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Illustration: Aïda Amer/Axios
The eurozone is an escalating mess and European Central Bank president Mario Draghi is getting out right before the proverbial fit hits the shan.
Driving the news: Draghi delivered his final press conference as head of the ECB on Thursday, keeping rates in the 19-member bloc unchanged following the controversial announcement of an interest rate cut to -0.5% and a $22 billion a month bond-buying program at September's meeting.
What's happening: The manufacturing sector in the euro area shrank for the ninth consecutive month, data showed Thursday, and remains on the brink of an outright contraction. There are growing signs in the bloc’s largest economy, Germany, that the manufacturing slump is starting to take a toll on employment.
What's next: In addition to a looming recession, a divided governing council and a rising wave of opposition toward European unity, the ECB looks to be out of bullets, as even interest rates well below 0 and trillions in bond purchases have failed to accomplish its stated goals.
While almost every major central bank on earth is loosening monetary policy as they attempt to stimulate economic growth, two look to be moving in the opposite direction.
Tesla's stock price rallied nearly 18% on Thursday after a stronger-than-expected earnings report, putting a big dent in the profits of short sellers.
What happened: Tesla's stock has been a tale of two halves. In the first half of the year, short-sellers had nearly recouped the entirety of their losses from the 2016-2018 period when Tesla was one of the market's hottest companies.
Where it stands: Thursday wasn't quite the "short burn of the century" Musk threatened on Twitter was "comin soon" in May 2018, but it was pretty bad.
The pace of wage increases and hiring is slowing, data shows, as the previously red hot U.S. labor market continues to cool.
Why it matters: "Though wage growth remains healthy, the tight labor market continues to pressure wages and fuel growth across nearly all industries, but employers may be losing the capacity to raise paychecks any further."
Of note: The Midwest leads the nation in wage growth at 3.9%, followed by the West (3.2%), Northeast (3.1%), and South (2.9%). The Midwest has led the nation in wage growth for five consecutive months, but their wages are lowest among the regions and employment growth also lags behind that of other regions.
Facebook CEO Mark Zuckerberg's plea to members of Congress Wednesday that they allow the company to develop its Libra digital currency to help the U.S. compete with China in the space was rendered a bit hollow by the fact that the Libra Association will be based in Switzerland.
Congressman Lance Gooden (R-TX) pointed this out during questioning and asked Zuckerberg to relocate the headquarters of his cryptocurrency project to the U.S.
“Mr. Zuckerberg was right to emphasize the importance of innovation for America’s future as an economic and financial leader. Emerging opponents are working diligently to outpace us in this field. Our government should be an enabling factor for the development of new technologies, not a limiting factor.
“Most importantly, I remain convinced the natural home of this project is here in the United States. That’s particularly true if this endeavor is of heightened importance to the future of America’s economic standing in the world, as Mr. Zuckerberg told us during the hearing yesterday.”
Big moves in well-known companies like Tesla, Twitter, JPMorgan Chase and Ford have generated headlines this week but the broader market has been little moved. That's been true for the month, the quarter and the majority of the year.
By the numbers: As of market close Thursday, the S&P has risen 0.8% from its closing level a week ago; is up 1.1% so far in October; and up 2.3% since the end of Q2.
Watch this space: While a number of companies have posted surprise earnings beats, overall earnings now are expected to have declined 2.3% year-over-year in the quarter, according to IBES data from Refinitiv.