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Dec 10, 2018

IMF I News: IMF Executive Board Completes the Third Review under the Extended IMF I News:Credit Facility Arrangement and Approves the Fourth US$34.9 Million Disbursement to Togo

December 10, 2018

  • Togo’s program aims to reinforce fiscal and financial stability and promote inclusive growth.
  • Program implementation under the ECF arrangement has been satisfactory.
On December 10, 2018, the Executive Board of the International Monetary Fund (IMF) completed the third review of Togo’s performance under the program supported by an Extended Credit Facility (ECF). Program performance has been satisfactory. All quantitative performance criteria and three out of five structural benchmarks were met. The completion of the review enables the disbursement of SDR25.17 million (about US$34.9 million), bringing total disbursements since the beginning of the arrangement to SDR100.68 million (about US$139.5 million).
Togo’s three-year arrangement was approved on May 5, 2017 (see Press Release No. 17/151) for SDR176.16 million (120 percent of quota or about US$241.5 million at the time of approval of the arrangement) to support the country’s economic and financial reforms. The program aims to reduce the overall fiscal deficit substantially to ensure long-term debt and external sustainability; refocus policies on inclusive growth through targeted social spending and sustainably-financed infrastructure spending; and resolve the financial weaknesses in the two public banks.
Following the Executive Board’s discussion on Togo, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:
“Togo’s performance under the ECF-supported program has been satisfactory despite a challenging environment. The economy shows signs of incipient stabilization, growth is projected to accelerate, and inflation remains within the WAEMU criteria. Meanwhile, the structural reform agenda is advancing. With risks abating but still on the downside, it is important that the authorities remain committed to their macroeconomic adjustment and reform agenda.
“The authorities are determined to reduce public debt to sustainable levels and advance fiscal reforms. The fiscal framework is expected to achieve the debt reduction envisaged initially under the program, and Togo is projected to comply with the WAEMU convergence criteria by end-2019. The authorities are planning to pursue a debt reprofiling operation with appropriate safeguards, aimed at reducing the present value of total public debt.
“Ongoing fiscal reforms aim to create space for much-needed social and infrastructure spending. The authorities are making efforts to improve revenue mobilization in a permanent way, shift the composition of spending in favor of growth-supporting public investment, and enhance the efficiency of overall spending. Further progress is needed to finalize the cost-benefit analysis of public investment projects and strengthen arrears management.
“The authorities have revisited their financial sector strategy and have re-launched the privatization of the two remaining public banks. Implementation of the agreed safeguard measures will be important to ensure that the privatization is in line with international best practices.
“Efforts are underway to implement measures under the National Development Plan and the Compact with Africa, with a view to promoting Togo as a major logistical hub, a dynamic financial center, and a strong manufacturing base. To this end, priorities include fighting corruption, strengthening governance, and improving the business climate more broadly.”
IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Gediminas Vilkas
Phone: +1 202 623-7100Email: MEDIA@IMF.org

Source: IMF

FTC I Press Release: FTC Proposes Amendments to Improve Usability of the Energy Labeling Rule

The proposed amendments would organize the Rule’s product descriptions to make it easier for stakeholders to identify relevant covered products, particularly for categories (such as lighting) that contain several different product types and exemptions. Next, the amendments would divide the Rule’s primary labeling provision into several sections to make it easier to identify the labeling requirements for specific products. Finally, the proposed changes would remove obsolete, unneeded references to products last produced and sold decades ago.
The FTC first issued the Rule in 1979, under the Energy Policy and Conservation Act of 1975. The Rule requires energy labeling for major home appliances and other consumer products to help consumers compare the energy costs of competing models. It also contains labeling requirements for refrigerators, refrigerator-freezers, freezers, dishwashers, water heaters, clothes washers, room air conditioners, furnaces, central air conditioners, heat pumps, plumbing products, lighting products, ceiling fans, and televisions.
The Rule requires manufacturers to attach yellow EnergyGuide labels to many of the covered products and prohibits retailers from removing these labels or making them unreadable. It also directs sellers, including retailers, to post label information on websites and in paper catalogs from which consumers can order products.
The proposed amendments have no substantive impact on the Rule’s requirements, but will improve its organization, eliminate obsolete provisions, and generally make it easier to use.
The Commission vote authorizing publication of the notice of proposed rulemaking in the Federal Register was 4-1, with Commissioner Christine S. Wilson dissenting and issuing a dissenting statement. Comments must be received within 60 days after publication in the Federal Register. Instructions on submitting public comments can be found in the “Supplementary Information” of the notice. Comments also can be filed electronically. (The staff contact is Hampton Newsome, Bureau of Consumer Protection, 202-326-2889.)
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

Source: FTC

FTC I Press Release: Defendant in Fraudulent Business Coaching Scheme Settles with FTC


One of the defendants involved in MOBE, a massive internet marketing and business coaching scheme alleged to have bilked hundreds of millions of dollars from consumers worldwide, has agreed to settle with the Federal Trade Commission.
In June 2018, the FTC charged the MOBE enterprise and three individuals with orchestrating the “My Online Business Education” program in violation of the FTC Act. According to the complaint, the defendants falsely claimed that their business education program would enable people to start their own online businesses and earn substantial income. Touting a “proven” 21-step system, the defendants preyed on U.S. consumers—including service members, veterans, and older adults—through online ads, social media, direct mailers, and live events held throughout the country, according to the FTC. The complaint further alleged that the MOBE defendants made false or misleading refund guarantees to consumers.
The settling defendant in this case, Susan Zanghi, allegedly helped operate and perform acts crucial to the MOBE enterprise, including opening up bank accounts and merchant accounts in the United States. Under the settlement order, Zanghi is permanently banned from selling or marketing business coaching or investment opportunities. In addition, she is prohibited from making or assisting in the making of any misrepresentations about any product or service.
The settlement order also requires Zanghi to turn over $33,400 in frozen assets under her name and to immediately surrender to the FTC all control over funds held in the name of the MOBE corporate entities.
The Commission vote approving the settlement order against Zanghi was 5-0. The U.S. District Court for the Middle District of Florida entered the order on Dec. 6, 2018. (FTC File No. P063000; the staff contact is Sung W. Kim, Bureau of Consumer Protection, 202-326-2211.)
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

SEC | Press Release: SEC Charges Agria Corporation and Executive Chairman With Fraud



Washington D.C., Dec. 10, 2018 —
A multinational agricultural company has agreed to pay $3 million to settle charges that it concealed substantial losses from investors through fraudulent accounting in connection with its divestiture of its primary operating entity.  In a related action, the company’s executive chairman Lai Guanglin (aka Alan Lai) settled charges that he manipulated the company’s share price. 
As described in the SEC’s order, Agria Corporation sold its Chinese operating company in return for stock and land use rights to 13,500 acres of undeveloped land in a remote, mountainous area of China’s Shanxi Province.  The SEC order found that Agria overstated the value of the stock it received by $17 million and assigned a value of nearly $60 million to the effectively worthless land use rights.  A separate SEC order found that in March 2013, Lai used nominee brokerage accounts to engage in manipulative trading in Agria’s American Depository Shares in order to inflate their price above $1 and prevent the securities from being delisted by the New York Stock Exchange. 
“Agria’s fraudulent accounting hid from investors the significant loss it sustained when it divested its principal operation in China, and Mr. Lai artificially inflated the share price to maintain Agria’s NYSE listing,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit.  “Disclosure of accurate information is vital to the integrity of our markets, and both Agria and Mr. Lai have been appropriately held to account for their deceptive misconduct.”
The SEC’s order found that Agria violated antifraud, reporting, books and records and internal accounting control provisions of the federal securities laws.  Without admitting or denying the findings, Agria agreed to pay a $3 million penalty and cooperate with the Commission’s staff in future investigations.  The SEC’s order as to Lai found that he violated antifraud provisions of the federal securities laws.  Without admitting or denying the findings, Lai agreed to pay a $400,000 penalty and be barred for a period of five years from acting as an officer or director of any public company.
The SEC’s investigation was conducted by David Kagan-Kans, Michael Catoe, M. Shahriar Masud, and Kristen Dieter, and supervised by Robert I. Dodge.  The SEC appreciates the assistance of the New York Stock Exchange Regulation and the Financial Industry Regulatory Authority.

