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Illustration: Sarah Grillo/Axios
Companies around the world are changing their tunes and addresses — uprooting supply chains and moving their headquarters to get ahead of unsettled global chaos, Axios' Courtenay Brown writes.
Driving the news: Dyson said Tuesday it would move its headquarters from the U.K. to Singapore — not because of Brexit, according to its founder, leading Brexit advocate Sir James Dyson, but to "future-proof" the business.
That may be, but the company is part of a growing pattern.
Watch this space: More than half of the 48 financial services companies in EY's Brexit tracker said they are considering moving some of their operations and or staff out of the UK, thanks to Brexit uncertainty.
Why it matters: “Those are big calls," Carlos Gutierrez, a former Commerce secretary and former CEO of Kellogg who now chairs Albright Stonebridge Group, tells Axios. "Moving a supply chain is a big investment, and putting together a supply chain is a big investment to start with."
Be smart: Behind the scenes firms are continuing to plan for a "'no-deal' scenario," Omar Ali, UK Financial Services Leader at EY, wrote in the company's Brexit tracker report. "The closer we get to March 29 without a deal, the more assets will be transferred and headcount hired locally or relocated."
Chief executives ramped up talk about Brexit in the 3rd quarter, as the deadline for the U.K. to leave the EU inches closer.
Still, "Brexit" doesn't even crack the top 5 of most mentioned issues. It falls behind "tax reform," "trade/tariffs," "Congress," "financial regulations" and "administration."
While some had suggested China could cut its purchases of U.S. Treasury bonds as a way to retaliate or escalate its trade war with the U.S., the vice chairman of the China Securities Regulatory Commission (CSRC) said such a move is unlikely.
What they're saying: Fang Xinghai told a World Economic Forum panel in Davos, Switzerland, that he doesn’t think his country "will in any way significantly reduce its investment into the U.S. government bond market."
Worth noting: We don't know for certain whether the Chinese have been buying more Treasuries. The CFTC, which tracks international Treasury buying, has been closed due to the government shutdown, with the last report in December showing October's data.
The University of Michigan's consumer sentiment index fell 8% in January, to 90.7, the lowest reading since October 2016 and the biggest drop since September 2015. It missed expectations by a mile, with economists anticipating a reading of 97.0.
Beyond the headline number: Measures of consumer sentiment, views on current economic conditions and economic expectations all reversed course from December, turning negative on a month-over-month and year-over-year basis.
According to the survey, economists estimate the U.S. government shutdown, which began Dec. 22, is subtracting as much as 0.2% from quarterly GDP growth every week.
"What you have now is not much more upside being seen, you see a lot more downside with the political agenda and trade conflicts, and no promise or hope for anything else like infrastructure," PwC global chairman Bob Moritz told CNBC on Tuesday.
There is no end in sight to the government shutdown, and that is adding a new level of uncertainty to decisions by market participants and more importantly by the Federal Reserve.
Betaween the lines: At what point does the shutdown start to impact the Fed?
"A more amicable resolution [to the government shutdown] will take time (apparently more than 32 days) and at this point, be followed by a period of assessing how much actual damage has been done to the real economy.
"A traditional interpretation of events would suggest that since it’s ‘only temporary’ and the data will ultimately be released, the government closure doesn’t matter for the economy or monetary policy.
"That logic holds for a couple weeks around the holidays, but what about a couple months?
"Data collection becomes an issue at some point (i.e. now) and while reconstructing some series is feasible, the estimates needed for others might prove so cumbersome the eventual deluge of releases is made irrelevant. The passage of time will do the same; after all if reports are not back to ‘reliable’ until Mar/Apr, the Jan prints are effectively useless. Said differently, Powell may soon face the unenviable search for the ‘Lost Data of Pause-lantis.'"
December was a rough month for housing, writes the Wall Street Journal's Justin Lahart, looking at the 6.4% drop in existing home sales, and a January bounce may not happen.
Go deeper: "The drop in home sales came despite a decline in mortgage rates," he writes.
The shutdown is also likely to make things worse in coming months.
On the other hand: Bank of America economist Michelle Meyer disagrees, writing in a note on Tuesday: “Don’t believe the narratives of a housing collapse."
Days without a factual error: 8