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China's economy; Fiat Chrysler settlement; Stocks drop

1. China's economy: Data published by the Chinese government on Thursday has added to worri...

Posted: Jan 10, 2019 1:04 PM
Updated: Jan 10, 2019 1:04 PM

1. China's economy: Data published by the Chinese government on Thursday has added to worries about a sharp slowdown in the world's second largest economy.

Prices in China rose by much less than expected in December. The consumer price index dropped to 1.9%, well below the 3% upper limit set by the central bank, and producer prices grew at the slowest pace in two years.

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Analysts at Nomura said the reports are "further evidence that China's economy is slowing at a worrying pace."

Weak inflation gives Chinese policymakers more room to loosen monetary policy in order to boost economic growth. The big question is how much stimulus will be needed.

Data published on Wednesday showed that Chinese shoppers bought fewer cars last year as trade tensions and a weaker economy contributed to the first annual sales decline in two decades.

2. Fiat Chrysler settlement: Fiat Chrysler has agreed to pay hundreds of millions of dollars in fines and civil penalties to settle charges that its diesel vehicles sold in the United States violated emissions rules.

The settlement is due to be announced Thursday, according to a person familiar with the details.

The person told CNN the total sum will be in the neighborhood of the roughly $800 million that Fiat Chrysler (FCAU) previously said it had set aside to settle the case.

Fiat Chrysler's settlement is just a fraction of the $14.7 billion deal reached between US authorities and Volkswagen (VLKAF) in 2016, which covered cheating software on nearly a half-million diesel cars sold in the country.

3. Global market overview: US stock futures were lower, indicating the Wall Street might take a breather from its recent winning streak.

European markets opened down, following a negative trading session in Asia.

US oil prices retreated 1.4% following eight days of gains, the longest winning streak since July 2017. Crude was trading at $51.65 per barrel.

Stocks lost steam late Wednesday after President Donald Trump walked out of a government shutdown meeting with Congressional leaders, but they still managed to close higher.

The Dow and the S&P 500 added 0.4%. The Nasdaq climbed 0.9%, rallying for the ninth time in 10 days.

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4. Companies and economics: Jaguar Land Rover will hold a press conference at 10:00 a.m. ET. UK media report the carmaker will announce as many as 5,000 job cuts amid falling sales.

UK lawmakers will continue to debate the Brexit deal negotiated by Prime Minister Theresa May on Thursday. The pound was trading 0.3% lower against the dollar.

A report on initial jobless claims in the United States will be published at 8:30 a.m. ET, giving investors an indication whether the labor market continued its strong ride into the New Year.

5. Coming this week:
Thursday — Federal Reserve Chairman Jerome Powell speaks at the Economic Club in Washington, DC
Friday — CPI reports

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