5 things to start your day

[Bloomberg]( Stock sell-off continues, oil plunges, and Xi says nobody tells China what to do. Markets drop Yesterday’s drop to the [lowest close in 14 months]( for U.S. equity markets has set the tone for the rest of the world in trading today. Overnight, the MSCI Asia Pacific Index slid 0.9 percent, while Japan’s Topix index closed 2 percent lower to hit an 18-month trough ahead of this week’s Bank of Japan meeting. European markets were off the lows of the day by 5:45 a.m. Eastern Time, cutting losses to just 0.2 percent despite disappointing [sentiment data]( from the region’s biggest economy. As 2019 beckons, there are tentative hopes [cheap valuations]( will stem the torrent of outflows. S&P 500 futures are pointing to a [small bounce at the open]( as fears over the impact of this week’s expected Federal Reserve Hike continue to dominate. Oil plunge One thing that is keeping pressure on global stock benchmarks is the plunge in oil prices. West Texas Crude futures have dropped more than 8 percent in the last three sessions, with a barrel for January delivery falling [as low as $47.84]( this morning. Brent crude is at the lowest level since [October 2017](. The sell-off is being driven by worries over increasing U.S. shale supplies, doubts over how effective the implementation of the latest OPEC+ cuts will be, and weak sentiment as global equities fall. Sponsored Content by Barclays Gen Z have billions in buying power They’re more populous and influential on consumer spending than any generation before them, and they have unique demands. Companies planning to reuse marketing strategies developed for Millennials to sell to this generation need to think again. [See how Gen Z are reshaping key sectors.](  Xi says President Xi Jinping told an audience of party officials, military leaders and entrepreneurs that “no one is in the position to [dictate to the Chinese people what should and should not be done](” in a speech marking the 40th anniversary of the reform era. While the address was strong on rhetoric, it emphasized established policies rather than announcing anything new -- much to the disappointment of [Asian stock investors](. The communist party’s annual economic-policy meeting begins tomorrow, where more detailed plans may be unveiled. Fed meeting begins The Federal Reserve Open Market Committee begins its two-day meeting today, which is expected to clinch the [fourth rate hike of 2018]( when the decision is announced tomorrow. With investors expecting a dovish hike, attention will focus on the forward guidance given by the [updated forecasts](. President Donald Trump has [intensified his attacks]( on the institution as equity markets continue to behave in a fashion that is not [normally conducive to policy tightening](. EU hardball If Fed rate hikes have been a feature of 2018, little progress on Brexit [has been a constant](. British Prime Minister Theresa May has given herself another [four weeks to save the deal]( the deal she’s negotiated. For their part, European leaders are upping pressure on the U.K., saying that in a no-deal scenario they [would not do mini-deals with Britain]( to ease the chaos for the country under that situation. As the year of little progress comes to an end, signs of Brexit stress are everywhere across [the U.K. economy](. What we've been reading This is what's caught our eye over the last 24 hours. - Stock sell-off [defies everything]( the bulls hoped would stop it. - Trump’s tax cuts made a difference in 2018. Just not the one [backers were hoping for](. - Ryan on track for his [final act as Speaker](: Government shutdown. - Women poised to earn the same as men – [in 202 years](. - Sweden’s central bank faces its [biggest decision]( in seven years. - The quest for a [moral diamond](. - Researchers [demonstrate solution]( to quantum-communications hurdle. And finally, here’s what Joe's interested in this morning There was a funny moment yesterday, right after President Trump [tweeted]( that it was incredible that the Fed was even considering hiking rates. Everyone on Twitter started clutching pearls about the President's meddling, but then immediately my IBs blew up with comments from investors and analysts who were like, "Hate to say it, but he's got a point!" Inflation is mild, the dollar is quite strong, and there really are numerous risks out there (even setting aside the volatility in the markets), so the case that the economy needs a rate hike is not that great. Nonetheless, the market still sees a rate hike coming, though of course it's expected to be a "dovish hike." So what does a dovish hike actually look like in practice? [The University of Oregon's Tim Duy has a good post](, with a prediction for what the Fed does tomorrow that lays out multiple ways it could be dovish, including a lowering of the dots, as well as multiple substantive communication changes that suggest flexibility on the 2019 rate path. Tim also has a suggestion for journalists at the press conference: Don't waste your time asking Powell a question about Trump, since we already know he'll just ignore that and move on. Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find [FOLLOW US [Facebook Share]]( [Twitter Share]( [SEND TO A FRIEND [Share with a friend]]( You received this message because you are subscribed to Bloomberg's Five Things newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( Bloomberg L.P. 731 Lexington, New York, NY, 10022