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May tells UK lawmakers to ‘hold nerve’ as date set for new Brexit vote

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Prime Minister Theresa May listens in the House of Commons, London.

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Prime Minister Theresa May listens in the House of Commons, London.

British Prime Minister Theresa May told lawmakers that the U.K. Parliament will get another chance to vote on her deal to exit Europe before the end of February.

May said if there is no deal by Tuesday 26 February, the government will make a statement to MPs on that day, and hold a debate on an amendable motion the following day.

In a statement to the House of Commons on Tuesday, May also asked for more time to negotiate with the European Union (EU).

“The talks are at a crucial stage. We now all need to hold our nerve to get the changes this House has required and deliver Brexit on time,” May said.

Following the speech, the main opposition Labour leader Jeremy Corbyn said May was “running down the clock” in a bid to force lawmakers to accept her deal.

May wants European counterparts to adjust the terms of the “backstop” that currently forms part of the Withdrawal Agreement. If that occurs, she could likely secure a majority in Parliament.

The backstop is an arrangement that acts as a means to prevent any hard border being erected on the island of Ireland between the Republic of Ireland which is staying In Europe and Northern Ireland which is part of the United Kingdom and is set to leave the EU.

Prior to the statement, the pound sat at 1.2861 versus the dollar and was largely unmoved as she spoke.

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Get ready for companies to tell you more about the economy

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It’s now up to corporate America to reveal whether the U.S. economy simply hit a soft patch this winter, as many suspect, or is on the verge of falling into an even deeper rut.

Earnings from a broad swath of industries, like financials, technology, transportation and consumer products roll out in the coming week as the first-quarter earnings season gets underway. According to Refinitiv, earnings are expected to decline 2.3 percent in the first negative quarter in three years, but it is business leaders’ comments on the future outlook that are even more important.

Commentary and guidance is always a big deal, but this quarter it is critical. Analysts do not agree on whether the first quarter earnings season represents the trough, or even whether the second quarter will see a gain or decline in profit growth.

At the same time, economic data, like March’s jobs report, are beginning to turn more positive, and first quarter growth has quickly gone from forecasts of nearly flattish back in January to now around 2%, on the back of better March releases. The economic data has been uneven, in part because of the government shutdown, but it has yet to prove the economy is back on track.

“The market has been very sensitive to data that’s been picking up. The market is reflecting that, even though there’s talk of an earnings recession. What you don’t want is an earnings recession leading to an economic recession. If companies believe there’s a major downturn in revenue growth, they stop spending and ultimately they fire people and that leads to a recession,” said Quincy Krosby, chief market strategist at Prudential Financial.

The stock market is also at an important inflection point, with the major indexes closing in on all-time highs. The S&P 500 pressed through 2,900 Friday, seen as a point of psychological resistance. The S&P ended the week at 2,907, for a weekly gain of 0.5%. The next target traders are watching is the closing high 2,930 on the S&P. The all-time high was an intraday 2,940, reached on Sept. 21.

Earnings season got off to a good start with J.P. Morgan Chase’s quarterly earnings report Friday. CEO Jamie Dimon was very positive, saying the U.S. economy’s expansion “could go on for years.”

“If you look at the American economy, the consumer is in good shape, balance sheets are in good shape, people are going back to the workforce, companies have plenty of capital,” Dimon told analysts during a conference call. J.P. Morgan stock rose sharply, after its record profits beat analysts’ expectations.

“Positive guidance, that’s what the market needs. [The S&P] could cross 2,900, but then again it could pull back,” said Krosby, but she said the momentum has been pointing higher. “The market has basically been endorsing 2,900 and beyond.”

Krosby said important upcoming economic reports include Empire State and Philadelphia Fed surveys Monday and Thursday respectively, for a current look at manufacturing activity in New York and the Mid-Atlantic region. There is also industrial production and retail sales Tuesday.

“Jobs data was strong. Everybody was really negative on the economy, and now we’re getting pleasant surprises,” said Marc Chandler, Bannockburn Global Forex chief market strategist. The economy added 196,000 jobs in March, bringing the monthly average to 180,000 over the past three months, even with February’s shockingly low 33,000 payrolls.

Chandler said industrial production and other data should show an improved trend over last month.

As stocks have shaken off growth fears, bond yields have also moved higher. The 10-year Treasury note was yielding 2.55% Friday, well above the lows of 2.34% reached on March 28.