Source:SEC

SEC | Press Release:Three Broker-Dealers to Pay More Than $6 Million in Penalties for Providing Deficient Blue Sheet Data



Washington D.C., Dec. 10, 2018 —
The Securities and Exchange Commission today announced that three broker-dealers have agreed to pay more than $6 million to settle charges for providing the SEC with incomplete and inaccurate securities trading information in required SEC productions known as “blue sheet data,” which the SEC uses to carry out its enforcement and regulatory obligations, including the investigation of insider trading and other fraudulent activity.
According to the SEC’s orders, over a period of several years, Citadel Securities LLC, Natixis Securities Americas LLC, and MUFG Securities Americas Inc. each made numerous deficient blue sheet submissions containing inaccurate or missing data; incorrect order execution times that failed to adjust for time zone changes; and incorrect or missing exchange codes, transaction type identifiers, opposing broker number and contra-party identifiers.  Citadel, the largest provider of blue sheet data of the firms charged today, submitted incorrect data for nearly 80 million trades while Natixis and MUFG submitted incorrect data for approximately 150,000 trades and 650,000 trades, respectively.  These deficiencies largely stemmed from undetected coding errors.  None of the firms had adequate processes designed to validate the accuracy of its submissions.  
“We routinely use blue sheet data to detect wrongdoing and protect Main Street investors through our enforcement efforts,” said Kelly Gibson, Associate Regional Director of the SEC’s Philadelphia Regional Office.  “Firms must be diligent and take seriously their obligations to provide accurate and complete data in response to our requests.”
The orders further found that each of the firms has engaged in remedial efforts to address the causes for its deficient submissions, including the retention of an outside consultant and the adoption of new policies and procedures for processing blue sheet requests.
The SEC’s orders also found that Citadel, Natixis, and MUFG willfully violated the broker-dealer books and records and reporting provisions.  The firms admitted the findings in the SEC’s cease and desist orders and agreed to be censured and to pay penalties of $3.5 million for Citadel, $1.25 million for Natixis, and $1.4 million for MUFG.
The SEC’s investigations of Citadel and Natixis were conducted by Lawrence D. Parrish, Paulina L. Jerez, and Kingdon Kase of the Philadelphia Regional Office and Daniel L. Koster of the Complex Financial Instruments Unit.  The SEC’s investigation of MUFG was conducted by Han Nguyen, Rachael Clarke, and Scott A. Thompson of the Market Abuse Unit.  The investigations were supervised by Kelly L. Gibson and Joseph G. Sansone.  The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

Source: SEC

EU FX I Currencies: Sterling tumbles on Brexit worries; dollar rebounds



The pound slid to its weakest level in 1-1/2 years against the dollar on Monday as British Prime Minister Theresa May postponed a parliamentary vote on her Brexit deal, rekindling doubts about U.K.'s departure from the European Union in March.
The greenback enjoyed a mild recovery following its steepest weekly drop versus a basket of currencies in three months last week, as traders reduced their expectations that the Federal Reserve might pause its interest rate hikes sooner than previously thought.
"It's definitely weakening the pound," said Chuck Tomes, associate portfolio manager at Manulife Asset Management in Boston. "It's casting more uncertainty about a Brexit vote."
The U.K. parlimentary vote for May's Brexit proposal was set for Tuesday. Opponents and supporters of Brexit joined in opposition to her deal. At 2:44 p.m. ET, the sterling was down 1.3 percent at $1.2559.
The greenback strengthened versus a basket of currencies that includes the euro as traders trimmed their earlier bets on a less aggressive Federal Reserve.
Widening interest rate differentials between the United States and the rest of the world, driven by a confident U.S. Federal Reserve, has fueled an unlikely dollar rally this year.
However, weak data in recent weeks has clouded the currency's prospects for next year. "You are getting a bit of reprieve from a very dovish view for the Fed in the next 12 months," Tomes said.
The futures market implied traders expected the U.S. central bank to raise key lending rates by a quarter point at its Dec. 18-19 meeting to 2.25-2.50 percent, marking its fourth rate hike in 2018.
They now saw no more than one rate increase in 2019, down from two a month ago, according to CME Group's FedWatch program. An index that tracks the dollar versus a group of six currencies was up 0.31 percent at 96.81 after falling 0.78 percent last week.

Source: CNBC

Bond Yields at Close Report: US Treasury yield curve flattens further on fears of slowing growth, deflation

Thomas Franck



U.S. government debt yields fell on Monday while the so-called yield curve continued to flatten amid projections of slowing economic growth and weaker inflation.
Portions of the yield curve, which first inverted earlier this month, remained downward sloping Monday with short-term 2-year Treasury note yields above 5-year Treasury note yields. At 11:58 a.m. ET, the yield on the benchmark 10-year Treasury note fell to around 2.849 percent, the 16th time in the past 18 trading sessions the benchmark rate has declined.
The 2-year note yield was last seen at 2.705 percent while the 5-year note yield slipped to 2.694 percent. The closely followed spread between the 2-year Treasury note yield and the 10-year Treasury note yield remains positive, though flattening at around 13 basis points. Yields fall when bond prices rise.
Investors are increasingly concerned about a possible economic slowdown, shortly after the U.S., China and Japan all reported weaker-than-expected economic data. It comes after Wall Street’s main indexes closed more than 2 percent lower on Friday, registering their largest weekly percentage declines since March.
Short-term yields have been anchored in place in recent months as Federal Reserve Chair Jerome Powell led his colleagues in three increases to the overnight lending rate and, until recently, suggested that the central bank could continue to hike the overnight rate multiple times in 2019.

U.S. Markets Overview: Treasurys chart

TICKER COMPANY YIELD CHANGE %CHANGE
US 3-MOU.S. 3 Month Treasury2.386-0.010.00
US 1-YRU.S. 1 Year Treasury2.6890.0060.00
US 2-YRU.S. 2 Year Treasury2.7330.0220.00
US 5-YRU.S. 5 Year Treasury2.7160.020.00
US 10-YRU.S. 10 Year Treasury2.8590.0090.00
US 30-YRU.S. 30 Year Treasury3.132-0.0110.00
However, the recent stock sell-off, paired with worries about global growth and lackluster inflation, have spelled tighter financial conditions and softer monetary policy forecasts. Yields of all maturities have fallen in recent weeks, though inflation-sensitive long-term rates have shouldered the brunt of the yield contraction as more investors start to readjust GDP forecasts.
Just nine days ahead of the December Federal Open Market Committee meeting, famed hedge fund manager Paul Tudor Jones told CNBC that current conditions will stand in the way of more rate hikes next year after a fourth and final increase later this month.
“The one thing I would say is there’s a high probability that this hike, assuming they hike, will be the last one for a long time,” Jones told CNBC’s Andrew Ross Sorkin during a “Squawk Box” interview.
Using the Goldman Sachs commodity index as a baseline, Jones said prices are down 15 percent over the past 40 days. That gives the Fed no impulse to rate rates, he added.
“Never in the history of the Fed have we had that kind of deflationary impulse eight days before a hike,” he said.
The difference between the 5-year Treasury inflation-protected securities, or TIPS, and the corresponding Treasurys hit 1.72 percentage points last Tuesday. That spread is a practical look at the market’s projection of where inflation is heading, and is down from highs over 2 percent in October.
— CNBC’s Jeff Cox and Sam Meredith contributed reporting.

