Senators on climate change: “We look a bit like Neanderthals”

With most Americans now viewing climate change as a major threat, a group of senators announced the first bipartisan climate caucus to address the crisis. But the senators are short on specifics and seem to be taking small steps toward action, CBS News chief congressional correspondent Nancy Cordes reports.

Utah Senator Mitt Romney is one of four Republicans, three Democrats and one Independent who just joined the caucus. “We look a bit like Neanderthals,” he said. “It’s real. We’ve got to take action.” 

The caucus is the brainchild of Delaware Democrat Chris Coons and Indiana Republican Mike Braun. “My expectation is that we will start by listening,” Coons said.
 
“I’ve got four kids,” Braun said. “I took a poll among them, ‘What do you think about this idea?’ They love it.”
 
It’s a departure from the climate science skepticism the GOP has embraced in recent years. “There are still some Republican senators who think that cold winter weather is a sign that the climate isn’t changing,” Cordes said to the senators, referring to a common but mistaken assumption

“Science is more and more clear, and I think people will either be convinced or not as time goes on,” Romney said.

“I think many probably just were not willing to say it,” said Braun. “To me, it’s chemistry and physics, and I’m not going to deny that.”
 
Democratic Senator Jeanne Shaheen can already see the impacts of climate change in her home state of New Hampshire. “Our ski industry is affected, our snowmobiling, our maple-surgaring industry. So many things that people can see,” she said.

Coons also said he has seen changes in his state. “It’s striking, in Delaware, just how much it’s impacting everything, from sports fishing, commercial fishing,” he said.

The caucus’ first move will be a meeting with CEOs, some of whom are pushing for a carbon tax. But the group will not commit to anything yet. 
 
“If we go there right away, I think we’ll probably be doing the whole thing a disservice,” Braun said.

“Do you have to cap, or at the very least discourage emissions, in order to make a difference?” Cordes asked.

“Oh, I’m not going to say any ‘have to’ with regards to climate. I think all the ideas will be on the table,” Romney said.

Maine Senator Angus King said strength in numbers will help. “My philosophy is, let’s take small steps, find some things we can succeed on,” he said. 

Scientists insist there’s an urgency to act now, with millions at risk from rising temperatures and sea levels. And with the crisis threatening to cut the U.S. economy up to 10% by century’s end, these senators hope Congress can catch up.

“I do believe that old saying is true, which is, when they feel the heat, they’ll see the light,” Romney said. “People who might otherwise be more inclined to slow things down are going to say, ‘We’ve got to respond.'”

The group wants to introduce legislation by next year, but they have a challenge in winning over the Trump White House, which just began the process of withdrawing from the Paris Climate Accords this week and has rolled back dozens of environmental rules in the past three years.

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Citi says prospects for a Brexit deal look weak so brace for delay

LONDON (Reuters) – U.S. investment bank Citi said the Brexit proposals of British Prime Minister Boris Johnson appeared to fall foul of European Union red lines so an extension and election were likely.

“The UK’s proposals seem to fall foul of established EU red lines,” Citi said. “We think the prospects for a deal continue to look weak.

“If a deal is not forthcoming, we expect an extension to be secured and a general election to follow subsequently,” Citi said. “Putting forward new plans at such a late stage, and on a ‘take it or leave it’ basis, sets up a clear blame-game in the event of an extension and a general election.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Pound plunge prompts bargain hunters to look beyond Brexit fog

© Reuters.  Pound plunge prompts bargain hunters to look beyond Brexit fog © Reuters. Pound plunge prompts bargain hunters to look beyond Brexit fog

By Tommy Wilkes, Olga Cotaga and Josephine Mason

LONDON (Reuters) – For those with the stomach to digest more months of Brexit-induced political wrangling, sterling’s plunge to two-year lows is raising the question: is it time to dip back into hard-hit British markets for potential bargains?

The pound has shed more than 8% since May, a drop that accelerated since Prime Minister Boris Johnson declared that the UK would leave the European Union on Oct. 31, with or without a transitional trade agreement.

A no-deal exit could inflict huge damage on the UK economy.