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UK parliament ‘very likely’ to consider new Brexit referendum, says British finance minister

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The idea of a second Brexit referendum is very likely to be put before Britain’s parliament again although the government remains opposed to any new plebiscite, the British finance minister said on Friday.

Philip Hammond said he hoped parliament would break the Brexit impasse by passing a deal by the end of June, potentially ending the calls for a new referendum, and there was a “good chance” of a breakthrough in talks with the opposition Labour Party.

“I remain optimistic that over the next couple of months we will get a deal done,” he told reporters in Washington where he is attending meetings at the International Monetary Fund.

But a second referendum could not be ruled out.

“It’s a proposition that could and, on all the evidence, is very likely to be put to parliament at some stage,” Hammond said.

Prime Minister Theresa May has so far failed to get her own Conservative Party behind the Brexit divorce deal she agreed with other European Union leaders last year, forcing her to ask the bloc for a delay and to start talks with Labour about how to break the impasse in parliament.

Many Labour lawmakers are pressing their leader Jeremy Corbyn to demand a new referendum in talks with the government.

Hammond said that while the government was opposed to a new public vote, other Labour demands – such as a customs union with the EU – were up for debate.

Hammond said about six months would be needed to hold a referendum, so if parliament voted in a couple of months’ time to make one a condition of approving a Brexit deal, there would be no time before Britain is due to leave the EU on Oct. 31.

One of May’s most pro-EU ministers, Hammond has faced criticism from Brexit supporters for saying Britain should stay close to the bloc. He angered them again recently by describing another Brexit referendum as a “perfectly credible proposition”.

“(A second referendum) in the end is an issue about parliament and parliamentary numbers, and where the Labour Party ends up on this, as the Labour Party itself is deeply divided on this issue and at some point will have to decide on where it stands,” Hammond said.

Parliament has previously rejected the idea of a new referendum and other possible solutions the Brexit impasse.

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Why Nintendo’s new mobile push for Mario is such a big switch

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Nintendo has many titles that are a good fit for mobile, said Carl Livie, managing director at AppLovin, Dr. Mario and Mario Kart among them. Dr. Mario fits the Candy Crush model as a puzzle game, while Mario Kart fits well within the 5- to 10-minute play time for mobile gaming experience. Dr. Mario mirrors the Candy Crush style of game play, but it also brings the brand name and recognition of a video game legend, which will allow it to quickly gain a large audience, especially with women over 25, Livie said. Once thought to be a peripheral demographic, women between 25 and 65 have catapulted Candy Crush to r revenue over $1 billion in 2018.

Nintendo has a strategic issue that some of its largest competitors do not: The console remains its financial driver, whereas huge technology companies have grown gaming as one among many business efforts, and niche game developers don’t rely on the console to drive revenue. Microsoft and Epic have released big console game titles, Minecraft and Fortnite, on mobile to huge success, but van Dreunen said he does not think popular Nintendo console titles such as Legend of Zelda will be showing up on mobile in the next few years.

The competition for control of the gaming platform of choice continues to grow. Netflix and Hulu already changed the role of mobile devices in streaming content by allowing users to seamlessly move from watching a movie or show on their home TV, mobile device and laptop. Gaming is going through a similar evolution. Microsoft‘s new xCloud will let users play Xbox games on Android phones, and Alphabet‘s new Google streaming game service, Stadia, has a similar focus. Apple is releasing Arcade, a gaming subscription service for use on PCs, mobile and in living rooms. Amazon also is at work on a streaming service.

Adam Bankhurst, a writer for gaming industry publication IGN, said part of Nintendo’s strategy is to offer companion games for mobile devices that will pair with console games. Bankhurst believes that this is both an opportunity to prep development teams for eventually moving their more complex titles to mobile and also creating a seamless playing experience where players can unlock characters and missions only from the mobile game. Bankhurst pointed to Nintendo’s Animal Crossing as a recent example and suggested that we may see a Dr. Mario console game come out soon with similar features.

“As cloud computing allows for increasingly advanced games to be played on mobile, the opportunity for Nintendo to add its more complex titles to mobile increases, but so does the competition in the mobile gaming sector.”

Newzoo analyst Guilherme Fernandes said Nintendo’s partnership with LINE to co-develop Dr. Mario and other projects “strongly hints at the company’s mobile strategy going forward.”

The question for Nintendo going forward is how much of its IP is it willing to put on mobile, and how much success they can expect.

“Nintendo may be slow to the game, but when they get there … they’re going to kill it,” van Dreunen said.

By Christopher Chutko, special to CNBC.com

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