Ahead of what some predict will be the biggest parliamentary defeat in 95 years for the U.K. government, expect Old Blighty to get plenty of time in the spotlight Tuesday.

A vote by U.K. lawmakers on beleaguered U.K. Prime Minister Theresa May’s doomed Brexit deal will come in around bedtime for Britain, but that still gives Wall Street time it over. One could argue that there is not much in this for U.S. investors, who have 99 problems of their own. But then recall more than two years ago when the U.K. voted itself out of the eurozone and lots of markets suddenly cared a lot.

One asset that could provide much excitement for Tuesday is the pound, and our chart of the day, below, takes a look at what could go wrong there.

Read: The latest Brexit predictions from the City of London

Given China’s plans to stimulate its own economy, announced earlier, the day might be looking much brighter were it not for Brexit and ugly German growth figures. And then there is the fact we’re entering the heart of darkness, er, earnings season, with JPMorgan Chase & Co. rolling out this morning with a rare miss on both the top and bottom line.

That brings us to our call of the day, from the Bank of Merrill Lynch Fund Managers’ Survey from January, which finds investors with the gloomiest outlook on corporate profits since 2008. A net 52% of investors expect global profits to deteriorate over the next year, a “major reversal” from just 12 months ago when a net 39% saw profits improving.

The survey also saw the second-biggest two-month collapse on record in global inflation expectations, and the worst outlook on the global economy since July 2008, though just 14% of fund managers foresee a recession this year.

“Investors remain bearish, with growth and profit expectations plummeting this month,” said Michael Hartnett, chief investment strategist. “Even so, their diagnosis is secular stagnation, not a recession, as fund managers are pricing in a dovish Fed and steeper yield curve.”

And that is driving investors toward a “tentative risk addition” via tech stocks and emerging-market assets, as their chart below shows:


Other highlights from that survey: a trade war is now at the top of the biggest tail risks cited by investors for the eighth straight month, followed by quantitative tightening and a China slowdown. And for the second time this year, long-dollar positions have topped so-called FAANG + BAT as the most crowded trade for investors.

The market

Dow

YMH9, +0.01%

S&P 500

ESH9, +0.13%

 and Nasdaq

NQH9, +0.40%

 futures are in the black. That is after Monday’s session, which ended lower for the Dow

DJIA, -0.36%

S&P 500

SPX, -0.53%

 and Nasdaq

COMP, -0.94%

The pound

GBPUSD, -0.2332%

 is seesawing ahead of the Brexit vote, while the ICE Dollar Index

DXY, +0.30%

 is up, along with crude

US:CLU8

Gold

US:GCU8

is softer.

Europe stocks

SXXP, -0.03%

 are up, barley, while the FTSE 100

UKX, +0.00%

 is taking its cues on pound strength. Asia stocks also rose, with the Hang Seng

HSI, +2.02%

 up 1.8%.

The chart

As the clocks ticks down to the big Brexit vote in the U.K., our chart of the day, from Marshall Gittler, chief strategist of ACLS Global, serves as a warning to those who are at risk of getting caught off guard by that outcome.

It focuses on the pound, which has already been swatted around this morning. Gittler says less demand for puts and more demand for calls indicate investors are “becoming less worried about a possible collapse of sterling.” Puts grant owners the right, but not the obligation, to sell a given asset, while calls are similar options but used to buy an asset and tend to be used to express bullish views.

ACLS Global

“Personally, I think that’s wishful thinking. Don’t forget, people can be wrong; the day before the Brexit referendum took place back in 2016, the odds of a ‘remain’ vote were put at 82% and ‘leave’ at only 23%,” said Gittler, who adds that the big problem is that all sides of the argument think they could win by taking negotiations “to the cliff’s edge.”

In any case, he and others say the effect on sterling all comes down to how bad the defeat is for May. Some say if she loses that vote by more than 100 votes, things could get ugly for the pound.

The buzz

More banks are reporting on the heels of Citi’s

C, +3.95%

 revenue miss Monday.

So far, JPMorgan Chase & Co.

JPM, +1.03%

reported fourth-quarter profit and revenue that rose less than expected, with net income increasing to $7.07 billion, or $1.98 a share, from $4.23 billion, or $1.07 a share, in the same period a year ago.

UnitedHealth Group

UNH, +0.16%

meanwhile, produced better-than-expected quarterly results earlier Tuesday.

Separately, Delta

DAL, -1.67%

delivered in-line revenue for its fourth quarter, but shares still slipped.

Looking ahead, Wells Fargo

WFC, +1.15%

and the parent of United Airlines were set to report

UAL, -0.20%

An anonymous trader made a huge bet on S&P 500 futures on Monday, mirroring a bet Warren Buffett made more than 10 yeas ago.

Streaming service, Hulu — a Disney

DIS, -0.20%

Fox

FOX, -0.12%

 and AT&T

T, -0.81%

 venture — plans to beat Netflix

NFLX, -1.38%

 to the punch with its own documentary about the doomed Frye Festival.

Tidal is in the hot seat in Norway as a criminal probe gets under way over allegations that Beyoncé, Kanye West and other artists were paid disproportionate royalties due to inflated streaming numbers,

Read: Muddy Waters short seller trashes Tesla and its fan base

Relations between Canada and China have taken a turn for the worse. PM Justin Trudeau accused China of “arbitrarily” applying the death penalty in the case of Robert Lloyd Schellenberg, whose original 15-year jail sentence was overturned as being too weak. Meanwhile, Huawei’s founder and CEO Ren Zhengfei says his company has never spied, in a rare appearance following his daughter’s arrest late last year.

The economy

Producer prices and an Empire state index are due ahead of the open, with a smattering of Fed speakers also skedded, including Minneapolis Fed Pres. Fed Kashkari, Dallas’s Rob Kaplan and KC’s Esther George.

Check out our economic preview here

Random reads

Shutdown means no chefs at the White House and burgers and pizza instead for Clemson NCAA football champs

Trump’s inaugural committee spent millions on his inauguration

On strike: LA teachers after negotiations broke down

Tiffany baubles, strip-club lunches — and other outrageous worker expense claims

Brace yourself for the latest social-media annoyance — the 10-year challenge

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2019-01-15