News headlines from around the web.
What’s driving the global market freakout … in 2 minutes
By Matt Egan, CNN Money
Stock markets around the world have started 2016 in freakout mode.
The global panic attack is being fueled by fears about China and the intensifying plunge in crude oil prices.
Here’s what you need to know:
- U.S. stocks are off to their worst start on record: The Dow is down 5.2% this year, which is the worst four-day start to a year on record. This comes after the stock market just wrapped up its weakest year since the 2008 financial crisis.
- Stocks in China are crashing: Things are way, way worse in China. The benchmark Shanghai Composite has plunged 12% so far this year.
The Irony of Ending the U.S. Oil Export Ban Is Imports May Rise
By SERENE CHEONG, Bloomberg
The lifting of the U.S. ban on oil exports might actually make imports more appealing.
By allowing American oil to compete globally, the price for U.S. benchmark West Texas Intermediate crude is inching closer to the international marker Brent, which has traded at a premium for most of the past five years. As the two prices converge, U.S. refiners may seek overseas cargoes priced off Brent if they can buy them cheaper than oil linked to WTI, according to JBC Energy GmbH.
The narrowing of the gap between WTI and Brent makes it unlikely that U.S. exports would rise substantially more than now, Julius Walker, a senior energy consultant for JBC said in an e-mail. The current differential between the two benchmarks is more likely to lure Atlantic Basin oils to the U.S., particularly from West Africa, he said.
Brent would need to trade at a premium of $4 to WTI to make U.S. exports viable, according to Virendra Chauhan of Energy Aspects.
Weak Exports, Even Weaker Imports
By JAY BRYSON, FX Street
The improvement in the U.S. trade deficit in November compared to October helped a bit in lowering the trade deficit year to date compared to 2014. However, the year to date deficit was still $25.2 billion higher than the one recorded during the same period a year earlier. Much of the difference compared to 2014 was due to the goods deficit, which represented $19.4 billion, while the remaining difference was due to the trade deficit in services.
What is interesting in the trade numbers is that imports of goods into the U.S. economy remained weak in 2015, year to date, at only $2.1 trillion versus $2.2 trillion in 2014, perhaps due to the strong drop in petroleum prices last year. On the other hand, exports of goods were even weaker, at $1.4 trillion compared to $1.5 trillion year to date in 2014.
EU starts on tricky path towards relaxing China trade defence
By PHILIP BLENKINSOP and ROBIN EMMOTT, Reuters
The European Union will take the first step on Wednesday towards refashioning its trade ties with Beijing, torn over how to lower its defences to avert Chinese retaliation while protecting key industries against a damaging flood of cheap imports.
A study by a group of 25 European manufacturing federations estimates the European Union could lose up to 3.5 million jobs if it removes its trade defences against China.
Chinese officials have said they could show flexibility in allowing a transition period for particular European industries. A 2013 deal to end an EU investigation into Chinese dumping of solar panels showed Beijing and Brussels can find agreement.
The EU is China’s largest trading partner, while China ranks second after the United States for the EU and was the source of some 302 billion euros ($330 billion) of imports in 2014, more than triple their level at the start of the century
You could buy these companies with Powerball jackpot
By PAUL R. LA MONICA, CNN Money
Most of us would probably retire, pay down debt, make sure the kids are financially secure, buy a house (or 10 … hey, the Playboy Mansion is on the block) and start traveling the world.
But you could also use the $1.3 billion to take over some pretty well-known publicly traded companies.
These companies all have a market value of less than $1.3 billion. So start dreaming big. You could be the next Carl Icahn!