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Jan 10, 2019

10-Point I Today's Gude to the WSJ.

Wall Street Journal.

Today's guide to the WSJ
Good Morning. In today’s edition, President Trump walks out on discussions over government funding, U.S. and China make progress in trade talks, stocks enjoy a swift rebound, and more.
Negotiations to end the partial government shutdown broke down Wednesday, increasing the odds that President Trump will declare a national emergency over border security, White House officials say.
  • Mr. Trump walked out of a meeting with top Democratic lawmakers after House Speaker Nancy Pelosi said she wouldn’t budge on funding a border wall. The meeting, which lasted only about 20 minutes, signaled that there was no solution in sight to end the shutdown, now entering its 20th day.
  • Declaring a national emergency could allow the president to use Pentagon funds to pay for construction of a wall or other barrier on the U.S.-Mexico border. However, the money would have to be taken from projects such as military housing that Congress previously authorized.
  • If the White House goes that route, House Democrats have vowed to immediately bring a legal challenge, though Mr. Trump could tell supporters he did everything he could to keep one of his top campaign pledges.
  • The White House is weighing canceling the president’s trip to the annual World Economic Forum—which opens Jan. 22 in Davos, Switzerland—if the shutdown hasn’t been resolved by then.
Follow the story: Subscribe to our Markets, Capital Journal and Real Time Economics newsletters, and visit today for updates.

