| By Julia Horowitz • Thursday, December 19 | | | | Good Thursday morning. In today's newsletter: Sweden's central bank ends its big experiment, a sobering decade for self-driving cars and CNN Business' CEO of the Year.
US stock futures are up slightly after a "meh" performance on Wednesday. Markets in Europe mostly ticked down in early trading, while stocks in Asia were mixed.
▸ Forwarded this newsletter? Want global markets news and analysis from CNN Business reporters every morning? You can sign up here. | | | What's happening now in markets: MARKET DATA AS OF 6:10 AM ET | | MARKET FLASH The world's oldest central bank ends its big experiment | |
After nearly five years of negative interest rates, the oldest central bank in the world has had enough.
Sweden's Riksbank hiked its key interest rate back to 0% on Thursday, becoming the first central bank to exit negative territory amid growing concerns that harmful side effects are outweighing the benefits of such policies.
"It's part of a general unease about having rates in negative territory," David Oxley, senior Europe economist at Capital Economics, told me.
Background: Central bankers have conducted an unprecedented experiment since the 2008 financial crisis. To juice a sluggish global economic recovery, they've pushed interest rates to their lowest points in history. In Europe and Japan, rates have been in negative territory since 2014 and 2016, respectively. Sweden's main rate went negative in 2015.
But fears about the adverse impact of these policies have been building. It's been painful for banks, which have to pay to park their money with central banks instead of collecting interest. Savers have also been penalized, and it's added to pressure on pension funds.
Such concerns explain the Riksbank vote to quit negative rates — though Oxley noted that Sweden's banks have fared better than others in Europe.
"It has become pretty clear over recent meetings that policymakers have become warier about negative rates becoming a more permanent state of affairs, and the effect that might have on people's expectations," ING economists told clients Thursday.
An outlier: Apart from the Riksbank, central banks don't seem to agree that now is the time to be raising interest rates. The Bank of Japan kept interest rates on hold Thursday. The Bank of England is expected to make the same call later in the day. | | VOICES Trade remains the top story heading into 2020 "If we get some sort of signed deal with China ... we could see another 10% in the market."
WHARTON FINANCE PROFESSOR JEREMY SIEGEL
Watch his full interview on CNN Business' "Markets Now" show. | | IN THE VALLEY Hype-filled decade for self-driving cars ends on a sober note | |
The calendar will soon turn to 2020, and you can be forgiven if you're wondering where your self-driving car is. A decade of hype and bold predictions is coming to a quiet end, my CNN Business colleague Matt McFarland writes.
Remember: "Automakers and tech companies have promised a transportation utopia, and invested billions to try to make it so. Tesla's Elon Musk talked of autonomous cross-country trips in 2017. GM promised self-driving rides would be available in 2019. Ford was more cautious with its choice of 2021.
... But now those deadlines are passing and humans are still behind the wheel. Uber, once one of the hardest charging companies in the field, put its program on hold for nine months in 2018 after one of its test vehicles struck and killed a pedestrian in Arizona. It's going to be a while — maybe a really long while — before self-driving cars transform our daily lives."
"Robotaxis have been three years away for probably the last five years," Matthew Johnson-Roberson, co-founder of Refraction AI, a startup making delivery robots, told Matt.
Another reality check: BMW and Daimler said Wednesday that they would exit the car-sharing market in North America and cut back in Europe. By March, the joint venture Share Now, formerly Car2Go, will leave the United States and Canada, as well as London, Brussels and Florence.
The venture cited "a rapidly evolving competitive mobility landscape," a lack of infrastructure and rising operating costs. It will now focus on 18 European cities. | | UP NEXT
Accenture and Olive Garden owner Darden Restaurants report results before US markets open. Nike follows after the close.
Also today →
▸ The Bank of England's interest rate decision arrives at 7 a.m. ET.
▸ US existing home sales for November post at 10 a.m. ET.
Coming tomorrow: US personal spending and income data.
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WHAT WE'RE READING AND WATCHING
▸ SoftBank Vision Fund employees depict a culture of recklessness (Bloomberg)
▸ US House of Representatives impeaches President Donald Trump (CNN)
▸ Amazon, Apple and Google want all smart devices to talk to each other (Recode)
▸ Ex-WorldCom CEO granted early release from prison (CNN Business)
▸ China is in touch with the US on the signing of a 'phase one' trade deal (Reuters)
▸ Uber settles US workplace culture probe for $4.4 million (CNN Business) | | | FINAL WORD And the CEO of the Year is...
If you're Target, you face two major challenges: Fending off competition from Amazon and Walmart, and appealing to consumers who have swapped shopping trips for spending sprees on their phones.
But Target has struck the right balance between physical stores and digital commerce. That's why Target's Brian Cornell is the CNN Business CEO of the Year, per my colleague Paul R. La Monica.
Why Paul was impressed: "Target's sales and profits consistently topped Wall Street's forecasts this year. Analysts are predicting healthy results for the holidays as well, with fourth quarter earnings per share expected to rise 11%."
Investors have rewarded the company handily. The stock has nearly doubled this year, making Target one of the top performers in the S&P 500. Read Paul's conversation with Cornell here.
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