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Jan 31, 2019

What's News: The Fed's Mysterious Pause; Central Banks Pivot in Tandem; Don't Think the Worst of Your Teen

The Wall Street Journal.
Newspaper.
What’s News
Sun icon. Good Morning
Here’s what we’re watching as the U.S. business day gets under way:
The Fed signals a possible end to its recent string of rate raises. In an about-face from its policy stance six weeks ago, the Federal Reserve voted to hold its benchmark interest rate steady, fueling a market rally. The rally continued in early trading today with major indexes world-wide boosted to levels not seen since early December.
  • Analysis: The Fed's mysterious pause. The most logical conclusion to draw from the statement released by the central bank is that the Fed's monetary tightening hasn’t just paused; it may be over.
     
  • Central banks pivot in tandem. A slowing global economy and low inflation is causing central banks world-wide to rethink their plans to gradually ease financial stimulus, a reversal that could bolster markets and sectors like housing and autos. 
 
Facebook posts record profit, capping a grueling year. The tech giant's strong financial results indicate that advertisers continue to see it as a powerful platform for reaching consumers and, despite the negative headlines surrounding it, users aren’t abandoning the company in large numbers.
  • GE will report earnings before the bell. GE faces a dilemma with its lending business, which has caused deep losses in recent years but also contains one of the embattled conglomerate’s best assets: the world’s biggest aircraft-leasing company.
     
  • Amazon reports after the bell, can it maintain its winning streak? By all metrics, it was a record holiday for online sales and analysts will also be watching for news of its accelerating advertising business.
 
The U.S.'s plan to reshape Latin America. The Trump administration’s attempt to force out the president of Venezuela marked the opening of a new strategy to exert greater U.S. influence over Latin America, according to administration officials. In sight isn’t just Venezuela’s Nicolás Maduro, but also Cuba, as well as curbing recent inroads made by Russia, China and Iran.
In the Midwest, temperatures hit their lowest levels in decades. The polar vortex shut down entire cities and brought businesses and government to a standstill, prompting governors to declare states of emergency in Wisconsin, Michigan and Illinois.

What's Trending

ILLUSTRATION: DANIEL DOWNEY
Six ways to improve air travel instantly. Flying doesn’t have to be such a grind, writes the Journal's Scott McCartney, who has six practical ideas to benefit customers without bankrupting airlines, gleaned from conversations with smart people in the industry, frequent fliers and his own experience of nearly 24 years covering airlines.
 
The shutdown shows American institutions are alive and kicking. The record-setting government shutdown disrupted thousands of lives, undermined the economy and left President Trump and Democrats with nothing to show for it. But it was a heartening victory for American democracy, writes the Journal's Greg Ip.
Foxconn is backpedaling on its factory plan. The company said it is reassessing its ambitious Wisconsin display factory and would likely use the site primarily for research rather than for manufacturing as promised. Foxconn’s move was praised by President Trump, who has been calling to bring manufacturing jobs back to the U.S.
Don't think the worst about your teen. Parents fear that adolescents are prone to rebellion and moodiness, but research shows that expecting bad behavior can be a self-fulfilling prophecy.
Growth in college endowments slows in 2018. Colleges and universities are facing additional stress as stock-market declines hit the growth of college endowments. Critically, endowments may not last for the long haul at the rate they are being spent. 
Howard Schultz’s presidential bid brews trouble for Starbucks. The man who transformed the company into a global business has angered many Democrats by saying he might run for president as an independent, with some calling on Starbucks’s large left-leaning customer base to boycott the chain.
Tony Romo often calls plays before they happen. How often is he right? The voice of the Super Bowl has become known for his eerily accurate predictions. We watched nearly 50 hours of game tape to calculate his hit rate.

Tax Watch

Highlights from our tax coverage
  1. Tax refunds will grow—but yours might not. The 2017 tax overhaul increased refunds on average, but the breadth of the changes, along with adjustments to workplace withholding, means results will vary.
     
  2. Trump’s tax returns remain in the crosshairs (eventually). The chairman of the House Ways and Means Committee said he plans to move deliberately when digging into the president’s finances.
     
  3. 3% for the 1%. Sen. Elizabeth Warren, the Massachusetts Democrat exploring a presidential run, is proposing an annual 2% tax on wealth over $50 million, and 3% on assets over $1 billion.
 

Chart of the Day

Blame a sudden heat spike for the arctic temperatures. The polar vortex is bringing frigid temperatures to the Midwest this week, but the reason behind the phenomenon, in part, boils down to heat.
 

This Day in History

Jan. 31, 1940
First Social Security Check Is Issued
Ida May Fuller was the first beneficiary of recurring Social Security payments after filing her retirement claim in November 1939 and working under the program for a little short of three years. Fuller received check number 00-000-001 for the amount of $22.54. The Social Security Administration began in 1935 when President Franklin D. Roosevelt signed the Social Security Act.
THE WALL STREET JOURNAL
 
—Compiled and edited by Phil Nobile in New York and Bryony Watson in London

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