Crude Oil At Close Report: US crude falls 3.1 percent, settling at $51, erases gains on OPEC deal

Tom DiChristopher




GP: Oil workers Noble Energy 100729
Diego J. Robles | The Denver Post | Getty Images
Oil prices fell 3 percent on Monday, echoing the weakness in global stock markets as the focus returned to demand growth concerns. Crude prices erased the gains they made on Friday following an OPEC-led decision to cut output.
Losses in Europe and Asia extended to Wall Street on new signs the U.S.-China trade spat was impacting world economic growth.
The market was also weighed down by confusion stemming from British Prime Minister Theresa May’s postponement of a parliamentary vote on her Brexit deal and sluggish data from the world’s largest economies including the U.S, China, Japan and Germany in recent days.
“The stock market and oil market correlation is back on today,” said John Kilduff, a partner at Again Capital Management in New York. “These worries about the global economy and the demand outlook that follows on that for oil are a bigger and bigger negative for the market.”
U.S. West Texas Intermediate crude ended Monday’s session down $1.61, or 3.1 percent, at $51 a barrel. International Brent crude oil futures fell $1.68, or 2.7 percent, to $59.99 a barrel by 2:20 p.m. ET.
Prices rose on Friday after OPEC and some non-OPEC producers including heavyweight Russia said they would cut oil supply by 1.2 million barrels per day.
“Friday’s agreement was a seemingly good one, or maybe we should say the best one under the current circumstances,” Tamas Varga, a strategist with PVM Oil Associates, said.
“As good as it looks, our view is that it will not be able to provide long-term price supports because it could not help global oil inventories deplete.”
Global equities have fallen by nearly 8 percent so far this year, battered by concern about slowing corporate earnings and the threat to the broader economy from an escalating trade dispute between the United States and China.
A steep increase in the pace of crude supply growth this year, especially in the world’s three largest producers — the United States, Saudi Arabia and Russia — has made a number of analysts wary about the prospect of demand being sufficient to mop up extra oil.
“The surge in U.S. supply in recent months should be a reason for caution,” Bank of America Merrill Lynch said in a note on Monday.
U.S. bank Morgan Stanley said the cut was “likely sufficient to balance the market in 1H19 and prevent inventories from building.”
Not all analysts were so confident.
Edward Bell of Emirates NBD bank said “the scale of the cuts ... isn’t enough to push the market back into deficit” and that he expected “a market surplus of around 1.2 million bpd in Q1 with the new production levels.”
Conflicting demand signals
Oil prices have fallen sharply since October on signs of an economic slowdown, with Brent losing almost 30 percent in value.
Japan, the world’s No.4 oil consumer, on Monday revised its third quarter GDP growth down to an annualised rate of minus 2.5 percent, down from the initial estimate of minus 1.2 percent.
Meanwhile, the two world’s biggest economies — the United States and China — are locked in a trade war which is threatening to slow global growth and battering investor sentiment.
Despite the expectations of a slowdown, demand on the ground remains healthy.
China, the world’s biggest oil importer, over the weekend reported November crude imports rose 8.5 percent from a year ago, to 10.43 million bpd, marking the first time China imported more than 10 million bpd. That leaves the world’s second-biggest economy on track to set yet another annual import record.
Demand is driven by Chinese purchases for strategic reserves, but also by new refineries, triggering excess supply of fuels, filling up storage tanks and eroding refinery profits across Asia.
— CNBC’s Tom DiChristopher contributed to this report.

Source:  CNBC

Gold Price at Close Report: Gold eases from 5-month peak as dollar firms

Tom DiChristopher



Reusable Gold bullion american eagle
Gold will continue to shine amid a weak dollar, says author and gold pro Jim Rickards.
Simon Dawson | Bloomberg | Getty Images
Gold edged lower on Monday as the dollar firmed, but stock market volatility and chances of a slower pace of U.S. interest rate hikes in 2019 kept bullion close to a 5-month peak scaled earlier in the session.
Spot gold was down 0.4 percent at $1,242.82 per ounce at 2:54 p.m. EST, having touched $1,250.55, its highest since July 11. U.S. gold futures for February delivery settled at $1,249.40 per ounce, down $3.20.
“Yields are correcting a bit higher in the front end and the dollar is drifting higher. So in the absence of significant buying, gold is coming off,” said Tai Wong, head of metals derivatives trading at BMO.
The dollar rebounded after posting its biggest weekly drop in more than three months last week as weak U.S. data reduced expectations of more U.S. interest rate increases.
The U.S. Federal Reserve is widely expected to raise rates at its Dec. 18-19 meeting, but the focus will be on how many hikes will follow in 2019.
Gold tends to gain when rate hike expectations recede as lower rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced.
Meanwhile, losses on global stocks snowballed on Monday as fresh signs emerged that the U.S.-China trade spat was taking a deeper toll on world economic growth.
“It’s really encouraging that gold has risen to the $1,250 level at the same time when equities were soft and this really underpins gold’s role as a safe haven,” said Julius Baer analyst Carsten Menke.
Gold rose more than 2 percent last week, its best performance since the week of March 23 and has recovered about 8 percent from a 19-month low of $1,159.96 in mid-August.
“With gold prices trading above the $1,240 per ounce resistance, we think that this breakout could have staying power,” analysts at TD Securities wrote in a note.
“A change in tone by the Fed, combined with continued deterioration in sentiment with regards to U.S. growth that could continue to weigh on the dollar, should see the yellow metal supported.”
Reflecting investor interest in bullion, holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.20 percent to 759.73 tonnes on Friday.

Source: CNBC

Wall Street at Close Report: Dow erases 500-point drop and closes higher in another wild session on Wall Street

Fred Imbert




Stocks rose on Monday, erasing sharp losses from earlier in the day, as shares of technology companies posted strong rebounds across the board.
The Dow Jones Industrial Average traded 100 points higher, erasing a 507-point drop. The S&P 500 rose 0.5 percent while the tech-heavy Nasdaq Composite jumped 1.1 percent.
Facebook shares rose 4 percent while Amazon, Netflix and Alphabet all rose more than 1 percent. Apple, meanwhile, erased a more than 2 percent pull back to trade 0.5 percent higher.
Shares of Apple initially fell after a Chinese court granted Qualcomm an injunction against the iPhone maker. It is unclear how the injunction will impact Apple's sales in China, however. Qualcomm says the order bans Apple iPhone imports and sales in China. Apple, meanwhile, says it only impacts sales of phones running an older operating system.
At its lows of the day, the S&P 500 had dipped below its low reached in October during the previous vicious market sell-off. These technical breakdowns typically lead to more selling as many computer programs are set to dump stocks on those levels.
S&P 500 since late October

Source: FactSet
Traders pointed to a number of reasons for the initial selling, including a flattening yield curve and a delayed Brexit vote in the United Kingdom. Stocks fell to their lows of the day after UK Prime Minister Theresa May announced the delay of a key Brexit vote in the country's parliament. Originally, it was scheduled to be held Tuesday.
Meanwhile, the spread between the short-term 2-year Treasury note yield and its 10-year counterpart further narrowed, potentially signaling an economic slowdown is ahead. Last week, the 3-year Treasury note yield broke above the 5-year rate. This "yield-curve inversion" stoked fears that a recession could be on its way.
But strategists at MRB Partners think investors might be overreacting to the moves in Treasury yields. "Markets are now discounting greater weakness than we expect next year," they said in a note. "Our neutral stance on equities and underweight on fixed income corresponds with our expectation that stocks will outperform bonds in the year ahead, albeit in choppy fashion."
Monday's moves come after a volatile week for investors. The Dow, S&P 500 and Nasdaq Composite all posted their worst weekly performances since March last week, falling more than 4 percent each, as worries and confusion about the ongoing U.S.-China trade war and fears of an economic slowdown gripped Wall Street.
A trader on the floor of the New York Stock Exchange.
Getty Images
A trader on the floor of the New York Stock Exchange.
"The volatility continues," said Mark Newton, managing member at Newton Advisors, in a note to clients. "Stocks reversed the prior week's rally violently over the last few days, and now have reached the bottom of the recent trading consolidation that's been in place for the past few months."
"Seeing a larger breakdown in the indices at this point would confirm that stocks have definitely started a larger correction that should eventually lead to a bear market," he said.
Worries over the ongoing U.S.-China trade relation also weighed on market sentiment. On Sunday, China summoned the U.S. ambassador to Beijing to protest Huawei CFO Meng Wanzhou's detention. Reuters reported, citing the state-run Xinhua News Agency, that Chinese Vice Foreign Minister Le Yucheng called Meng's arrest "extremely egregious."
News of Meng's arrest broke last week and is reportedly related to possible violations of U.S. sanctions. The arrest is seen as a potential deterrent to the U.S. and China reaching a permanent deal on trade. Huawei is one of the largest tech companies in China and is seen as symbol of pride by the Chinese government. Meng is scheduled to appear at a bail hearing in Canada later on Monday.
The Cboe Volatility Index (VIX), which is considered to be the best gauge of fear on Wall Street, rose to trade at 23.35.
"The VIX has now sustained over 15 and an average above 20 since Oct. 8 as uncertainty is coming from multiple fronts," including the trade war, Meng's arrest, Brexit and interest rates, said Jeff Chang, managing director at Cboe Vest. "If any one of these events were to breakdown further, we could very easily the VIX to be well above the 25 levels we have seen recently."