Bank of England Governor Mark Carney repeated that warning this week, and the prospect has driven significant underperformance in UK equities and real estate, and saddled British UK companies looking to borrow overseas with a ‘Brexit premium’.

Investors are generally staying clear of big bets on a UK recovery, and few are brave enough to predict when the political turmoil might end. The rest of the year could easily bring snap national elections, another Brexit delay and more uncertainty.

After sterling’s latest lurch lower, however, some managers with long horizons are taking a second look and concluding that — at least on paper — some British assets look too cheap to ignore.

Also tempting is the prospect of a sterling rally if a no-deal Brexit is averted. Reuters polls show it could bounce to $ 1.36.

“We’re having those discussions internally, because domestic UK assets are starting to look quite cheap relative to elsewhere,” said Legal and General Investment Management’s head of economics Tim Drayson. 

“Everyone’s joking it’s a brave decision to do it… As is always the case, if the disconnect continues to widen, it will be worth the risk.”

A weaker pound makes it cheaper for overseas investors holding other currencies to buy British assets. It can also provide UK-based fund managers with an incentive to take profits on foreign holdings and repatriate the cash.

Cheap valuations aside, there is a belief in some quarters that the UK economy should be able to weather Brexit as long as a no deal is averted. Positives include low unemployment, resilient consumer spending and Johnson’s promise of more investment.

Some fund managers have already started buying.

Martin Todd at Hermes Investment Management said he had “marginally increased UK equity exposure thanks to better-looking valuations.

HOW CHEAP?

So how cheap is the pound really?

On JPMorgan’s Real Effective Exchange Rate Index, which measures currencies’ inflation-adjusted value against trading partners, the pound is cheaper than at any time since October 2016.

(GRAPHIC – Sterling’s real effective exchange rate: https://tmsnrt.rs/2ywEL0k)

Trading around $ 1.50 before the 2016 Brexit referendum, sterling has stumbled to sub-$ 1.21 . Parity with the dollar and the euro () could beckon under a no-deal scenario.

But UBS Wealth Management sees sterling as “increasingly oversold” against the dollar. The pound’s purchasing power parity (PPP) valuation is $ 1.57, it told clients – 30% above current levels.

That measure takes into account what money can buy in two different currencies, and many investors believe currencies gravitate towards it.

“We are not expecting a sharp convergence to PPP anytime soon, but this highlights the extent of sterling undervaluation and the scope of a recovery,” UBS Wealth said.

Of course, not everyone is piling back in. A currency trader at a major bank said clients were wary of buying sterling until it was firmly below $ 1.20.

The debate for many is whether sterling reverts to historical averages once the dust settles or if Brexit does permanent damage to its long-term fair value.

For fans of ‘mean reversion’, the pound is near the bottom of a 35-year trading range between $ 1.0 and $ 2.0. What’s more, it’s only spent 0.7% of the time since 1985 below $ 1.20.

Others think old charts might need to be ripped up.

“It is not unreasonable to conclude that a ‘no deal’ Brexit outcome would result in a structural revaluation of sterling,” said Roger Hallam, currency chief investment officer at JP Morgan Asset Management.

STOCKS AND PROPERTY

Also on the slide are UK equities and British commercial and residential real estate, long a magnet for overseas buyers.

JPMorgan’s index of British domestic-focused stocks , including supermarket J Sainsbury (L:) and insurer Admiral (L:), has fallen 12% since April.

Since the 2016 referendum, the domestically-focused FTSE 250 index () has fallen in euro terms by 2%, even though earnings growth has held up relatively well. The S&P 500 () has surged 112% in euro terms over the same period.

Price-to-earnings multiples for FTSE 250 stocks also stand below their euro zone and U.S equivalents.

(GRAPHIC – UK vs European and U.S. stocks’ PE: https://tmsnrt.rs/33gQmPw)

(GRAPHIC – London vs global stocks: https://tmsnrt.rs/2MvO8FN)

Since June 2016, UK property stocks are down 28% in U.S. dollar terms while global property shares have risen 15%.

London house prices fell at their fastest pace in almost 10 years in May, while investment in commercial property has fallen.

“We do see good relative value in UK real estate right now, despite elevated political risk,” said Simon Durkin, BlackRock’s head of European real assets research.

