Okay that's not good

MARKETS

• China: Financial markets will be closed this week for the Lunar New Year
• Monetary policy: Now that football season is over, you can finally turn your attention to your fantasy central banking team. Who's reviewing policy this week? England, Australia (a steal in the 3rd round), Brazil, Mexico, Russia, Serbia, Philippines, Thailand, and India.

AUTO

Nissan Goes Rogue

The automaker has reversed its decision to build its X-Trail SUV at a plant in northern England and instead will produce it in Japan (the model's global hub). British Prime Minister Theresa May must be kicking herself for not insisting on "no take backs" language in the contract.

So what's the reasoning? Seems like an entrée of consolidating production with a side of Brexit concerns.

• "While we have taken this decision for business reasons, the continued uncertainty around the UK's future relationship with the EU is not helping companies like ours to plan for the future," said Nissan's Europe chairman.

Why this is extra painful: Nissan said it would make the model in the UK only four months after the tumultuous Brexit vote in 2016. The investment pledge signaled that things might turn out okay.

But they're not turning out okay

UK companies across industries are preparing for Brexit like it's the asteroid from Armageddon. Fine, that may be over-the-top, but still...

• British factories stockpiled goods in January at a rate not seen since the early 1990s as they brace for impact. It was the highest level ever seen in a G7
• A new survey from a lobby group showed that nearly 30% of British firms are either considering, or actively planning on, moving ops out of town.

But there's more to this Nissan story than Brexit

Lower demand for diesel vehicles in Europe is stinging carmakers...and Nissan's suffering the most. Last year, it cut hundreds of jobs at its northern England plant while watching European sales (down 14% in 2018) fall below that of Kia, Citroën, and Dacia brands. *Quickly Googles Dacia*. Okay that's not good.

Zoom out: The UK auto industry is struggling from both Brexit and non-Brexit related factors. Investment dropped 46% and new car production fell 9.1% in 2018, according to an industry trade group.

CURRENCY

A Stronger Dollar Sees Its Shadow

Hopefully by the time Q1 earnings begin in April, your memories of sub-zero temps will be long gone. Not so for c-suites. That's because weather repeatedly pops up as one of two unwanted guests for earnings season. The other? Currency market woes.

The ICE Dollar Index jumped 4.4% last year, the most since 2015. And for multinationals that sell products overseas, that dollar strength (paired with the ongoing trade war) presents a major challenge, reports Bloomberg.

• Quantifying that challenge? Every 7% to 8% change in the dollar results in a 1% move in the opposite direction for U.S. corporate profits, per Credit

Who's worried? Already, IBM took a larger-than-expected revenue hit. Johnson & Johnson's international growth was next to nil thanks to currency fluctuations. And United Technologies called foreign exchange a headwind in Q4.

This isn't new, though. North American firms reported a collective $11.8 billion hit in the third quarter of last year c/o negative currency impacts—which was itself nearly 12x the hit a quarter earlier.

BANKING

Deutsche Bank’s Got Issues

"At this point, Deutsche Bank's biggest problem may simply be how many problems it has." Don't sugarcoat it, Bloomberg.

So what are all those problems? Germany's top bank has suffered a prolonged spell of declining revenues, growing expenses, crumbling credit ratings, and misconduct fines to the tune of $17 billion in the last decade.

Paired with outdated technology and difficulty attracting top talent? Well, maybe the memes say it best—is DB still a BB? Its shares lost more than half their value in 2018.

The bank has tried to turn things around. CEO Christian Sewing brought DB its first annual profit in four years last year, and he's cut costs even more than he pledged.

• But cost-cutting can only get you so far when you were one of the slowest banks to remedy your balance sheet and c-suite post-2008 crisis. That's why some have called for a German government-brokered merger between DB and Commerzbank—the country's two biggest private sector lenders.

+ While we're here: DB allegedly denied then-candidate Donald Trump a loan during the 2016 campaign, per the NYT. Why? His "divisive candidacy" made it too big a risk.

TECH

What Were You Doing at Age 15?

Facebook turns 15 years old today. And really, it's just like any other teenager—suffering through growing pains, being scolded by authority figures, and serving as a platform for 35% of the world's population.

CALENDAR

The Week Ahead

Honestly, the Monday after the Super Bowl should be a national holiday.

Monday: World Cancer Day; motor vehicle sales; earnings (Alphabet)

Tuesday: State of the Union; Chinese New Year begins (Year of the Pig); earnings (Snap, BP, Viacom, Disney, EA)

Wednesday: International trade; earnings (GM, Chipotle, GoPro, Match Group, Spotify, Eli Lilly)

Thursday: Bank of England meeting; jobless claims; earnings (Twitter, Grubhub, Yum! Brands, Dunkin' Brands)

Friday: Earnings (Hasbro, Phillips 66)

WHAT ELSE IS BREWING

• General Motors said it's in talks to invest about $2.73 billion in Brazil from 2020 to 2024.
• The jury in the case of notorious drug lord Joaquín "El Chapo" Guzmán Loera is set to begin deliberations today in New York.
• Snopes Media Group (one of Facebook's first fact-checking partners) said it's axing the relationship after two years—even if it squeezes Snopes's bottom line.
• Sears will face its unsecured creditors (aka people Sears owes money to but who don't have collateral protection) in bankruptcy court today.

BREAKROOM

Keyboard Trivia
Don’t look down. Keep your eyes straight on the screen. Can you name the symbols that accompany the numbers on the top of your keyboard from 1 all the way to 0?

(Answer located at bottom of newsletter)

Breakroom Answers