account scandal. (American Banker)
Federal regulators are considering mandatory flight-simulator training before U.S. pilots can fly Boeing’s 737 MAX jets again. (WSJ)
“It seems implausible to me that the Fed will be able to stop their repo operations by the end of January,” said Mark Cabana, head of U.S. rates strategy at BofA Securities. (Reuters)
Illustration: Lazaro Gamio/Axios
U.S. farmers have been given a bit of a lifeline by the "phase one" U.S.-China trade deal, but without concrete specifics on what China will purchase there remains some worry about how they will be able to support themselves and their farms in 2020.
Background: Farmers had a rough 2019, even with a hefty subsidy package provided to them by the Trump administration as relief from the trade war.
Why it matters: It was the highest level of subsidies in 14 years, and "definitely not the normal," Farm Bureau chief economist John Newton told Axios in November.
What's next: It’s unclear whether U.S. farmers will get more government aid in 2020, but experts say more farmers are becoming financially dependent on the subsidies, Beth Burger of the Columbus Dispatch wrote in November.
The big picture: Many are unsure of what crops to plant because no specific details have yet been released on the deal, Reuters reported, noting that farmers in export-dependent regions say they can’t continue to sell their crops for below the cost of production without additional subsidies.
Between the lines: It's hard to handicap the odds of a third round of farm subsidies because the Trump administration essentially pulled the money for the first two rounds "out of thin air," NPR's Dan Charles reported.
The bottom line: The world's agriculture supply chains have already changed and American farmers aren't entirely sure where they fit or what products China will be buying.
The IHS Markit and ISM manufacturing indexes diverged sharply again in December, with ISM's gauge showing the worst manufacturing report in a decade and Markit's showing a solid reading well above 50, which is the line separating expansion from contraction.
What's happening: One reason for this divergence, highlighted by IHS Markit's chief business economist Chris Williamson in a recent blog, may be that IHS explicitly tells respondents to "confine their reporting to US facilities/factories."
State of play: Markit's global manufacturing index and the overwhelming majority of its indexes outside the U.S. declined sharply in December, but the U.S. held firm, dipping just 0.2 points from November's total.
What it means: Markit's gauge may more accurately reflect the situation in the U.S. However, because global supply chains are so interconnected, the situation for American manufacturing companies may be as dire as the ISM's survey suggests.
Given the way S&P 500 earnings have beaten estimates over the past few years it is likely the index will report earnings growth in the fourth quarter — the first and only quarter of growth last year.
Between the lines: John Butters, FactSet's senior earnings analyst, said in a note that on average nearly three quarters of S&P 500 companies' actual earnings have exceeded estimates by about 5%.
Therefore, Butters estimates, it's likely actual Q4 earnings will come in at around 2.1%.
This week's big ticket item is obviously the government's nonfarm payrolls report on Friday, which will show whether the U.S. economy was able to continue November's strong job gain of more than 250,000 or whether job growth slowed back to trend, below 200k.
On Jan. 6, 1941, President Franklin D. Roosevelt delivered his "Four Freedoms" speech.
"The first is freedom of speech and expression — everywhere in the world. The second is freedoms of every person to worship god in his own way — everywhere in the world. The third is freedom from want … everywhere in the world. The fourth is freedom from fear … anywhere in the world. That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation."