5 Things You Need to Know to Start Your Day

Good morning and happy New Year. Oil jumps and Bitcoin traders get excited about the prospect of a spot ETF approval. Plus the US successful [View in browser]( [Bloomberg]( Good morning and happy New Year. Oil jumps and Bitcoin traders get excited about the prospect of a spot ETF approval. Plus the US successfully pressures ASML, and X is worth less than a third what Musk paid for it. Here’s what people are talking about. — [Sofia Horta e Costa]( Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( Welcome back, markets After the S&P 500’s nine-week winning streak — its longest since 2004 — it’s a more [cautious start to the year]( in markets. US stock-index futures are little changed as I type and Treasury yields are ticking higher across the curve, while the dollar is stronger. The bigger move is in oil, which jumped after [Iran dispatched a warship]( to the Red Sea in response to the US Navy’s sinking of three Houthi boats over the weekend. Bitcoin surpassed $45,000 for the first time in nearly two years as a Jan. 10 deadline draws closer for the SEC to give its blessing for a spot ETF [investing directly in the cryptocurrency](. We wrapped up almost everything Wall Street expects for markets this year [all in one place](, which you should read as a guide (on perhaps what to avoid) after consensus [missed the mark]( in 2023. For those of you who prefer audio, Bloomberg Radio’s Daybreak gives you [everything you need to know]( in just about 15 minutes. US pressures ASML The Dutch maker of chip machinery [canceled some of its shipments]( to China at the request of the Biden administration. The move is slightly ahead of schedule: ASML [had licenses]( to ship three top-of-the-line deep ultraviolet lithography machines to Chinese firms until January when new Dutch restrictions take full effect. China accounted for nearly half of ASML’s sales in the third quarter — compared with 24% in the previous quarter and 8% in the three months ending in March — as companies there rushed to import its machines. China’s Huawei produced a smartphone advanced enough to rival Apple’s iPhone last year using made-in-China chips produced with ASML’s equipment, [alarming the US](. In his New Year speech, Chinese President Xi Jinping Xi touted Chinese [“manufacturing prowess”]( and rattled off a list of homegrown projects. Is this China’s year? Almost a third of the 417 respondents to Bloomberg’s latest [Markets Live Pulse survey say]( they will increase their China investments over the next 12 months. That compares with just 19% in a [similar August survey]( and is higher than the 25% who [planned to boost exposure]( in March last year. After funds trimmed exposure to the country’s shares to the lowest levels in years, only a fifth of the survey’s respondents now anticipate cutting their China holdings. Chinese stocks peaked in early 2021 and have since slumped almost 60%, with the MSCI China Index lagging an index of global stocks for three consecutive years -- the longest streak since 2001. Take part in the next MLIV Pulse [survey](! The top banks in the US have cut headcount for three consecutive quarters. Do you think 2024 will bring further cuts, or an expansion of headcount? Will this be the year of value or growth investing? Will Nvidia’s shares, which more than tripled in value in 2023, rally to $1,000? Share your views this week. What’s X divided by three Elon Musk’s X is now worth [less than a third of the price]( he paid for the platform formerly known as Twitter, according to an Axios report. That’s because Fidelity, the investment firm which helped Musk complete the $44 billion purchase in October 2022, [cut by a further]( 11% the value of its holding in X as of the end of November. That month, Musk (in)famously told advertisers that [abandoned]( X over his endorsement of an antisemitic post that they can “f——” themselves. The upheaval at X has put off advertisers and 2023’s revenue from ad sales [is estimated to come in]( at $2.5 billion, far below the prior rate of roughly $1 billion per quarter. Coming up… S&P Global releases the final print for its manufacturing PMI in December. Data on construction spending for November is also due, with economists expecting a slight slowdown in growth from the prior month. There are no Federal Reserve speakers ahead of tomorrow’s release of the December meeting minutes. What we’ve been reading This is what’s caught our eye over the past 24 hours. - Only 13 EV models [are now eligible](for a popular $7,500 tax credit. - Airbus [managed to beat]( its annual delivery target in 2023. - Saudi Arabia’s sovereign wealth fund became [the world’s most active](. - UK food price inflation slowed to the lowest [in more than a year](. - A major earthquake in northwest Japan has killed at [least 30 people](. - Putin says he wants peace in Ukraine — [on Russia’s own terms](. - Feeling the January blues? Here’s [where to travel]( in 2024. And finally, here's what Joe’s interested in this morning Hello and welcome to the new year. I have an unfortunate prediction for 2024, which is that none of the debates from 2023 are going away. We're still going to be debating the nature of inflation. What caused it to explode in 2021 and 2022? Why did it decelerate so notably in 2023? How has the labor market been so resilient? What was the role of Fed hikes realizing disinflation? These aren't just academic questions of course, because how you answer these questions help inform whether it's safe for the Fed to begin cutting rates (maybe as soon as March?) without causing inflation to re-accelerate. Anyway, we'll have weeks and months to talk about all these things. But in the meantime, I'd recommend reading [Skanda Amarnath's 10 thoughts on the 'transitory' debate](, just to get a sense of the parameters of the conversation. Again, there's a sense in which some of this is literally academic. PhD papers will probably be written about the last three years for decades to come. But it also matters concretely in the here and now. If your story is mega-disruption to the economy caused the formation of a gigantic economic crater, then the whole thing may be fading. If your story is massive monetary and fiscal expansion lead to higher prices, then you may be on guard for a mistake of easing too soon. What the Fed does in March will be based in some sense on which framework makes more sense, and of course, the data that we'll be getting in the days ahead. And of course we get plenty this week including ISM, JOLTS, and the December Non-Farm Payrolls report due out this Friday. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. Follow him on X [@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. Tell us what you want to see in the Five Things newsletter! Please [take our quick survey here.]( [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? 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