Source: CNBC

European Markets at Close Report: European markets close nearly 2% lower and sterling slips to 21-month low as UK pulls Brexit vote

David Reid,Sam Meredith



European stocks slipped on Monday afternoon, falling on worries over slowing economic growth and after a Brexit vote in U.K. parliament was been delayed by Prime Minister Theresa May.

European Markets: FTSE, GDAXI, FCHI, IBEX

TICKER COMPANY NAME PRICE CHANGE %CHANGE VOLUME
FTSEFTSE 100FTSE6733.80-44.31-0.65532185755
DAXDAXDAX10607.49-180.60-1.6771400838
CACCACCAC4742.00-71.13-1.4863084200
The pan-European Stoxx 600 was down around 1.6 percent during afternoon deals, with almost all sectors and major bourses in negative territory.
Britain’s FTSE 100 index slipped, down 0.4 percent, after May confirmed to the parliament that the crucial Brexit vote will be pulled.
Meanwhile, sterling slipped to one-and-a-half year lows on the news. The U.K. currency was trading at around 1.2548 against the dollar at around 4:00 p.m. London time.
Europe’s chemicals stocks led the losses Monday afternoon, down over 1.5 percent. Germany’s BASF SE was the worst sectoral performer, slipping nearly 5 percent after the company slashed its forecast for profits in 2018 late last week.
Autos stock — seen as a trade war proxy because of its export-heavy constituents — were also trading more than 1.5 percent lower amid elevated trade tensions. Fiat Chrysler slipped almost 3 percent Monday lunchtime.
Looking at individual stocks, Air France KLM rose toward the top of the European benchmark during early afternoon deals. It comes after the airline reported better-than-expected traffic figures for November, prompting shares to rise over 1.6 percent. However, the Paris-listed company is still down around 30 percent year-to-date.
Brexit vote
Lawmakers in Britain are currently scheduled to vote on U.K. Prime Minister Theresa May’s Brexit deal on Tuesday. However, any delay would be seen as an attempt by the government to return to the negotiating table with the European Union and seek terms more amenable to U.K. lawmakers.
The climb-down will be seen as a failure on the government’s part to persuade enough lawmakers that the draft Brexit deal with Brussels is the best possible arrangement.
Elsewhere, investors are increasingly concerned about a possible economic slowdown, shortly after the U.S., China and Japan all reported weaker-than-expected economic data.
It comes at a time when traders are also closely monitoring trade negotiations between Washington and Beijing. U.S. Trade Representative Robert Lighthizer said Sunday that talks between the two sides must reach a successful end by March 1, following conflicting comments about whether a hard deadline had been agreed.
Global equity markets were already reeling on news that Canadian officials had arrested the CFO of Chinese telecoms giant Huawei for extradition to the U.S. The arrest has threatened to derail progress in U.S.-Sino trade talks.
In Asia, MSCI’s broadest index of Asia-Pacific shares, excluding Japan, slipped 1.4 percent — falling to a near three-week low.

Theresa May delays parliamentary vote on Brexit deal I Europe I The Washington Post

By William Booth, William Booth London bureau chief 




A person dressed as British Prime Minister Theresa May at a "Brexit Fudge" pop-up shop organized by pro-Europe activists Best for Britain outside the Houses of Parliament in London, Monday Dec. 10, 2018. (Tim Ireland/AP)


Karla Adam
London correspondent covering the United Kingdom
LONDON —  Facing the prospect of a devastating loss in Parliament, British Prime Minister Theresa May announced Monday that she would delay a vote on the Brexit plan she negotiated with the European Union.
“If we went ahead and held the vote tomorrow, the deal would be rejected by a significant margin,” May said. “We will therefore defer the vote scheduled for tomorrow and not proceed to divide the House at this time.”
May will likely go to Brussels this week for a last-ditch attempt to seek new concessions from European Union leaders and write a deal that her own party can support.
But it remains unclear what Europe can offer May to placate her domestic critics. E.U. leaders have never had much patience for Britain’s domestic squabbling, since most view Brexit as an entirely self-inflicted wound.
May’s withdrawal agreement with the European Union had been scheduled for a vote on Tuesday evening in the House of Commons, where political odd-makers predicted ignominious defeat for the prime minister. 
Much of the weekend debate focused on how badly May’s deal would be crushed in Parliament. Nearly 100 members of her Conservative party signaled they would vote against her half-in, half-out version of Brexit.
On the sidelines, Tory leaders jostled for position to replace the prime minister, if she resigned or was booted out in a no-confidence vote.
As late as Monday morning, May’s cabinet ministers assured the public that the vote would not be delayed.
Environment Secretary Michael Gove, a top Brexiteer and possible aspirant for May’s job, told the BBC’s morning news show the vote would go ahead as planned.
Also Monday morning, the European Union’s highest court ruled that Britain could unilaterally reverse its decision to split from the 28-nation political bloc — in a ruling that was expected but also gave a boost to anti-Brexit campaigners.
The decision made clear that Britain has the ability to reverse itself any time before the March 29 deadline to leave the European Union. 
There had been a legal question about whether a reversal would require the consent of the other 27 E.U. members, but the binding decision made clear that little stands in London’s way — should it want to stay in the club.
“The United Kingdom is free to revoke unilaterally the notification of its intention to withdraw from the E.U.,” the European Court of Justice said in its announcement. 
Speculation over Brexit vote delay sent the British pound sterling plummeting to its lowest level in 18 months.
The First Minister of Scotland, Nicola Sturgeon, wrote, “If rumours of a delay are correct, it will be pathetic cowardice by a PM and government that have run out of road and now need to get out of the way.”
Jeremy Corbyn, the leader of the opposition Labour Party, said that the deal was “so disastrous” that the government had “taken the desperate step of delaying its own vote at the eleventh hour.”
Steve Baker, a Tory member of parliament who supports a hard Brexit, said the terms of May’s deal were “so bad that they didn’t dare put it to Parliament for a vote. This isn’t the mark of a stable government or a strong plan.”
European diplomats say they are unwilling to consider any deal that leaves open the possibility of a hard border between Ireland and Northern Ireland. That means that reopening the 585-page withdrawal agreement is probably off the table — even though that is the major source of the British objections.
There is more flexibility to change the non-binding guidelines for the teams that will negotiate Britain and the European Union’s post-Brexit relationship, but since they have no binding legal value, it is unclear whether that would be enough to assuage May’s domestic troubles.
The European inflexibility is the result of a highly successful campaign by Dublin to paint any border with Northern Ireland as a red line. Irish leaders are unwilling to countenance such a change – and the other 26 E.U. leaders are unwilling to side with a departing member of the bloc over Ireland, which is going nowhere.
Diplomats involved in the negotiations acknowledge that both sides’ inflexibility may lead to a chaotic no-deal Brexit, with pain on either side of the English Channel — but they say that giving in to British demands would also damage Europe’s economy.
May’s Brexit deal has been roundly criticized for tying Britain to E.U. rules and regulations for years to come. Hardcore Brexiteers say it turns Britain into a “vassal state,” and “rule taker versus a rule maker,” forever tied to Brussels but with little say. 
May has stressed that her deal does allow Britain to control its own immigration levels, which was a driving force in the Brexit vote in June 2016. But the compromise approach taken by May could limit Britain’s ability to make ambitious free-trade deals outside of the continental bloc, as President Trump recently asserted.
May has conceded to her fellow Tories that her deal is difficult to swallow, especially the promises over how to guarantee there is no return of a hard border — with camera, checks, controls — between Northern Ireland, which remains a part of the United Kingdom, and the Republic of Ireland, which is a member of the European Union.
According to the Telegraph, May will seek a “legally-binding assurance” that in the event of no future trade deal with the European Union, Britain doesn’t not have to remain the E.U. customs union — with all its rules and regulations — indefinitely. The Europeans, however, have stressed they are not willing to yield on this point.
Read more         

