5 things to start your day

[Bloomberg]( Trump to invoke emergency powers while avoiding shutdown, Mnuchin calls trade talks productive, and Spain braces for snap election. Shutdown, emergency President Donald Trump is expected to sign Congress’s [compromise funding bill]( later today, while at the same time making use of his [executive powers]( to declare an emergency at the border to [unilaterally shift about $7 billion of federal funds]( towards construction of his wall. Democrats in Congress have indicated their desire to challenge any such move by the president in federal court, while some Republicans expressed concern that the House and Senate was [turning its power over to the White House](. Productive Treasury Secretary Steven Mnuchin took a positive view as U.S.-China trade talks drew to a close in Beijing, saying in a tweet that the meetings with China’s Vice Premier Liu He were “[productive](.” People familiar with the discussions seem to be less upbeat, saying China is resisting U.S. demands for [further structural economic reform](. Investors are becoming [increasingly cautious]( as the round of talks looks set to wrap up without a resolution. Sponsored by KBS Direct [Did you know that direct investment in commercial real estate afforded higher annual current income than public bonds or public real estate companies in 2018? KBS Growth & Income REIT is sold directly to accredited investors without upfront commissions or fees paid by investors. Own income-producing Class A office in prime real estate markets as part of your income and investment strategy. Invest Direct. KBS Direct.](  Snap election Spanish Prime Minister Pedro Sanchez called a snap election to be [held on April 28]( after parliament failed to back his [government’s budget](. It will be the third election in four years, and it’s not likely to [produce a clear winner]( this time around either, meaning a long period of post-vote negotiation is in store before a new government can be be formed. Investors reacted calmly to the news, with the country’s bond yields little changed by the middle of the European morning. Markets lose steam Overnight, the MSCI Asia Pacific Index slid 0.8 percent as China’s [slowing factory prices]( added to growth concerns in the region. Japan’s Topix index closed 0.8 percent lower. In Europe, the Stoxx 600 Index was 0.6 percent higher at 5:45 a.m. Eastern Time for no obvious reason. S&P 500 futures [were flat](, the 10-year Treasury yield was at 2.655 percent and gold posted a small gain. Coming up… The big number for markets to watch today is U.S. industrial production for January at 9:15 a.m., with expectations for output growth to cool to 0.1 percent from December’s 0.3 percent. Before that we get Empire manufacturing and January import/export prices at 8:30 a.m. The latest University of Michigan sentiment numbers land at 10:00 a.m. The weekly look at the health of the [U.S. shale industry]( is at 1:00 p.m. when Baker Hughes publishes the latest rig count. What we've been reading This is what's caught our eye over the last 24 hours. - The 10 best-paid hedge fund managers made [$7.7 billion]( in 2018. - Warren Buffett [doubles down on big banks]( as Berkshire trims Apple stake. - Commodity trading [once was a great business](. So why won't anyone invest in it now? - It’s a [very bad day]( for U.S. farmers. - Europe just got a [bad omen]( for the economy in 2019. - Rupee falls as Modi [vows retaliation]( for attacks. - What exactly is a [black hole](? Want the lowdown on European markets? Get the [European edition of Five Things]( in your inbox before the open, every day. And finally, here’s what Luke's interested in this morning There is a glaring asymmetry in U.S. markets. High yield bond indexes are [near record highs](. Stocks have nearly recovered all of their December swoon. And yet the 10-year Treasury yield remains about 10 basis points away from its early-January low and 35 basis points short of where it ended November. Appetite for duration[remains immense](. All in, the bond market reaction implies a [much less sanguine view of the world]( than equities. While traders had priced in some Fed tightening the day before, the fed funds futures curve now indicates [easing as far as the eye can see](. The only mutually satisfying conclusion is that a Goldilocks backdrop is back again. The risks of inflation and aggressive Fed tightening are perceived to be low, which has served to reinforce the persistently negative term premium. And no one’s calling for a big shock on any of these fronts. But if this is Goldilocks redux, the bowl of porridge is certainly smaller: the synchronized nature and level of global growth reached at the start of 2017 is long past. Maybe call it Silverlocks. In recognition of this dynamic, the bottom-up earnings per share estimate for the S&P 500 continues to grind lower. A slow-growth environment with little risk of inflation or monetary tightening seems A-OK for credit, but the degree of upside such a macroeconomic backdrop offers for stocks will be a key question that traders wrestle with in the weeks to come. To this end, Credit Suisse recently cut global stocks to neutral, noting that the rally in government bonds that flatters valuations can only do so much. “The year-to-date equity rally has been driven by a significant re-rating rather than an improvement in earnings prospects,” concluded Credit Suisse global CIO Michael Strobaek. 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 anywhere else. [Learn more](. [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