The number of interest-rate increases Federal Reserve officials penciled in for 2019 at last month’s policy meeting.
Federal Reserve officials signaled they are unlikely to raise interest rates for at least a few months while they assess the impact of recent market volatility on the U.S. economy.
  • Concerns over slowing global growth and trade tensions that roiled markets in the run-up to the meeting made “the extent and timing of further policy firming less clear than earlier,” the minutes of the Fed’s December meeting revealed.
  • A pair of influential Fed officials, who had supported raising rates four times last year, signaled little urgency to lift them again soon even though they still expected the economy to perform well enough this year to eventually justify slightly higher borrowing costs.
  • Fed Chairman Jerome Powell will take questions today during a lunchtime appearance at the Economic Club of Washington, D.C., his second such public interview in the past week. 
U.S.-China trade talks move forward as the world watches and waits.
Many national economies rely on trade with China, particularly in the Asia-Pacific region. Above, Australia's Port of Melbourne. / TRACEY NEARMY/EPA/Shutterstock
Washington and Beijing wrapped up their first face-to-face trade negotiations since a temporary tariff truce was declared in December, making progress toward an agreement but leaving the thorniest issues for higher-level talks.
  • Over three days, midlevel trade officials from the two sides made some headway on matters including additional Chinese purchases of U.S. goods and services, as well as further opening China’s markets to American capital.
  • They remain divided on knottier issues such as a reduction of Chinese subsidies for domestic companies and protection of intellectual property.
  • Countries watching the talks from the sidelines are anxious for the two sides to reach a deal and avert the damage a protracted fight poses to the global economy—even if many see the potential to benefit from the dispute.
From reporters Ben Otto, Chieko Tsuneoka and Kwanwoo Jun:
There are short-term winners from the trade conflict—Southeast Asia is welcoming China-based exporters, soybean farmers in Brazil and Canada stand to sell more to China’s massive hog herds and policy makers in South Korea privately say they support a U.S. push for greater market access and fairer business practices in China. But in the long run, most fear an economic slowdown from a protracted trade fight, and seek stability and freer trade, as with deals like the new TPP-11 trade bloc. With that pact now in force, watch for more nations to seek membership, and for talks to pick up on other major trade alliances. For instance, the U.S. may propose bilateral talks to set up a framework to protect intellectual property in order to seek a soft landing on the U.S.-China trade dispute.,,
U.S. stocks are enjoying their swiftest rebound in nearly a decade. The Dow Jones Industrial Average and S&P 500 have each risen more than 9.5% from Christmas Eve lows, their best 10-day performance since July 2009. The benchmarks climbed for a fourth straight session Wednesday, their longest joint winning streak since mid-September, buoyed by a robust December jobs report and signs of patience from the Fed.
December wasn’t as robust for junk-bond sales: It was the first month since 2008 not to have any, according to Dealogic. If today brings no such deal, it would be the 41st straight day without one—the longest junk-bond drought in data going back to 1995. Volatility in financial markets, uncertainty about the economy and the recent drop in oil prices are discouraging riskier companies from issuing debt and investors from buying it, analysts say.
The world’s wealthiest man and his wife are divorcingAmazon Chief Executive Jeff Bezos and his wife, MacKenzie, are splitting up after 25 years of marriage, a decision that could hold implications for the ownership of the most valuable company in the world.
  • Ms. Bezos, who was instrumental in helping to launch Amazon, could be entitled to half the couple’s wealth depending on where they divorce, attorneys said. If Ms. Bezos ends up with a chunk of Mr. Bezos’ stake, she could influence shareholder votes on resolutions and press for changes.
  • Divorces involving corporate leaders have been known to get messy and sometimes can have a big effect on their companies. Here are some notable separations.
Who foots the bill? Families fight over college debt.
Conflict over college debt is intensifying among American families, say financial advisers, loan officers and school counselors. Tuition increases have outpaced household incomes just as parents are facing a battery of other financial obligations, including supporting their own parents, saving for retirement, health-care costs and sometimes their adult children’s living expenses. The consequences: tears, recriminations and blame.
What Were Following
Rosenstein’s Exit: Deputy Attorney General Rod Rosenstein plans to leave the job in coming weeks, raising the stakes for the confirmation process of President Trump’s attorney general nominee, William Barr.
Citizens Detained: Paul Whelan, the U.S. citizen detained by Russian authorities and charged with espionage, could remain in custody for six months or more as the investigation into his case continues. Separately, Iran said it has arrested a U.S. Navy veteran on charges it didn’t disclose.
Cartel Crackdown: A fuel crisis is mounting in Mexico after the government closed several key fuel pipelines to prevent theft by organized crime groups. Meanwhile, the trial of infamous Mexican drug lord Joaquín “El Chapo” Guzmán is giving the public an unprecedented look inside the operations of the Sinaloa cartel.
Congo Surprise: The Democratic Republic of Congo’s electoral commission declared opposition leader Felix Tshisekedi the winner of the country’s presidential election, contradicting an unofficial tally by the largest observer mission.
Trending Stories at
President Trump threatened to halt the flow of federal emergency relief funds to California unless officials there “get their act together” to prevent forest fires that have ravaged the state in recent months. (Read)
Ford has begun talks with trade unions in Europe about job cuts that could run into the thousands as the auto maker shuts plants there and cancels production of unprofitable models. (Read)
Trend-following investment strategies—a computer-based way of trading that has become a major force in some markets—have gone from bullish to bearish to a degree not seen in a decade. (Read)
Faced with high costs and stiff competition from new towers, the owners of New York City’s Chrysler Building are looking to sell the 1930 art deco icon. (Read)
Samsung plans to show a fully functional foldable-screen handset at Feb. 20 events in San Francisco and London. (Read)
What Else Were Reading
Fiat Chrysler has agreed to pay nearly $650 million to settle lawsuits over its use of illegal engine-control software on diesel vehicles that produced false results on emissions tests. (New York Times)
China’s biggest bank plans to reduce its space in Trump Tower when its lease runs out in October, creating a potential headache for the Trump Organization. (Bloomberg)
Sears Chairman Eddie Lampert submitted a revised roughly $5 billion takeover bid for the retailer, increasing the chances it will escape liquidation. (Reuters)
The San Francisco Giants’ stadium has been renamed Oracle Park, marking the end of the team’s deal with AT&T. (San Francisco Chronicle)
Today’s Question and Answer
In response to our question about outsiders helping to police content for social-media companies:
Ryan James from Texas wrote: “By allowing outside groups to police their content, social-media companies are setting the stage to become political machines. This will allow organized right-wing and left-wing influence to run amok, not that it already isn’t, but the entry of organizations changes the game from a shouting match to an organized removal based on whoever has the most lobby influence and power (aka money).”
Julia Wilson from California said: “Social-media companies are sitting in the midst of some of the sharpest young minds in the world’s most progressive technological universities! Why not look to the intelligentsia in their backyard? Students graduating today will be faced with fixing this planet we insist on fracturing and they may have more of a ‘survival’ incentive than a financial one to find probable solutions. Programs such as IDEO at Stanford and Global Policy and Strategy at University of California, San Diego are think tanks for global problem-solving. Give them the task...after all, didn’t Facebook come out of an institution of higher learning?!”
Gerald Nanninga from Ohio weighed in: “What it boils down to is trust—who do you trust to manage the flow of information on the internet. Quite frankly, I trust none of them. They all have an agenda. Therefore, if you can trust none of them, the least bad alternative is to give them all a piece of the action. That way, the biases should (theoretically) cancel each other out.”
John Segal from Connecticut said: “Who are these outsiders? What axes are they grinding? Social media should take responsibility for policing their own websites with NO biases. If they don’t, they risk the government doing it.”
Question for tomorrow’s 10-Point: Going back to our story above, has student-loan debt created conflict in your family? Who foots the bill? Email us your comments, which we may edit before publication, to, and make sure to include your name and location.
The 10-Point was the name given to the news column that runs on the front page of The Wall Street Journal.

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