5 Things You Need to Know to Start Your Day

Good morning. Markets prepare for data, China pledges more support and Goldman Sachs offloads businesses. Here’s what’s moving markets. — Sa [View in browser]( [Bloomberg]( Good morning. Markets prepare for data, China pledges more support and Goldman Sachs offloads businesses. Here’s what’s moving markets. — [Sam Unsted]( Data deluge Stocks in Europe and Asia [racked up further gains ahead]( of a raft of economic data due this week. In the US, traders will be closely-watching the JOLTS job openings data at 10 a.m. in New York, plus a consumer confidence reading at the same time. Given the Federal Reserve’s emphasis on data dependence for its rate decisions, all economic reports are getting extra scrutiny. Still to come this week will be GDP and a raft of jobs numbers to pore over. China support China pledged to [strengthen policy support]( and speed up government spending as the recovery of the world’s second-biggest economy faces hurdles. The comments made by authorities were largely a repeat of Beijing’s policy stance, which may not be the [“bazooka’’]( that markets are looking for. [Economists trimmed]( their growth, prices and trade expectations for China, saying the outlook is showing scant signs of improving and predicting more monetary-policy easing. On Tuesday, authorities were said to be set to [announce a cut to existing mortgages]( for the first time since the global financial crisis. Goldman sales Goldman Sachs’s [sale of its GreenSky consumer lending business]( is entering the final stretch, with suitors asked to submit a third round of offers and with a number of private-equity giants said to be in the mix. Separately, Goldman is [selling its investment-advisory arm](, aimed at the mass-affluent market, to wealth manager Creative Planning. It’s another step to refocus on its ultra-rich client base. Bloomberg Opinion’s Paul Davies examined how Goldman [can head off criticism]( about its bad bet to push into consumer banking. Mixed markets US stock futures are little changed and gains in European stocks have pared somewhat from earlier in the session. Treasuries are little changed and the dollar is mixed against G-10 currencies. Crude oil prices are edging higher. Coming Up… Along with the job vacancies and consumer confidence data, there will be earnings from electronics retailer Best Buy. Michael Barr, vice-chair for supervision at the Fed, will speak. Will US Treasury yields keep climbing? At what point will investors forgo the risks related to stocks and park their money in bonds instead? Is splitting investments between equities and fixed income, as in a 60/40 portfolio, still a valid strategy? Share your views in the latest [MLIV Pulse survey](. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - What to do with an [empty 45-story skyscraper](? - Vetting [69,000 interns]( for the next math genius. - Retailers expanding into [patient care](. - Florida braces for [Tropical Storm Idalia](. - More calls for [Rubiales resignation](. - Nigeria’s [train to nowhere](. - Michelle Obama [calls for equal-pay]( at the US Open. And finally, here's what Joe’s interested in this morning In yesterday's newsletter, I wrote about how it's clear that central bankers around the world are clearly anxious about the era of Big Fiscal. This is evident from the fact that multiple sessions and papers at the recent Jackson Hole event touch on some way the fact that government debt issuance and levels are very high, with potential implications for financial stability and monetary policy setting. [On today's episode of the Odd Lots podcast](, our guest is the famous Cal Berkeley economist Barry Eichengreen, who delivered a paper for the event titled [Living with High Public Debt](, which is about exactly what it sounds like. Public debt issuance exploded in 2020, for obvious reasons. And with governments (particularly on the US) spending heavily on infrastructure and the energy transition, deficits remain elevated. There were two aspects of our conversation with Eichengreen that really stood out to me. One is that in the US (and also elsewhere), any sort of muscle for meaningful fiscal consolidation has atrophied. Setting aside whether substantial spending cuts or higher taxes is a good idea or not, such policy moves are extremely hard to imagine in almost any political arrangement right now. Why that is the case is debatable (Eichengreen himself talked about social media and heightened polarization). But it's true that in the past, you had Presidents raising taxes in order to close the deficit. And it seems like such a thing would be harder to imagine today. Again this is not to say that cutting spending or narrowing the deficit is a good idea or not. Others can debate that. But if you were to think it was a good idea, then the follow through to action seems very difficult. And per Eichengreen, this is not just a US phenomenon. The other interesting angle on this is that while people talk a lot about ratios like debt-to-GDP or deficit-to-GDP, what really precipitates a debt crisis is likely to be something political. Whether it's something like a debt-ceiling induced default, or some other collapse in confidence in the US political system, that's probably how you'd get an actual debt crisis. Conversely, people talk about some new currency from elsewhere one day displacing the dollar, and they say things like about how China needs to run a current account deficit in order for that to happen. But it's the political hurdle that's harder. We're still a long way from people around the world wanting to hold a Chinese government token as a truly safe asset. As Eichengreen sees it, high debt levels will effect different countries differently, with much more stress on emerging markets, as opposed to rich countries such as the US. But history says that absent some sort of crisis, this level of issuance is likely to be a new normal that central bankers will have to take into account for some time. Find the episode on [Apple](, [Spotify](, or elsewhere. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( 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. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. 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](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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