Analysis | The Technology 202: Google hearing will be a test of lawmakers' tech knowledge

By Cat Zakrzewski Cat Zakrzewski Technology

Ctrl N




Google chief executive Sundar Pichai speaks at the Google I/O conference in Mountain View, Calif., on May 8. (Jeff Chiu/AP)
Google chief executive Sundar Pichai is in the hot seat on Capitol Hill tomorrow. But it will also be a test for lawmakers.
Previous high-profile hearings with Silicon Valley executives have revealed lawmakers’ own knowledge gaps about how technology services work and make money. Facebook chief executive Mark Zuckerberg’s April testimony, for instance, highlighted how some didn’t have a grasp on how social networks work
As The Washington Post's humor columnist Alexandra Petri wrote at the time:
senator: my aides have given me this complex multi-part question to read to you in a halting and uncertain voice
zuckerberg: oh no don't worry about that, our new motto is 'we fixed it'
senator: that sounds wrong but i don't know what to ask
— Alexandra Petri (@petridishes) April 10, 2018
Tuesday's House Judiciary Committee hearing with Google, under fire from some Republican lawmakers who allege the search engine has anti-conservative bias, may be an even bigger challenge, according to Drew Margolin, a Cornell University professor.
“After Congress struggled to understand how Facebook operated, and thus what its responsibilities ought to be, we should expect even more confusion in testimony from Google,” Margolin, who studies the way people communicate online, said in an email. “Social networks sites are a recent invention, but the basic concept of what they do is intuitive to human beings, whereas search engines are much more complex, which makes their public responsibility much harder to gauge.”
Lawmakers are promising to get tougher on Big Tech, but the gulf of technical knowledge between the Beltway and Silicon Valley may stand in the way. For years, technologists have pointed to what they see as uninformed remarks as a major impediment to engaging with Washington — arguing that politicians may hold back innovation if they attempt to regulate services they don’t understand.
Now that tech leaders are at the table, lawmakers are under more pressure than ever to get up to speed and actually hold them accountable. Especially since lawmakers are promising to tackle a broad swath of tech issues next Congress, including the spread of disinformation campaigns online, election security and consumer privacy. 
The proof will be in the pudding on Tuesday, since some Republicans make serious allegations against Google. Even President Trump tweeted that Google’s search results were “RIGGED, for me & others, so that almost all stories & news is BAD" over the summer. Trump's top economic adviser said the administration was looking into whether the tech titan’s search results should be regulated, stoking concerns on both sides of the aisle -- and in Silicon Valley. 
The company has denied the charges of bias. As my colleague Tony Romm noted, the issue is complex: "Google processes 90 percent of searches globally, and its powerful algorithms return results based on their calculated relevance, a process Google portrays as neutral. Google takes into account signals including a user’s geographic location and browsing history, which is why Trump’s search results look different from what another user might see. Social media platforms differ from a search because information on social media is circulated through friends and brands that users choose to follow." 
Lawmakers will take the opportunity on Tuesday to publicly press Pichai on a host of other tensions, including disinformation, data security and the company’s plans to push into China.
Since the Office of Personnel Management breach was announced in 2015, members of Congress have had to tackle technology issues with increasing frequency, says James Norton, a former Department of Homeland Security official focused on legislative affairs. But he says senior members of Congress on both sides of the aisle aren't owning technology issues. “Members are still pretty unprepared on most of the committees,” Norton said. “We keep seeing the can being kicked.”
But some in the technology industry say Silicon Valley could do more to bridge this gap. Microsoft President Brad Smith is meeting with lawmakers to talk about regulating facial-recognition technology, and he said people in the tech sector make the mistake of underestimating how knowledgeable people in government have become about technology issues.
“If people don’t know everything they need to know, it’s not because they’re not curious, it’s not because they’re not smart,” Smith said. “It’s because nobody shared the information with them. So let’s share the information so we can all talk together with the right comparable level of knowledge.”
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BITS, NIBBLES AND BYTES

Commuters browse on their smartphones as they wait for a train in a subway station in New York on July 1, 2016. (Jewel Samad/AFP/Getty Images)
BITS: Dozens of companies are receiving people's precise location data via apps on their phones, and they’re selling it or using it to gain insights into consumer behavior, according to the New York Times's Jennifer Valentino-DeVries, Natasha Singer, Michael H. Keller and Aaron Krolik. Even though the companies say the location data is anonymous and not tied to a person’s name or phone number, the Times reporters say employees or clients with access to the raw data could still identify a person without their permission. The reporters proved it by tying anonymized location data from a database of more than a million phones to a New York woman without knowing her name.
It’s not a surprise to most consumers that their location data is being collected by services on their phones, but the Times reports “ as smartphones have become ubiquitous and technology more accurate, an industry of snooping on people’s daily habits has spread and grown more intrusive.” From advertisers to hedge funds, many businesses want a piece of the $21 billion location-targeted ad market. The Times found the explanations of how companies use and sell the data are often buried in lengthy privacy policies.
“Location information can reveal some of the most intimate details of a person’s life — whether you’ve visited a psychiatrist, whether you went to an A.A. meeting, who you might date,” Sen. Ron Wyden (D-Ore.) told the Times. Wyden has proposed bills to curb the collection and sale of location data.


Federal Communications Commission Chairman Ajit Pai at a meeting on Dec. 14, 2017, in Washington. (Alex Wong/Getty Images)
NIBBLES: The Justice Department is investigating fake comments about net neutrality that were posted on the Federal Communications Commission's website starting in April 2017, BuzzFeed News reports. Two organizations told BuzzFeed News's Kevin Collier and Jeremy Singer-Vine that they received subpoenas from the FBI. “More than 20 million comments have since appeared on the site, with the New York attorney general’s office estimating that up to 9.5 million of those were filed in people’s names without their consent,” Collier and Singer-Vine wrote.
The Justice Department isn't acting alone — the New York attorney general's office has also been probing the matter. BuzzFeed News also reported that the offices of the attorneys general of Massachusetts and the District are supporting the New York state investigation. The two organizations that received subpoenas from the FBI “had previously been subpoenaed by New York and said the scope of those subpoenas were similar,” according to Collier and Singer-Vine.

