Tuesday, November 29, 2016

Today's Headlines

  • Europe Warned It’s on Edge of Abyss Unless Brexit Lessons Heeded. The European Union is at risk of collapse unless it shares out economic wealth more widely and does more to protect workers from the fallout of globalization, according to Social Democrat leaders in Germany, Austria and Sweden. Austrian Chancellor Christian Kern, Swedish Prime Minister Stefan Lofven and German Vice Chancellor Sigmar Gabriel cited the success of right-wing populists as they called on the EU to overhaul its tax, fiscal and labor policies to ensure more people benefit. The U.K.’s vote to leave the bloc and the election of Donald Trump in the U.S. are final warnings of the consequences of ignoring inequalities, Kern said. “The European way will be a dead end” and “the EU is at risk of failure if we don’t establish its legitimacy as a project where not just a few benefit but everybody,” Kern told reporters in Vienna Tuesday after meeting with his fellow party leaders. “After Brexit, after Trump, we’re staring into the abyss and we have to decide now: Do we want to modernize the European project, make it more just and rescue it, or do we risk its existence?”
  • Italy’s Renzi May Resign Even If He Wins Vote, Corriere Says. (video) Prime Minister Matteo Renzi is weighing resignation after the Dec. 4 referendum even if voters pass the constitutional reform he is requesting, Italian newspapers including Corriere della Sera reported on Tuesday, without saying where they got the information. In that case, Renzi would seek re-appointment to form a new government with a broader majority within the current parliament, the newspapers said. Under the plan, the cabinet would be reshuffled and lawmakers would pass a new voting law before general elections next year or in 2018, Milan-based Corriere said.
  • Asia Is About to Face a Significant Dollar Stress Test. A perfect storm of macro and market forces could generate a dollar crunch next year, Deutsche Bank AG analysts warn.
  • Europe Stocks Advance Amid Thin Trading Before OPEC, Italy Vote. (video) A rebound in bank shares helped European stocks recover from their biggest drop in more than three weeks, while trading remained thin before the upcoming OPEC meeting and the Italian referendum. A gauge of banks rose for the first time in five days, with Italy’s UBI Banca SpA and Intesa Sanpaolo SpA among the biggest gainers. Actelion Ltd. jumped 10 percent, reversing earlier losses, after people familiar with the matter said Johnson & Johnson raised its takeover offer for the Swiss drugmaker. Discord among OPEC members before tomorrow’s meeting sent crude prices and energy shares lower, while boosting airlines on bets of cheaper fuel. IAG SA and Air France-KLM rose at least 1.3 percent. The Stoxx Europe 600 Index added 0.3 percent at the close, after swinging between gains and losses at least nine times. The volume of shares changing hands was 16 percent lower than the 30-day average, in keeping with the thin trading seen in recent sessions.
  • Fed’s Powell Says Case for Rate Hike Has ‘Clearly Strengthened’. Federal Reserve Governor Jerome Powell signaled his readiness to raise interest rates, as unemployment and inflation approach the central bank’s goals. “The case for an increase in the federal funds rate has clearly strengthened since our previous meeting earlier this month,” Powell said in the text of a speech he is scheduled to deliver Tuesday in Indianapolis. He was referring to the Nov. 1-2 session of the Federal Open Market Committee. “The committee has been patient about raising rates,” he said. “That patience has paid dividends. But moving too slowly could eventually mean that the committee would have to tighten policy abruptly to avoid overshooting our goals.”
  • Fed’s Dudley Says Puerto Rico Will Regain Access to Bond Market. New York Federal Reserve President William Dudley said heavily indebted Puerto Rico may be able to return to the bond market once it completes a plan to recover from its financial collapse and advised that any borrowing should be “strictly limited.” Dudley, speaking in San Juan, said the commonwealth needs some big reforms to reverse a prolonged economic slump that could "easily be called a depression." Puerto Rico’s economy has shrunk in the past 10 years, fueling excessive government borrowing that’s sent the island over a fiscal cliff and pushed it into federal financial oversight.
Wall Street Journal:
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