5 Things You Need to Know to Start Your Day

Good morning. Moody’s cuts China’s credit outlook, the US kicks off a bumper week of jobs data and Kerry calls out Chevron. Here’s what’s mo [View in browser]( [Bloomberg]( Good morning. Moody’s cuts China’s credit outlook, the US kicks off a bumper week of jobs data and Kerry calls out Chevron. Here’s what’s moving markets.  —[David Goodman]( China debt warning Moody’s Investors Service put China’s bonds at risk of a ratings downgrade on Tuesday, as rising debt concerns saw it [cut its outlook on the nation’s bondsÂ](to negative from stable. The firm said China’s fiscal stimulus to support local governments and its spiraling property downturn was posing risks to the nation’s economy, ​​​​​​ underscoring deepening global concerns about the level of debt in the world’s second-largest economy. The move helped drive down emerging-market equities more than 1%, while the government quickly pushed back, saying it was “disappointed” with Moody’s decision and the nation’s economy “will be highly resilient and has large potential.” US jobs data US stocks futures also extended losses after the China news and pointed to a lower open on Tuesday. The moves come before the first in a string of crucial jobs data this week, with the US set to report the JOLTS job openings report. That will be joined in coming days by ADP, initial jobless claims and the all-important [payrolls data.](bbg://screens/%7BNSN%20S52ZF9DWLU68%20%3CGO%3E%7D) Also today, the US will see the ISM services indexes, and the final reading of November PMI data. Kerry call outs Chevron US climate envoy John Kerry [criticized some US oil producers]( for not doing enough to combat global warming and singled out Chevron for particular scrutiny. “We have no real evidence that they and a lot of others are doing what every company needs to do,” Kerry said at the Bloomberg Green summit at COP28 in Dubai on Tuesday. Asked what more Chevron can do, Kerry was blunt: “Everything” ECB outlook German government debt advanced and money markets amped up easing bets after the European Central Bank’s Isabel Schnabel told Reuters that further [interest rate hikes are unlikely]( and didn’t dismiss the possibility of a cut next year. The typically hawkish ECB official spoke days after a report showed euro-area consumer-price growth slowed to 2.4%, far lower than economists had anticipated. Investors are now fully pricing in an interest-rate cut in April, and Schnabel didn’t rule out such a move could transpire. “We have to see what’s going to happen.” December debate The opening to December trading shows investors may be concerned November’s epic rallies went too far, too fast in anticipating a near-perfect soft landing for the economy, [Garfield Reynolds and Rita Nazareth write today.]( Wall Street kicked off this week with losses for stocks and bonds in a sign that traders’ aggressive pricing for early, rapid Federal Reserve rate cuts in 2024 may have overshot. That might spell doubts over a trade that stands to pay off handsomely if rate cuts materialize — or backfire spectacularly if US policymakers opt to keep borrowing costs higher for longer. Will the American exceptionalism prevail next year, allowing S&P 500 to outperform international assets? Or is the rally, driven mainly by the Big Tech, about to end, and it's time to sell stocks like Apple Inc. and Microsoft Corp.? Where will Bitcoin and gold trade at the end of 2024? Share your views in the latest [MLIV Pulse survey](. What We’ve Been Reading This is what’s caught our eye over the past 24 hours. - US examined Hindenburg allegations [before giving loan to Adani](. - UK [supermarket giants get a boost]( as sales pick up. - Barclays falls sharply after [Qatar’s wealth fund ditches shares](. - London Stock Exchange is [hit by third outage]( since October. - Nokia drops 1% after AT&T taps Ericsson for $14 billion deal. - Eastspring, Barings [shrink hedge fund teams]( in China pullback. - [68,000 gallons of ‘unfit’ olive oil](seized by Italy and Spain. And finally, here's what Joe’s interested in this morning There are two striking things to me in the market right now. One is that we're clearly still seeing an uptick in that 2021, speculative energy again. It's not just that Bitcoin is back above $40,000 again. We're also seeing it in certain stocks. Check out this chart of Affirm, one of the pioneers of the Buy Now Pay Later model. ARKK, meanwhile, is up over 42%, just since late October, and now it's close to its highs of the year. The other thing about this market is still how tightly linked stocks and rates are. One of the key things over the last couple years has been the emergence of a positive correlation between stocks and bonds. There's been no diversification. No risk offset. This remains the case, even with the recent decline in rates, and talk of rate cuts. So for example yesterday, the S&P 500 fell 0.54% and the TLT ETF (long-term Treasuries) fell 0.44%. We're still in a regime where when it's "risk off" in stocks, you're not getting a bounce in Treasuries. Back in the ZIRP era, when we would have big risk-off periods, people would pile into Treasuries. But that's flipped, with the Fed having moved into inflation fighting mode. At some point the old pattern may start to re-assert itself, as the "Fed put" comes back. But for now, we're not there. 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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