(Reuters) – Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1/ GROWING PESSIMISM

If you wanted evidence that the U.S. economy could be rolling over, the surprise miss on the Institute for Supply Management’s closely watched manufacturing index was it. Wall Street and Treasury yields slumped after the ISM index turned in its largest drop since the financial crisis in 2008, and investors now bet that the Fed is more likely to cut rates this year than raise them.

But manufacturing isn’t the big weight in the U.S. economy it used to be. Services now account for roughly 80 percent of economic activity, and investors will be watching closely on Monday to see if ISM’s barometer of that key sector delivers solace or more pain. It is expected to dip modestly to a reading of 59.7 from 60.7 in November (a reading above 50 indicates activity is growing), but the risk is that it turns in a downside surprise like the manufacturing index.

(GRAPHIC: Manufacturing ISM index – tmsnrt.rs/2SzzWfh)

2/ FLASH CRASH

With the brewing China-U.S. trade war biting into global growth already and liquidity tightening around the world, 2019 was always going to be a stressful year. But nobody expected it to start with a currency market “flash crash” that briefly pushed dollar/yen below 105.00. The move was attributed to automatic sell triggers in thin markets, but it would have fully reversed by now if investors saw no fundamental justification to it. Poor manufacturing surveys in Asia, Europe and the United States and a sales warning from Apple might go a long way in explaining the move.

The yen’s strength is a red flag for world markets, but a massive domestic problem as well. It hurts Japanese exports and the Bank of Japan, which only months ago looked keen to normalize policy, may see it as a risk to its decades-long efforts to create inflation. Indeed, on their first day back to work, BOJ governor Haruhiko Kuroda echoed ECB chief Mario Draghi’s “whatever it takes” comment and top FX diplomat Masatsugu Asakawa reminded FX traders of past G7 and G20 coordination on intervention. Such reminders may get louder in the coming days and weeks.

(GRAPHIC: Japanese investments in US assets – tmsnrt.rs/2AD8ZR5)

3/ BACK TO SCHOOL, 5-DAY RULE

There’s no denying it: it’s been a rocky start to the year for world markets. Just how rocky the ride is for the rest of 2019 remains to be seen, of course, but it might be worth keeping an eye on one of investors’ quirky market guidelines for clues: the so-called “S&P Five-Day Rule”.

It’s a “rule” often touted by ex-Goldman bigwig Jim O’Neill, and goes like this: when the S&P 500 rises in the first five trading days of the year, the market turns in a positive annual performance. O’Neill puts the success rate of this rule of thumb since 1950 at more than 85 percent. According to the Stock Trader’s Almanac, as the S&P 500 goes over the full month of January, so goes the full calendar year. In the last 70 years there have been 10 major errors: 1966, 1968, 1982, 2001, 2003, 2009, 2010, 2015, and of course 2018.

The S&P 500 usually goes up. In the last 91 years the index has risen in 62 of them and fallen in 29 of them. At the time of writing, after only two full trading days of 2019, the index is down 2.35 percent. Plenty of time for a turnaround, but sentiment is most definitely bearish.

(GRAPHIC: S&P 500 ‘5-day rule’ – tmsnrt.rs/2Axgjxn)

4/CHIP WRECK

It was a rotten week for Apple after boss Tim Cook warned that China’s economic slowdown has caught the company off guard and trade tensions between Washington and Beijing were starting to hurt consumer spending on smartphones in the world’s 2nd largest economy.

Cook’s bombshell fueled worries that Apple’s relatively pricey smartphones may be falling out of favor in China, where rivals such as Huawei offer cheaper options. Apple shares tumbled 10 percent on Thursday – a remarkable fall for one of the world’s most valuable and liquid stocks – resulting in the S&P Technology index’s worst day since August 2011.

It deepened the recent equities rout and cemented the increasingly gloomy picture for corporate earnings, the early indications of which will become clearer in the upcoming earnings season that kicks off later this month. Analysts’ outlook is already pretty bleak: estimated earnings growth for world technology stocks 12 months ahead is just 5.6 percent, its lowest since April 2009.

(GRAPHIC: World tech stocks hit speedbump – tmsnrt.rs/2Ar5ZXx)

5/ WILL THEY, WON’T THEY?

The start of the year is normally a busy time for sovereign debt issuers, especially developing nations. Emerging market debt has risen steadily in recent years, and pay-back time is approaching: over $4 trillion of EM debt matures by the end of 2020, of which around a third is denominated in foreign currency, according to the Institute of International Finance.

But it might be different this year. Worries over global growth are deepening and sending tremors through world markets, dampening investors’ appetite for riskier assets and making it harder and more expensive for EM issuers to roll over debt and borrow.

Analysts at Citi expect EM spreads to continue widening due to “increased anxiety about the end of the economic cycle in the U.S., uncertainty about damage caused by the Fed’s tightening, and a lack of clarity regarding China-U.S. trade disputes”. It’s shaping up to be a quieter start to the year as governments weigh their options and wait on the sidelines for an opportune moment. Yet some are still planning to make an appearance: Israel will start its investor roadshow in Europe on Monday.

(GRAPHIC: EM Maturity Profile – tmsnrt.rs/2Rtp3OO)