5 Things You Need to Know to Start Your Day: Americas

Good morning. Bitcoin ETFs got approved, the latest inflation reading is on the slate and jobs are being cut in the tech industry. Here’s wh [View in browser]( [Bloomberg]( Good morning. Bitcoin ETFs got approved, the latest inflation reading is on the slate and jobs are being cut in the tech industry. Here’s what’s moving markets. — [Sam Unsted]( ETF approval Exchange-traded funds investing directly in Bitcoin were [given the green light by US regulators](, marking a landmark moment for the crypto sector that will broaden access to the token both on Wall Street and beyond. After a stellar run in 2023 and volatility to start 2024, Bitcoin’s price wasn’t moved much by the approval, [briefly topping $47,000](. Rival coin Ether, however, [surged on speculation]( it could be next in line. Crypto-linked stocks in the US are extending their recent rally and the approved funds will start trading today. Inflation day US consumer price inflation data is due later and is likely to [show another soft reading](, in part due to more declines in price growth in the goods sector. Stocks and bonds [are rising globally]( ahead of the numbers, which will help to clarify the path for Federal Reserve rate policy. John Williams, president of the Federal Reserve Bank of New York, said monetary policy is now likely sufficiently tight to guide inflation back to the 2% target, but that [more evidence will be needed]( before any rate cuts emerge. JPMorgan Asset Management, however, thinks Fed rate cuts [could top current forecasts](. Tech layoffs Google is [laying off hundreds of staff]( that work on its digital assistant, hardware, and engineering teams as it continues to cut costs. The move comes as Google, part of Alphabet, has seen its core search business face more pressure from rival AI offerings from Microsoft and OpenAI. It’s the latest in a slew of [tech companies to announce layoffs]( already this year, echoing what happened at the start of 2023. Amazon is cutting workers in its Prime Video and Twitch units and Unity Software is planning to slash 25% of its workforce. Out of favor China is [quickly losing its place]( as a must-have holding in global portfolios following years of losses, with that trend likely to accelerate as some of the world’s largest investors distance themselves from the market. An analysis covering 14 pension funds with investments in Chinese stocks shows most of them have cut their holdings since 2020, with some larger players doing so for a third straight year. Elsewhere, Chinese leader Xi Jinping is [calling for stable US relations]( amid a test to the ties from the election in Taiwan. Deal prospects The earnings calendar is light for Thursday but will pick up pace on Friday as US banks kick off the season — JPMorgan Chase, Citigroup, Bank of America and Wells Fargo are all on the slate. The [slide in revenue and profit]( that Jefferies reported earlier in the week has darkened the mood and the UK’s [Barclays has also suggested]( that the investment banking environment in the fourth quarter was subdued. Dealmakers, however, think that [M&A could bounce back]( as inflation eases and interest rates eventually get cut. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Reaction to the Bitcoin ETF approval on the Daybreak [podcast](. - risks that a [year of elections]( around the world will bring. - Amazon’s [iRobot takeover in doubt]( as EU refuses concessions. - [Snow drought]( has the world nearing a dangerous climate tipping point. - [Insults traded]( at the GOP debate. - No relief for [Manhattan renters](. - London’s [‘Jack the Ripper’ pub]( is up for sale. And finally, here's what Joe’s interested in this morning Hello and happy CPI Day. Consensus is for a 0.3% month-over-month increase in the core rate and 0.2% headline increase. What's interesting is, as far as I can tell, this isn't actually getting that much hype. It's a sign of how the narrative has shifted that the stakes don't seem all that high for this particular report. Of course a string of hot (or cool) reports could change the narrative. On that note, on today's episode of the Odd Lots podcast, we speak with fixed income legend Harley Bassman, who is also known as The Convexity Maven. It was a great conversation with a master of the space and you can find it on all the normal podcast apps [or here](. We touched on the macro picture and specific ideas on markets, and among his key points: - He thinks that over the long term, inflation will be higher and more persistent than people expect. Specifically, he thinks that the departure of Baby Boomers from the workforce will keep the labor market tight, even as they spend at their current levels, creating a persistently inflationary mix. - He doesn't think the Fed will cut in March. He believes Powell is still mainly focused on not being remembered the way Arthur Burns is and as such will not want to take any kind of risk of cutting prematurely. - As for markets, he thinks the rally at the long end is just about finished. Rate cuts from here won't push long 10-year yields much lower he believes, and at some point cuts may push rates higher. As such, we may be at the end of yield curve inversions. Follow Bloomberg's Joe Weisenthal 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. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( 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. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](