Weekend Reading January 12th: Grinding Up, despite all Concerns.

Second week of the year and markets are just going up. Fed minutes from last meeting got released. Showing few members want to continue to raise rates. Fed President Powell held another dovish speech, seemingly reassuring the markets. Trade talks between U.S. and China appear to be making progress. Chinese Vice President Wang is expected to be in DC end of the month. On the other hand, all economic data from China point towards a slowing economy. Growth rates have been adjusted downwards, and Beijing is again resorting to debt fueled stimulus.

On the corporate side, tale of two worlds. Retail got clobbered after Macy’s reported a profit warning. On the other hand, pharma m&a is back with a couple of big deals. Setting the stage for further deals as pharma companies continue to raise prices. On the political side, nothing new under the sun. The dysfunction continued as government shutdown continued.  Resulting to for example JPMorgan lowering Q1 GDP growth from 2.5% to 2.0%. More earnings will be trickling in next week giving a better sense were things stand and directions of the markets.

Economy, Trade & Fed, Macro

More U.S. regions see job openings outnumbering jobless via Reuters

We must prepare now for the likelihood of a recession by FT

Gig Economy Growth Slower Than First Thought, Profs Say via Bloomberg

At Taxpayers’ Expense, Fed Paid Banks $38.5 Billion in Interest on “Reserves” in 2018. Here’s How from Wolf Street 

Fed arguments build for caution on rate rises via FT

China Has a Dangerous Dollar Debt Addiction by Bloomberg

China: Signs of Economy Close Falling off a Cliff. Former chief economist of the Agricultural Bank of China Says “Growth Was Probably Negative”. U.S holds the Key as Leverage Balloons by Ask Brokers

China steps up fiscal spending as it approves $125bn of rail projects via FT

China’s Car Sales Just Fell for First Time in Over 20 Years via Bloomberg

How China’s worsening economic woes are shattering the dreams of its top graduate students from SCMP

US-CHINA TRADE WAR DIVIDES SOUTHEAST ASIA, BELT AND ROAD FEARS UNITE IT: SURVEY via SCMP

ECB considered downgrading economic outlook in December via FT

$1 trillion is leaving Britain because of Brexit via CNN

Dublin remains top ‘Brexodus’ location ahead of Frankfurt and Paris, EY says from The Irish Times

EU’s wilful blindness to sovereign risk adds to eurozone danger by FT

Forgotten France rises up by Le Monde Diplomatique

This is how Canada’s housing correction begins from Maclean’s

Top Risks for 2019 by Eurasia Group

Australia’s house price slide prompts worries about economy  via FT

Markets / Companies

Gamma is King – watch the JPY via Ask Brokers

If This Isn’t a Bear Market, Then What Is It? By Barron’s

Do you believe in Go(l)d or America? By Ask Brokers

Was That The Bottom? From The Irrelevant Investor

The DNA of S&P 500 – Imminent Move Lower? Via Ask Brokers

Triple-B movie: ‘Big Short’ star fears for debt-laden companies By FT

A Junk-Bond Drought Is Making Investors Nervous via WSJ

Return of Mid-Caps? Via Medium

Brexit: Opportunities and Risks. What Companies to Focus on In case of Brexit from Ask Brokers

Computer Models to Investors: Short Everything from WSJ

The Pain Trade is (slowly) Higher by Ask Brokers

Ford to cut thousands of European jobs in savings drive via FT

Amazon’s new ad strategy: Free samples based on what it knows about you via Axios

Amazon will let you stream free movies and TV shows through IMDb by CNBC

Apple: iPhone Prices have gone to The Moon as Sales Stale. Is Price Decreases the Only Option? From Ask Brokers


Retailers are slashing iPhone prices across China as consumers say the phones aren’t worth the cost via CNBC

Facebook is the new crapware via Techcrunch

Vietnam accuses Facebook of breaking cyber security laws by FT

How Facebook Borrows From the NSA Playbook from Reader Supported News

Cristiano Ronaldo: Rape Allegations Gain Additional Fuel – Could this Force Listed Juventus Dump the Player and the Stock to Drop? By Ask Brokers

Pharma: M&A Bonanza to come as Companies Keep Raising Prices? Companies to Keep on the Radar from Ask Brokers

Eli Lilly to buy Loxo Oncology for $8 billion in huge bet on cancer genetics from Statnews

Sanofi and Novo Nordisk press ahead with US insulin prices rises by FT

23ANDME’S PHARMA DEALS HAVE BEEN THE PLAN ALL ALONG via Wired

Macy’s sparks $34bn retail wipeout after guidance cut via FT

GM gives strong 2019 earnings forecast, shares jump 8 percent by Reuters

Slack Plans to Follow Spotify on Unconventional IPO Route from WSJ

Samsung blames China slowdown for profits warning by FT

Chinese tech investors flee Silicon Valley as Trump tightens scrutiny from Reuters

France to put Danske Bank back under investigation from FT

Model Hedge Funds Crushed (again) by Ask Brokers

Bridgewater’s Pure Alpha defies markets with 15% gain via FT Alphaville

Crypto

Bitcoin is Less Secure than Most People Think by Marginal Revolution

New Attack Against Electrum Bitcoin Wallets via Schneier on Security

The Case for a 2020 Bitcoin Bull Run from CoinDesk

The economics of cryptocurrency pump and dump schemes by VoxEU

Research / Interesting Reads

Mueller Needs to Study Art. Could Da Vinci’s Salvator Mundi hold the Key to the Investigation? Via Ask Brokers

I Gave a Bounty Hunter $300. Then He Located Our Phone by Motherboard

IBM unveils first standalone quantum computer from FT

Dividend Investing Is Bizarre by Fat Tailed and Happy

The Chinese technology helping New York police keep a closer eye on the United States’ biggest city by SCMP

Finland’s grand AI experiment via Politico

Surgeon General Believes It’s High Time For Marijuana Reclassification from Forbes

When a town in Arctic Norway transforms into “the world’s northernmost Chinatown by Everyone Artic

Olay walked me through its connected skin products, and now I’m terrified to age via The Verge

Billionaire, Bust And Back: One Of Las Vegas’ Original Moguls Is Winning Big Again by Forbes

Humans Evolved to Exercise from Scientific American

Intellectual humility: the importance of knowing you might be wrong by VOX

Just a few drinks can change how memories are formed via Brown University

Big Dairy Is About to Flood America’s School Lunches With Milk from Bloomberg