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Our economic picture is unprecedented in modern history

January 29, 2020, 10:42 AM UTC

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Good morning.

How’s the economy doing? Fortune’s Lance Lambert tried to answer that question with nine key charts, as part of our new quarterly investment report. The story those charts tell is decidedly mixed. Two of the nine indicators are flashing red: the manufacturing purchasing managers’ index and the business spend index. Five more are in the yellow, “caution” zone—GDP, the yield curve, consumer confidence, the stock price-to-earnings ration, and auto sales. And two of the nine are green: employment and building permits.

What’s missing from those charts, however, is monetary and fiscal policy—both of which are pedal to the metal. The Fed is flooding the economy with money and holding its benchmark interest rate at an historically low level of 1.5% to 1.75%. And the Congressional Budget Office today predicted the budget deficit would exceed $1 trillion this year.

The result is an economic picture unprecedented in modern history. Predicting where it goes from here, based on past experience, is a fool’s errand. But it’s no surprise markets are on edge. Uncertain times ahead.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

TOP NEWS

BA China

British Airways has cancelled all flights to mainland China, in response to the coronavirus crisis (current death toll: 132). It is the first global airline to take the step, and did so following advice from the U.K.'s Foreign Office against all but essential travel to China. United Airlines has temporarily reduced its schedule for flights to Beijing, Hong Kong and Shanghai, but so far the U.S. has held back from banning flights. CNN

Bosch warnings

The German auto supplier Bosch has warned that global automotive production may have peaked. The company is cutting jobs and reviewing its business as a result of the fact that global auto production is on track to fall for the third consecutive year. Separately, Bosch CEO Volkmar Denner also warned the coronavirus crisis could end up disrupting the sector's supply chain. Reuters

Gaming stocks

More coronavirus-related news: gaming stocks in Hong Kong were hammered today, due to falling numbers of visitors to casino-packed Macao from the mainland—a year-on-year drop of just under 80% during the Golden Week holiday period. Melco International Development was down 5.2%, Wynn Macau 4.1%, Sands China 5.6% and Galaxy Entertainment 5.2%. CNBC

Huawei U.K.

The U.K.'s decision to accept Huawei into its 5G infrastructure rollout—to a limited degree—risked incurring the wrath of the U.S., which had starkly warned against doing so. But it seems Prime Minister Boris Johnson has talked President Donald Trump down from a full-blown confrontation, based on the importance of the countries' security and economic relationship. Guardian

AROUND THE WATER COOLER

Time's Up

In partnership with Time’s Up, Fortune reached out to all the 2020 presidential candidates with a list of questions about the economic issues that most directly affect working women and working families (such as paid family leave, sexual harassment, the gender pay gap, and more). Thirteen of the remaining 15 candidates—including President Trump—participated, with many doing exclusive video interviews. Fortune

Match Group

Match Group CEO Mandy Ginsberg is stepping down to deal with personal issues, including surgery to remove potentially dangerous breast implants, and the devastation of her Dallas home by a tornado. The new CEO as of March 1 will be Shar Dubey, the current president at Match Group, which operates a range of dating apps including Match and Tinder. Wall Street Journal

Nissan CEO

Is Makoto Uchida the right person to be leading Nissan at this crucial moment in the auto giant's trajectory? Just two months after he became CEO, a Financial Times analysis suggests there are doubts, due to his allegiances in the firm and his less-than-prominent leadership style. FT

Government spending

The federal government needs to rein in its small online purchases because it can't properly keep track of them, according to U.S. General Services Administration administrator Emily W. Murphy. Writing for Fortune, Murphy notes that these purchases add up to more than $6 billion a year, and the government owes it to citizens to ensure that the cash is "spent transparently and responsibly, without adding unnecessary bureaucracy." Fortune

This edition of CEO Daily was edited by David Meyer.