(GRAPHIC – UK real estate since Brexit vote: https://tmsnrt.rs/2MuIaFb)

Julian Sandbach, head of central London capital markets at Jones Lang LaSalle, said that in recent weeks long-term focused Asian investors had returned to the London office market, and the pound’s plunge was the catalyst.

“Whatever happens, the longer-term prospects are extremely good for the UK,” said a person familiar with sovereign wealth fund (SWF) investment in Britain – adding that most SWFs were likely to hold off until “a further sterling fall and clarity on the terms of the (EU) exit”.

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Another look at the Australian jobs report

The headline data (the seasonally adjusted) is here, its what the market is immediately focused on:

The ‘trend’ data is a better guide than the seasonally adjusted date (and I’ll reiterate what I said above so there is no doubt – the SA data is what the market focuses on). 

A look at the trend data now:

  • Australia’s trend participation rate increased to 66.0 per cent
  • The trend unemployment rate remained steady at 5.2 per cent
  • trend monthly employment increased by around 26,000 persons
  • Full-time employment increased by 15,000 persons
  • part-time employment increased by 11,000 persons
  • Over the past year, trend employment increased by 329,000 persons (2.6 per cent) which was above the average annual growth over the past 20 years (2.0 per cent).
  • The trend monthly hours worked increased by less than 0.1 per cent in June 2019 and by 2.0 per cent over the past year. This was above the 20 year average year-on-year growth of 1.7 per cent.
  • The trend monthly underemployment rate remained steady at 8.3 per cent in June, and decreased by 0.2 percentage points over the year. 
  • The trend underutilisation rate decreased by 0.4 percentage points over the year.

AUD … popped its overnight high very briefly but has since come back a touch:

aud chart jobs report Australia

I’ll be back with more AUD in a few moments

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Forex – U.S. Dollar Falls Slightly as Investors Look Ahead to Jobs Data 

Investing.com – The U.S. dollar slipped slightly on Tuesday, as trade optimism faded and investors looked ahead to Friday’s jobs report.

The , which measures the greenback’s strength against a basket of six major currencies, inched down 0.1% to 96.347 by 10:31 AM ET (14:31 GMT).

The U.S. is due Friday and is projected to show nonfarm payrolls rose by 164,000 in June, rebounding from a steep decline in May.

If the numbers continue to disappoint, it’s likely to further support the case for the Federal Reserve cutting rates at its. The Fed opened up the door at its last policy meeting for a rate cut this year.

Meanwhile, other central banks are also cutting down rates in a bid to curb slowing global growth amid fears of trade war uncertainty.

The cut interest rates to a record low of 1% overnight, with RBA Governor Philip Lowe saying the move was designed to support employment and help inflation move towards the bank’s target. jumped 0.4% to 0.6991.

The dollar was lower against the safe-haven Japanese yen, with falling 0.2% to 108.21. Elsewhere, the euro rose with up 0.1% to 1.1291, while slumped 0.4% to 1.2589 and inched down 0.1% to 1.3126.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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A look at the major earnings to be released in the January 21-25 week

What key earnings releases are schedule this week

With the government shutdown continuing, the earnings releases for the 4Q are helping to fill some of the event release void.  The following companies are expected to release earnings in the January 21-25 week.  

Monday, January 21

  • Wynn Resorts, WYNN

Tuesday, January 22

  • TD Ameritrade, AMTD
  • Stanley Black & Decker, SWK
  • Travelers, TRV
  • Halliburton, HAL
  • United Technologies Corp., you TX
  • Johnson & Johnson, JNJ

Wednesday, January 23

  • P&G, PG
  • Raytheon, RTN
  • Ford, F
  • Celegene, CELG
  • Freeport-McMoRan, FCX
  • Texas Instruments, TXN

Thursday, January 24th

  • American Airline, AAL
  • Southwest , LUV
  • Bristol-Myers Squibb, BMY
  • E*TRADE financial Corporation, ETFC
  • Intel, INTC
  • Starbucks, SBUX
  • Intuitive Surgical, ISRG

Friday, January 25

  • Colgate-Palmolive, CL

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