5 things to start your day

[Bloomberg]( Stocks get off to a bad year, economic data adds to gloom, and Trump is ready to talk. New year, same old story Equity markets are starting 2019 as [they ended 2018](, with stocks under pressure across the globe. Overnight, the MSCI Asia Pacific Index dropped 0.9 percent as [disappointing Chinese data]( soured investor sentiment in the region. Japanese markets were closed. In Europe, the Stoxx 600 Index was 1.1 percent lower at 5:45 a.m. Eastern Time, with signs of[slowing growth momentum]( preying on nerves. S&P 500 futures pointed to a [sharp drop at the open](, the 10-year Treasury yield was at 2.656 percent and gold was higher. Growth fears The proximate catalyst for the selloff this morning was factory data from Asia and Europe, with China’s Caixin Media and IHS Markit PMI falling to 49.7, the [lowest since May 2017](. In Taiwan, Malaysia and South Korea readings were also below 50, indicating a contraction in activity. In Europe, while there were [more signs]( of [economic weakness]( in the PMI number, it seems not to be enough yet to derail [further ECB tightening]( expected this year. U.K. manufacturing bucked the trend, with growth unexpectedly [rising to a six-month high](, but that came with a caveat as the boost was probably the result of preparations for a disruptive Brexit. Ready to talk The partial U.S. government shutdown moved into a 12th day with the hope of a breakthrough offered by both sides prepared to [enter talks](. President Donald Trump has invited Congressional leaders across parties to the White House [later today](. But [a compromise]( in the new Congress – and its Democratic House majority – may be harder to reach. Crude stays low Another place with the new year starting as the old one ended is the oil market where volatility remains the main theme. A barrel of West Texas Intermediate for February delivery was [trading at $44.84]( by 5:45 a.m. as global growth worries were coupled with uncertainty over where crude output actually is. Russian production reached another [post-Soviet high in 2018](, despite the country’s co-operation with OPEC on global supply cuts. Rush to safety Stocks down, growth fears, U.S. political impasse and commodities under pressure all point to one thing – a flight to safety for investors. One look at [bond yields this morning]( shows that is exactly what is going on. The yield on the German 10-year fell to the lowest since April 2017, as developed market bonds rallied around the world. Interestingly, a key indicator watched by the Fed as one of the most accurate gauges of economic health is pricing in [lower rates for the first time in a decade](. What we've been reading This is what's caught our eye over the last 24 hours. - Odd Lots: What traders will be [watching this year](. - Here’s (almost) everything [Wall Street expects]( in 2019. - Market strategist who [nailed S&P 500 in 2018]( has a Fed theory. - Gold has a [strong start to the new year]( as growth warnings increase. - China’s Xi Jinping says [Taiwan must be reunited with mainland](. - Self-driving cars keep [tapping the brakes](. - NASA spacecraft’s successful encounter with [most distant object]( ever visited. And finally, here’s what Joe's interested in this morning It's the start of the new year, and stock futures are diving, and yet I'm still thinking about the Fed decision from a few weeks ago. In particular, I'm thinking about something that Jerome Powell said during his press conference, when asked about the best measure of inflation. "It's really true, though," Powell said, "that inflation has not reacted a lot on a road of -- from 10 percent unemployment to now 3.7 percent unemployment." This is a pretty striking fact. If inflation is somehow a function of the unemployment rate, or even the economic cycle more broadly, why has it been so stable along the road from 10 percent unemployment to 3.7 percent unemployment? And does the failure of inflation to gather steam along that road call into question the entire premise of a tradeoff between the Fed's two mandates? It seems to me you can look at the past several years and think about it two ways. One way is you can say that it's just a matter of time before plunging unemployment does, ultimately, cause inflation to surge. The other way to look at it is to say that maybe new models need to be explored. Sometimes I think about October 21, 2011. That was the day that a [Christian radio host named Harold Camping predicted the world would end](. That day came and went without a rapture, and most people forgot about it as just a quirky day from the past. But the question for believers was: do you swear off doomsday predictions for good or do you just figure the calculation was off, and that the end of the world was still coming on another date. That's kind of the question the Fed faces this year. 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. 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