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A crucial Brexit debate is underway that threatens to derail the whole process

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Demonstrators holding EU and Union flags gather in front of the Houses of Parliament in Parliament Square following an anti Brexit, pro-European Union march in London on March 25, 2017, ahead of the British government's planned triggering of Article 50.

DANIEL LEAL-OLIVAS | AFP | Getty Images

Demonstrators holding EU and Union flags gather in front of the Houses of Parliament in Parliament Square following an anti Brexit, pro-European Union march in London on March 25, 2017, ahead of the British government’s planned triggering of Article 50.

But perhaps the most significant amendment to face a vote in the latest Commons reading is known as the “meaningful vote.” If passed, it would mean that a majority of both houses of parliament would have future veto power over whatever deal the government is able to win in the next few months of negotiations with the European team led by Michel Barnier. And this is where investors, business, and markets more broadly should be paying close attention. As of now, the British parliament does not have this veto power. But if the day arises when such a veto is wielded by a majority in either the Commons or the Lords, and if that happens close to the official Brexit date of March 29, 2019, there remains a rather ominous possibility — one that has long worried many economists and trade specialists.

This set of circumstances would be one in which the European side refuses to return to the negotiating table for whatever reason, most likely a lack of time, and in the absence of a confirmed agreement the United Kingdom is forced to exit the European Union in a disorderly manner.

This so-called “no deal” scenario has not received much serious planning, by the government’s own admission, and the mere threat of it could add a far greater level of caution into the government’s approach to Brexit, or indeed wreck it altogether. Supporters insist this amendment is a crucial test of parliament’s sovereignty, but you can be sure that government ministers will be tracking the result of this vote by vote. Markets participants would be wise to do so as well.



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Bonds are flashing a huge recession signal — here’s what happened to stocks last time it happened

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“Yield curve inversion won’t signal doom,” Jonathan Golub, chief U.S. equity strategist at Credit Suisse, said in a note last year. “While an inversion has [preceded] each recession over the past 50 years, the lead time is extremely inconsistent, with a recession following anywhere from 14-34 months after the curve goes upside down.”

The most recent recession, in 2008, came 24 months after the 2-year and 10-year yield curve inverted on Dec. 30 in 2005, Golub pointed out. Back then, the stock market scored an 18.4 percent gain 18 months after the inversion and 17 percent return 24 months later, the analyst said.

Stocks started to go downhill only about 30 months after the inversion in 2005 as the S&P 500 eventually wiped all the gains around mid-2007 and lost a whopping 30 percent in early 2009 as the great financial crisis raged, according to Credit Suisse.

The stock market has jumped 21 percent from its Christmas Eve low as fears of an economic downturn and a full-on trade war with China recede. However, the rally was put on hold this week as the Fed‘s policy reversal reignited the recession fears. The central bank announced no rate hikes this year versus the two rate increases that were predicted as recently as December, and it also reduced its outlook for GDP to 2.1 percent in 2019 from a 2.3 percent forecast in December.

“Our core logic behind the inversion call still holds — it’s a bet the market will begin pricing in a ‘policy error’ risk,” said Ian Lyngen, BMO’s head of U.S. rates, in a note. “Unlike when the Fed was still clinging to the hope of another hike or two in 2019, an inversion now will occur as investors worry the FOMC’s on hold stance will prevent them from cutting rates quickly enough to stave off a more severe recession.”



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Tyson recalling nearly 70,000 pounds of chicken strips after a report of metal pieces

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A bag of Tyson Foods Inc. frozen chicken is arranged for a photograph in Tiskilwa, Illinois, U.S., on Thursday, May 5, 2016. Tyson is scheduled to release earnings figured on May 9.

Bloomberg | Bloomberg | Getty Images

A bag of Tyson Foods Inc. frozen chicken is arranged for a photograph in Tiskilwa, Illinois, U.S., on Thursday, May 5, 2016. Tyson is scheduled to release earnings figured on May 9.

Tyson Foods is recalling over 69,000 pounds of its ready-to-eat chicken strips after two consumers complained of finding metal in their meals, according to the U.S. Department of Agriculture’s Food Safety and Inspection Service.

The frozen strips were produced Nov. 30, 2018, and have “best by” dates of Nov. 30, 2019. The products include the 25-ounce bags of fully cooked and frozen buffalo-style chicken strips, 25-ounce bags of fully cooked crispy chicken strips, and cases of Spare Time fully cooked, buffalo-style chicken strips. The products to be recalled have “P-7221” on the back of the packaging.

The three products were shipped to retailers nationwide, according to the FSIS, and to Michigan and Washington for institutional use.

A spokesman for Tyson did not immediately respond to a request for comment.

No adverse reactions or injuries have been reported, according to the Tyson website. Customers who have these products should either throw them away or return them to the place of purchase.

This is the second major recall for the food company this year. In January, the company recalled more than 36,000 pounds of chicken nuggets after consumers complained of the product containing rubber.



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Tiffany, Nike, Avon Products & more

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Customers carry Tiffany & Co. shopping bags outside the company's flagship store in New York, March 18, 2014.

Craig Warga | Bloomberg | Getty Images

Customers carry Tiffany & Co. shopping bags outside the company’s flagship store in New York, March 18, 2014.

Check out the companies making headlines midday Friday:

Tiffany — Shares of Tiffany rose 3.2 percent after the jewelry retailer reported mixed fourth-quarter results. The retailer reported earnings of $1.67, 7 cents higher than expected, and revenues of $1.321 billion, missing estimates by $11 million. Tiffany also reported a 1 percent drop in worldwide sales, while Refinitiv had estimated 0.8 percent increase.

Citigroup, Bank of America, J.P. Morgan Chase, Morgan Stanley and Goldman Sachs — Bank shares all fell at least 2.9 percent as worries over the global economy sent Treasury yields lower. The benchmark 10-year rate fell below the 3-month yield, causing a yield-curve inversion, which often signals a recession is on the horizon.

Nike — Shares of Nike declined 6.6 percent after the sneaker maker reported weaker-than-expected sales in North America for its third-quarter. Nike also warned that its revenue growth could slow during its fourth-quarter. The company stated it was partially hurt by fewer Converse-branded merchandise.

Cintas — Shares of Cintas plunged 6.5 percent after the company reported weaker-than-expected sales for the previous quarter, while its full-year revenue outlook also disappointed investors.

Nokia — Shares of Nokia fell 6.1 percent after the network equipment maker revealed it is investigating transactions at Alcatel-Lucent, the rival it acquired in 2016, and that it alerted U.S. authorities to these possible compliance issues.

Avon Products — Shares of the beauty company rose 10 percent following a Wall Street Journal report that Avon is exploring a sale to Brazilian rival Natura. The company reportedly would acquire both the publicly traded Avon that operates worldwide and the private North American business.

Papa John’s International — The pizza maker’s stock rose more than 6 percent after announcing former basketball star Shaquille O’Neal joined its board of directors. The company also announced O’Neal is investing in nine Papa John’s restaurants in Atlanta.

Boeing — Boeing shares dropped more than 2.5 percent after an Indonesian airline canceled a $6 billion order for 49 of the company’s 737 Max jets.

—CNBC’s Jessica Bursztynsky and Nadine El-Bawab contributed to this report.



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