People ride Lime shared dockless electric scooters in Los Angeles on Aug. 13. (Mario Tama/Getty Images)
BYTES: The electric-scooter winter is here. Companies Bird and Lime have scaled back their valuation goals as investors' enthusiasm subsides, according to the Wall Street Journal's Eliot Brown, Greg Bensinger and Katie Roof. Bird “is planning to take on more investment at its current $2 billion valuation” and Lime told “investors it expects to raise at a valuation of between $2 billion and $3 billion, below the roughly $4 billion it previously indicated to investors it was seeking,” the Journal reported.
The companies also face additional hurdles such as vandalism as well as competition. “One issue is scooters not designed for heavy use are breaking down quickly,” the Journal reported. “In some markets, scooters last about two months, investors said, often less time than it takes to recoup the purchase cost. Another is vandalism, glorified on social media through video clips of people knocking over rows of scooters or throwing them off parking garages.” Nevertheless, Bird and Lime's “valuations are still lofty—neither company is yet two years old—and the industry has plenty of backers."
PRIVATE CLOUD

Uber chief executive Dara Khosrowshahi in Washington on April 11. (Brendan Smialowski/AFP/Getty Images)
— The race between Uber and Lyft to go public heated up as Uber confidentially filed paperwork with the Securities and Exchange Commission on Thursday for an initial public offering, the New York Times's Mike Isaac, Kate Conger and Erin Griffith reported. Lyft also announced Thursday that it had confidentially filed a draft registration statement with the SEC to go public. “Each company is rushing to beat the other to the public markets in the first half of next year amid a fair climate for technology I.P.O.s and worries of a potential economic recession."
Uber is a larger company than Lyft, but as the Wall Street Journal's Greg Bensinger and Maureen Farrell noted, both firms are unprofitable. “For its presentations to potential investors, Uber is likely to emphasize the success of its side projects such as prepared-food-delivery unit UberEats and trucking business Freight, people familiar with the matter have said,” they wrote. “It operates in about 70 countries world-wide, while Lyft is just in the U.S. and Canada.”

Emily Carden, assistant manager at Peake Releaf cannabis dispensary, stocks the shelves with jars of cannabis on Dec. 6 in Rockville, Md. (Ricky Carioti/The Washington Post)
— Medical cannabis businesses in Maryland seek to navigate the gray areas of Facebook and Instagram's guidelines to avoid losing their accounts. Both platforms allow education and advocacy for marijuana but ban content that promotes marijuana sales, The Washington Post's Steve Thompson reported. “That means no advertising discounts or listing prices, nor mentioning there is product for sale,” my colleague wrote. “The platforms prohibit marijuana dispensaries from providing their phone numbers or street addresses.” Medical cannabis sales started a year ago in Maryland.
Steve found that Instagram shut down five accounts that should have remained online. “The Washington Post sent Instagram 16 accounts created by Maryland cannabis sellers that had been wiped out for supposed violations,” he wrote. “The company responded that 11 had been appropriately removed. But five had been shut down in error, and the company restored them Thursday.”
— A report released by the Virginia Chamber Foundation said the arrival of Amazon's offices in Northern Virginia will result in $15 billion in new economic activity by 2030 in the D.C. area, The Post's Patricia Sullivan reported. The offices in Crystal City — which Amazon chose alongside Long Island City in New York for its new headquarters — will also lead to 62,000 new jobs in the area, according to the report, my colleague noted. The study “said operations of the Amazon offices alone will produce an estimated annual $6.4 billion from 2019 to 2030, supporting an average 27,928 jobs each year in the region,” Patricia wrote. “The total impact, which includes spinoff businesses and those that arise to serve the new employees, will be more than twice that, the report said.” (Amazon founder and chief executive Jeffrey P. Bezos owns The Post.)
— More technology news from the private sector:
Amazon has dismissed several workers in the U.S. and India for allegedly inappropriately accessing internal data that was being misused by disreputable merchants.
The Wall Street Journal
America’s global dominance in technology requires fierce competition at home, not the coddling of monopolies.
The New York Times
Any U.S. actions against Huawei for alleged sanctions violations could devastate the Chinese company’s operations—and curtail business for U.S. tech companies.
The Wall Street Journal
For years, American entrepreneurs saw opportunities in China. But worsening costs, taxation, tech transfer and increased regulations are prompting foreign-owned businesses to throw in the towel.
The Wall Street Journal
Facebook Inc will buy back an additional $9 billion of its shares, as it looks to pacify investors following a slump in its stock.
Reuters
PUBLIC CLOUD

Sen. Mark R. Warner (D-Va.) in Washington on Dec. 6. (Andrew Harrer/Bloomberg)
— Sen. Mark R. Warner (D-Va.), the vice chairman of the Senate Intelligence Committee, warned that Chinese mobile app companies represent a national security threat to the United States, BuzzFeed News's Craig Silverman reported. “Under Chinese law, all Chinese companies are ultimately beholden to the Communist Party, not their board or shareholders, so any Chinese technology company — whether in telecom or mobile apps — should be seen as extensions of the state and a national security risk,” Warner told Silverman.
— More technology news from the public sector:
The Federal Communications Commission (FCC) announced Friday that it will investigate whether major wireless service providers have submitted false data to the agency about their coverage areas, FCC Chairman Ajit Pai said.
The Hill
House Democrats have been backing a revival of the congressional tech consultancy in recent years. Now that they control the House, can the OTA make a comeback?
FCW
EU governments agreed on Friday to toughen up draft rules allowing law enforcement authorities to get electronic evidence directly from tech companies such as Facebook and Google stored in the cloud in another European country.
Reuters
FAST FWD
— More than 100 researchers planning to attend the NeurIPS conference on artificial intelligence or its associated workshops in Montreal were unable to be present because their visa applications were denied or delayed, Wired's Tom Simonite reported“AI researchers say the visa problems undermine efforts to make their field more inclusive, and less likely to produce technology that discriminates or disadvantages people who aren’t white or Western,” Simonite wrote. “Scores of people due to attend or present work at Black in AI, a workshop that took place Friday, were unable to travel to Canada. Many were coming from African countries.”
— More technology news about tech workforce and culture:
There's still a wide gap between talking about change and making it happen.
CNET
RANT AND RAVE

Twitter chief executive Jack Dorsey testifies before the Senate Intelligence Committee in Washington on Sept. 5. (Jose Luis Magana/AP)
— Twitter chief executive Jack Dorsey tweeted that he meditated for 10 days in Myanmar, a country where he said “people are full of joy and the food is amazing.” Then came the backlash. “Critics accused him of being ‘tone-deaf’ and ignoring the plight of the Muslim Rohingya minority,” the Guardian's Alexandra Topping wrote. “700,000 Rohingya refugees fled Myanmar last year, with the country’s military accused of genocide against the ethnic group in Rakhine state in a damning UN report that alleged the army was responsible for war crimes and crimes against humanity against minorities.”
For my birthday this year, I did a 10-day silent vipassana meditation, this time in Pyin Oo Lwin, Myanmar 🇲🇲. We went into silence on the night of my birthday, the 19th. Here’s what I know 👇🏼
— jack (@jack) December 9, 2018
Myanmar is an absolutely beautiful country. The people are full of joy and the food is amazing. I visited the cities of Yangon, Mandalay, and Bagan. We visited and meditated at many monasteries around the country. pic.twitter.com/wMp3cmkfwi
— jack (@jack) December 9, 2018
Topping noted that Andrew Stroehlein, European media director for Human Rights Watch, scolded Dorsey.
I’m no expert on meditation, but is it supposed to make you so self-obsessed that you forget to mention you’re in a country where the military has committed mass killings & mass rape, forcing hundreds of thousands to flee, in one of today’s biggest humanitarian disasters? https://t.co/D7I26CPTQ8
— Andrew Stroehlein (@astroehlein) December 9, 2018
From BuzzFeed News's Joe Bernstein:
Putting aside the, uh, ethnic cleansing, I feel like going on Twitter to brag about your extreme meditation is probably not very good Buddhist practice
— Joe Bernstein (@Bernstein) December 9, 2018
@MENTIONS
— Kim Young-ky, who leads the Samsung unit in charge of 5G equipment, is set to step down as president of Samsung’s networks business and take an adviser role at the firm, according to the Wall Street Journal.
404 ERROR
— News about tech blunders:
Google said Friday an inadvertent bug had made its email filters go haywire, rerouting messages in a way that made users think it had lost its judgment over what messages deserved to land on top of the pile.
Drew Harwell
BURN RATE
— Today in funding news:
Slack Technologies Inc, a provider of chat and direct messaging services for businesses, has hired investment bank Goldman Sachs Group Inc (GS.N) to lead its initial public offering (IPO) next year as an underwriter, people familiar with the matter said.
Reuters
CHECK-INS
Coming soon
WIRED IN
“I do not respect the SEC“: 6 noteworthy moments from Tesla CEO’s ’60 Minutes’ interview.
Officials report Trump was unaware of Huawei arrest:
A look back at John Kelly's relationship with President Trump:

Source:  Correction Previous source mentioned  CNBC, by error.

