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

Good morning. Evergrande gets a liquidation order, oil buffeted by Middle East tensions and traders get ready for a big week. Here’s what’s [View in browser]( [Bloomberg]( Good morning. Evergrande gets a liquidation order, oil buffeted by Middle East tensions and traders get ready for a big week. Here’s what’s moving markets. — [David Goodman]( Evergrande Set for Liquidation Evergrande — the firm whose woes triggered global interest in China’s property crisis — received [a liquidation order from a Hong Kong court](Evergrande has been ordered by a Hong Kong court to be wound up) Monday, the latest step on its journey from a market giant to a poster child of the bust. The ruling, which comes more than two years after Evergrande first officially defaulted on its public debt, will leave the offshore entity under new management while its assets and debts are carved up. The builder was valued at just $275 million on Monday before trading in its shares was halted, down more than 99% from its peak. It’s collapse is by far the largest in a crisis that has dragged down China’s economic growth and led to a record spate of defaults by developers. Oil Buffeted Oil [retreated after earlier hitting its highest levelÂ](since November as traders digested the impact of separate attacks in the Middle East. The US said Iranian-backed militants [killed three service members](, with President Joe Biden pledging to retaliate. Iran sought to distance itself from the incident, with an official calling accusations of Iranian involvement “baseless.’’ Today’s move followed a jump in oil [on Friday]( after Houthi rebels attacked a vessel carrying Russian fuel. Big Week Ahead Elsewhere, stocks opened the week on a steady footing as traders [ready themselves for a big week.]( The Federal Reserve is due to announce its latest policy stance on Wednesday, followed by the Bank of England decision Thursday, and US payroll numbers Friday. There’s a blockbuster line-up of earnings too, with Apple, Microsoft. and Google parent Alphabet among those due to report. Europe’s Stoxx 600 index held near the highest level since January 2022, while futures contracts for the S&P 500 and the Nasdaq 100 were little changed. US Rulings Ripple Amid the inertia, a couple of notable European names took a hit from US rulings on Monday. Philips [fell as much as 6%]( following news it’s suspending sales of sleep apnea devices and ventilators in the US. Meanwhile, Bayer slumped [more than 5%]( after its Monsanto unit was ordered by a Pennsylvania jury to pay more than $2.2 billion to a former Roundup user who blamed the weed killer for his cancer. Meanwhile,[Holcim gained]( after the world’s largest cement maker said it plans to spin off its fast-growing North American business. Reddit Weighs IPO Reddit is weighing feedback from early meetings with potential investors in its initial public offering that it [should consider a valuation of at least $5 billion](, Bloomberg reported Sunday. The San Francisco-based social media company and its advisers are targeting a valuation in the mid-single-digit billions, and the ultimate figure will depend on the IPO market’s nascent recovery, Ryan Gould and Bailey Lipschultz wrote, adding Reddit is considering a possible listing as soon as March. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - Bluebell asks BP to[bolster oil and gas](, cut renewables bets. - London’s sky high home prices are the [most affordable in a decade](. - Blackstone[bets on AI](with a $25 billion empire of data centers. - Credit Suisse AT1 bond fallout hits [India’s most valuable bank](. - ECB official Kazimir says June[more likely than April]( for first rate cut, - The Bloomberg Daybreak [podcast]( takes a look at this week’s earnings rush. - After a wild Championship Sunday, read the [big Superbowl questions](. And finally, here's what Joe’s interested in this morning Hello and welcome to Fed week. On Wednesday we get an FOMC decision. And it seems virtually certain that there won't be any change in rates. At the same time, the Fed is expected to give some kind of green light to the beginning of a rate cut cycle at some point in the future. There's this cliché out there that when it comes to fighting inflation that "the last mile is the hardest." People love to say stuff like that. But evidence is growing that last mile has already been run. On Friday, we got the latest PCE report, and it showed that for the second straight month, Core PCE has been running at less than 2% on a [six-month annualized basis](. There continues to be a lot of debate about why and how inflation has come down as it has. If the unemployment were higher, we'd have an easy story to tell about how the Fed weakened the economy, caused job losses, sapped demand, and caused price gains to fall. But we can't tell that story because the unemployment rate is still at 3.7%, and measures of growth are still impressive. Last week, we got a Q4 GDP reading of 3.3%. That comes on the heels of 4.9% growth in Q3. Meanwhile, [the Atlanta Fed's GDPNow measure]( shows Q1 currently on track for 3% growth. Pause right there, and let it sink in. The Fed's preferred measure of inflation is currently running slightly below target, even as GDP grows nicely, and the unemployment rate sits at 3.7%. No wonder the stock market's done so well. Anyway, a good chart to check out is this one from [Mike Konczal of the Roosevelt Institute](. Per his research, 71% of the deceleration in prices has occurred in categories of goods and services where volume has actually expanded. Cars are a good example of this. We know that car inflation has decelerated since the craziness of 2021 and 2022, even as total volume sales have continued to grow. Impressive as the last several months have been, there's always new risks. And you could make any argument you want. There are signs of a hiring slowdown, so perhaps the Fed has reason to be concerned with that side of its mandate. On the other hand, there seems to be some cyclical momentum in areas like [transportation and housing](, which might represent a force for more heat. Perhaps the Fed can declare victory. Perhaps it's close to it. But it won't be long before some new set of anxieties and risks materialize. BTW keep an eye on the price of oil. Here's Brent crude futures. 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](. 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