Analysis | The Finance 202: U.S.-China trade standoff means no reprieve for rattled investors

By Tory Newmyer



THE TICKER

President Trump and Chinese President Xi Jinping pose at the Forbidden City in Beijing last year. (Jim Watson / AFP)
Investors hoping for a reprieve from last week’s trade jitters aren’t likely to get one this week, as developments over the weekend pointed to more bumpiness ahead for U.S.-China trade negotiations. 
President Trump has signaled the two sides will have more than the 90 days to hash out their differences. But his chief negotiator said Sunday the administration will resume raising tariffs if no deal is in place by March. “As far as I'm concerned it's a hard deadline,” U.S. Trade Representative Robert E. Lighthizer said in a rare interview on CBS’s “Face the Nation.”
Offered a chance to reassure markets, Lighthizer (whose name has also surfaced in speculation about who will replace outgoing White House chief of staff John Kelly) instead gave some cold comfort. He said, in essence, the United States will only agree to forgo more tariffs if the Chinese agree to major structural changes in their economic approach. “It is a very important matter, and there’s a long history of having things not work out.”
Stocks are opening the week by continuing last week’s swoon, the worst since March, that ended with the Dow Jones industrial average down on the year. As of 6:30 a.m. this morning, Dow Jones Industrial Average futures dropped 72 points, implying a decline of 48.95 points at the open. Markets in Europe and Asia extended their sell-offs, too.
Trump trade adviser Peter Navarro shrugged off the stock slide, following the president's lead in chalking it up to the Federal Reserve’s interest rate hikes. “We should be optimistic,” about a possible U.S.-China trade deal,” Navarro said on Fox News. “But the markets shouldn’t pin their hopes on that because that’s not what this is all about."

U.S. Trade Representative Robert Lighthizer. (AP Photo/Cliff Owen)
Meanwhile, tensions between the world’s two largest economies continue escalating over the arrest in Canada last week of Meng Wanzhou, chief financial officer of Chinese telecom giant Huawei. Chinese officials summoned Terry Branstad, the U.S. ambassador, on Sunday to demand the United States cancel its arrest warrant for Meng. A day earlier, they summoned the Canadian ambassador and threatened “severe consequences," without naming them, if Canada doesn’t release the executive. Meng's fate in the immediate term could be determined today at a hearing in Vancouver to determine whether she should be released on bail.
Both Lighthizer and Navarro said the administration is treating the arrest as a separate matter from the trade talks (though one told CNN last week it could provide leverage). Yet the White House could face new pressure from Capitol Hill to pursue a broader crackdown on the company: Sen. Marco Rubio (R-Fla.) said Sunday he will introduce legislation banning Huawei — the world’s second-largest cellphone maker, ahead of Apple — from doing business in the United States.
It’s uncertain where the U.S.-China talks go from here. The Wall Street Journal’s Lingling Wei and Bob Davis report before the Huawei arrest became public, Chinese Vice Premier Liu He planned to lead a 30-member delegation to Washington to kick off negotiations this week. There’s no clarity yet on whether that remains the plan. The two sides might opt instead to talk over the phone and email instead of holding formal talks, per Bloomberg’s Shawn Donnan and Jenny Leonard.

In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei Technologies, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver, on Friday. (Jane Wolsak/The Canadian Press via AP)
Trade isn’t the only source of volatility for the stock market. “While the large market swings on trade-related news underscore some investors’ view that a resolution to the impasse between the United States and China will be crucial to the survival of the economic expansion, there are other political and economic risks as well,” The New York Times’s Matt Phillips writes. “They include the fallout from the special counsel’s investigation of Russian interference in the 2016 presidential election, the relentless staff churn in the Trump administration, the efforts to negotiate Britain’s withdrawal from the European Union, and social unrest in France.”
But one JPMorgan Chase analyst estimates that uncertainty arising from Trump’s trade wars has already shaved up to 10 percent off the S&P 500 this year. That, and the market’s new choppiness around the trade talks, might convince Trump to favor a deal over intensifying hostilities. The president, after all, has reveled in stock market milestones as reflections of his own success.
And while he hasn’t tweeted about the market since Nov. 12, he reportedly remains glued to its performance. 
Trump appears to believe his preferred excuse for any sell-offs: It’s the Fed’s fault. “Fresh off what he described as a historic weekend meeting with China’s President Xi Jinping, Mr. Trump has questioned why the markets weren’t reacting more positively to the news of the potential breakthrough with Beijing,” the Journal’s Vivian Salama reported Friday. “In consulting with advisers, he remained convinced that the volatility wasn’t his own doing, but rather, the product of the Federal Reserve’s plan to raise the benchmark interest rate.”
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MARKET MOVERS

Traders work on the floor of the New York Stock Exchange on Friday. (Michael Nagle/Bloomberg)
— Goldman: If shoppers keep shopping, the economy will be fine. CNBC's Javier E. David: "For a market that's become increasingly jittery over the U.S. economy, Goldman Sachs has a message: All is not lost. Wall Street's head-spinning volatility, which last week shaved more than 1,000 points off the Dow Jones Industrial Average, has pushed stocks into correction territory and raised fears for 2019. Although falling stocks and rising interest rates will continue to weigh on sentiment, those negatives are likely to be offset by higher wages and oil prices in retreat, Goldman said in a research note to clients Saturday. ...
"November's jobs data released on Friday showed lower-than-expected payrolls growth but wages growing at the fastest rate in nearly a decade. ... And with consumer spending — which comprises 2/3rd of the vast U.S. economy — still strong, 'consumer sentiment is likely to stay elevated, reflecting strong underlying economic fundamentals as well as optimism about the labor market and income growth,' the firm said."
More from Goldman: The firm now sees a less-than-50-percent chance of a March rate hike. Bloomberg: "Holding in March would likely coincide with a volatile period for markets as the 90-day trade war truce between the U.S. and China is due to end at the start of that month, Chief Economist Jan Hatzius wrote in a Dec. 9 note... Overall Goldman expects the U.S. economy to grow above trend through most of 2019, unemployment to fall further below the Fed’s estimate of its longer-term level, and wages and prices to gradually move higher -- meaning the Fed will continue to tighten."
Investors aren't buying the dip. WSJ's Akane Otani: "Investors are approaching stock pullbacks with a reluctance last seen at the end of the dot-com era, undermining the 'buy-the-dip' strategy that many say has helped drive the longest bull market in U.S. history. Going back to the 1980s, the S&P 500 has typically rebounded after posting a weekly loss. This year, that trend has broken apart. The broad index has fallen an average of 0.04 percentage points on the day following weekly declines, marking the first time since 2002 that stocks have consistently slipped after one-week pullbacks ... What’s troubling: The only years that stocks haven’t reliably rebounded following dips have been either at the start of or in the middle of a bear market ...  In some years, like 1982, 1990 and 2002, investors were hit by not just a bear market but also a recession."
— May aborts Brexit vote. FT's George Parker, Laura Hughes and Cat Rutter Pooley: "Theresa May has aborted a planned vote on her Brexit deal on Tuesday — according to several people close to cabinet ministers — in a humiliating setback for a prime minister who was facing a heavy defeat in the House of Commons. Downing Street said at 11.15am that the vote was going ahead ‘as planned’ but shortly afterwards Mrs May told her cabinet on a conference call it would be postponed, according to officials briefed on the matter. Number 10 has so far declined to comment…Mrs May is expected to give a statement to the House of Commons at 3.30pm explaining her decision to pull the vote and how she intends to find a way past the political impasse in the coming days."
— Uber, in a race with Lyft, files for an IPO. NYT's Mike Isaac, Kate Conger and Erin Griffith: "Uber confidentially filed paperwork on Thursday to go public ... officially moving toward what is expected to be one of the biggest and most anticipated tech company stock market debuts ever. The ride-hailing company filed its paperwork with the Securities and Exchange Commission on the same day that its rival Lyft also filed for an offering. ... Each company is rushing to beat the other to the public markets in the first half of next year amid a fair climate for technology I.P.O.s and worries of a potential economic recession.
"Uber, the world’s biggest ride-hailing company, has been told by investment bankers that it could be worth as much as $120 billion in an I.P.O. At that valuation, it would be the biggest offering since the Alibaba Group of China began trading on the New York Stock Exchange in 2014. It would dwarf the market capitalization of more established companies such as Goldman Sachs, putting it at around the same value as I.B.M. or McDonald’s. And it would likely bring enormous windfalls for many of its investors, founders and employees."

When it comes to U.S. stocks, 2018’s bears are still skeptical.
Bloomberg

No company wants their proposed deal to become a political football in the 2020 presidential campaign. Plus, it will take some time for capital markets to digest megadeals like AT&T-Time Warner and Disney Fox.
CNBC
TRUMP TRACKER
TRADE FLY-AROUND: 
— Huawei gets key help from Silicon Valley, faces a reckoning in Washington. WSJ's Dan Strumpf: "American companies have been crucial in helping Huawei Technologies Co. become the world’s dominant telecommunications player. Silicon Valley giants from Intel Corp. to Broadcom Inc. and Qualcomm Inc. are top suppliers of Huawei, which buys their components to make equipment such as base stations and routers and Huawei mobile phones.
"By one estimate, Huawei will buy up to $10 billion of components from American companies this year—roughly the value of China’s automobile imports from the U.S.Qualcomm and Intel are also working with Huawei on its development of next-generation 5G technologies, a field in which the Chinese company’s aim to be a global leader has alarmed some in Washington. These interdependencies show how any U.S. actions against Huawei for alleged sanctions violations, which could go as far as a ban on it buying from American suppliers, could devastate Huawei’s operations, and curtail business for U.S. tech companies."

Electronics giant Huawei has cultivated a close relationship with a leading Washington think tank.
Isaac Stone Fish
MELTDOWN WATCH: 
POCKET CHANGE

Carlos Ghosn. (REUTERS/Regis Duvignau)
Ghosn, Nissan indicted in Japan. CNN Business: "Carlos Ghosn and Nissan, the Japanese automaker he saved from collapse, were indicted Monday on allegations of financial misconduct, deepening a crisis that already brought down one of the global car industry's most iconic figures. Tokyo prosecutors said they indicted Ghosn and Nissan for under-reporting his income over a five-year period and are investigating allegations that the practice went on for even longer…
"Former Nissan director Greg Kelly, who was arrested in Tokyo at the same time as Ghosn, was also indicted Monday, prosecutors said. The two men are alleged to have collaborated to under-report Ghosn's income in Nissan's securities filings by about 5 billion yen ($44 million) over a five-year period ending in March 2015, according to prosecutors.”
Generic drug "cartel" probe expands. The Post's Christopher Rowland: "Executives at more than a dozen generic-drug companies had a form of shorthand to describe how they conducted business, insider lingo worked out over steak dinners, cocktail receptions and rounds of golf. The 'sandbox,' according to investigators, was the market for generic prescription drugs, where everyone was expected to play nice... The terminology reflected more than just the clubbiness of a powerful industry, according to authorities and several lawsuits. Officials from multiple states say these practices were central to illegal price-fixing schemes of massive proportion... What started as an antitrust lawsuit brought by states over just two drugs in 2016 has exploded into an investigation of alleged price-fixing involving at least 16 companies and 300 drugs."
— Ford and VW considering an expansive alliance likely to echo across the global auto industry. Paul A. Eisenstein at CNBC: "Barring a last-minute hitch, two of the world's largest automakers plan to announce a far-reaching alliance shortly after the new year, one that will cover a wide swath of territory and a broad range of technologies, new and old. The deal will serve as something of a jointly played jigsaw puzzle, allowing Ford Motor and Volkswagen to leverage their strengths and offset weaknesses at a time when the global automotive industry is facing not only traditional competitive challenges but the risks posed by massive technological transformation. Among the key elements expected to be part of the deal will be a cooperative effort to bring to market electrified and autonomous vehicles, something each of the companies already has spent billions of dollars developing."
— Housing slowdown unnerves those looking to 'fix-and-flip.' WSJ's Ben Eisen: "The pace of real-estate speculation is slowing, a sign of the darkening outlook in the U.S. housing market. Small-time investors who flooded into real estate in the past decade to take advantage of low borrowing costs and rising home values are starting to cut back. The moves indicate that the market’s short-term risk-takers see limited upside — and possible turbulence — ahead. The number of new home loans issued with terms of three years or less, typically used by investors looking to make a quick profit, dropped by 11% in the July-to-September period from a year earlier. It was the smallest amount since the second quarter of 2015."
— Your Apple products are getting more expensive. Here’s how they get away with it. The Post's Geoffrey A. Fowler and Andrew Van Dam: "You can't put a price on loyalty. Just kidding, it's $1,000. Apple this year became a trillion-dollar company. But it also became the thousand-dollar company: Suddenly you need at least 10 Benjamins to get the best new iPhone or the big iPad Pro. Apple has never made cheap stuff. But this fall many of its prices increased 20 percent or more. The MacBook Air went from $1,000 to $1,200. A Mac Mini leaped from $500 to $800. It felt as though the value proposition that has made Apple products no-brainers might unravel. ...
"Being loyal to Apple is getting expensive. Many Apple product prices are rising faster than inflation — faster, even, than the price of prescription drugs or going to college. Yet when Apple offers cheaper options for its most important product, the iPhone, Americans tend to take the more expensive choice. So while Apple isn’t charging all customers more, it’s definitely extracting more money from frequent upgraders."

The government is trying to recoup the many assets of Jho Low, a Malaysian financier at the center of an international fraud case who had very expensive tastes.
NYT
MONEY ON THE HILL
Dems don't trust Trump on shutdown deal. Politico's Burgess Everett and Heather Caygle: "Donald Trump’s meeting Tuesday with Nancy Pelosi and Chuck Schumer may go a long way toward determining whether the government enters a partial shutdown before Christmas. But as Democrats seriously re-engage with Trump for the first time in nearly a year, their broad distrust of the president has expectations for a deal at rock bottom...
"The House and Senate Democratic leaders have been here before. Multiple times over the past two years they thought they'd cut a deal with Trump only to see him swiftly trash 'Chuck and Nancy' and demand hefty conservative concessions. Now Trump is threatening to shut down a large swath of the federal government if he doesn’t get billions in funding for his border wall. But Democrats say they have no reason to think talks this week will end differently than they have in the past."

Preserving the $7,500 tax incentive for buyers is crucial for GM as the company pivots from internal combustion engines in favor of building cars powered by batteries or hydrogen fuel cells. Yet the layoffs and plant closings could imperil GM's push to keep the incentive.
AP
THE REGULATORS
Musk: "I do not respect the SEC."  CNN Business: "Elon Musk settled securities fraud charges brought against him by the Securities and Exchange Commission earlier this year, but he is not done deriding the agency. ‘I want to be clear: I do not respect the SEC,’ he told Lesley Stahl during an interview with CBS' ’60 Minutes,’ which aired Sunday. Musk said he is abiding by the terms of his settlement deal ‘because I respect the justice system.’ But he reiterated that there is no love lost between him and the SEC.
“Musk and Tesla, the electric car company he runs, reached separate $20 million deals with the agency in September to settle securities fraud charges lodged against Musk that stemmed from statements he made on Twitter. As part of the agreement, Tesla said it would firm up its oversight of Musk's social media use by pre-approving posts that may contain information that is ‘material’ to Tesla's shareholders. But Musk, who has long been known for his liberal and informal use of Twitter, told Stahl that no one is proofreading all his posts."
DAYBOOK
Coming soon:
THE FUNNIES
From The New Yorker's Liana Finck:
BULL SESSION
Did you sing 'The Twelve Days of Christmas' correctly this year?
A look back at John Kelly's relationship with President Trump
It's the year of the movie soundtrack at the 2019 Grammys: