us china trade war Archives

1. Futures Steady After S&P Record; Dollar Rebounds

A more sober mood settled on markets Friday amid fresh U.S.-China tensions and little progress on a federal spending deal in Washington. The dollar rose for the first day in five. S&P 500 futures steadied after the index closed at an all-time high on Thursday, as Congress rushed to complete a pandemic-relief deal. In a sign of renewed friction between Washington and Beijing, the U.S. Commerce Department announced it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security.” U.S. stocks may also be more volatile than usual today with options and futures on indexes and equities set to expire.

Futures on the S&P 500 Index were little changed at early morning New York time.

The Stoxx Europe 600 Index dipped 0.1%.

The MSCI Asia Pacific Index sank 0.4%.

The MSCI Emerging Market Index declined 0.3%.

2. U.S. Blacklists More Than 60 Chinese Firms, Including SMIC

The U.S. Commerce Department announced it’s blacklisting Semiconductor Manufacturing International Corp. and more than 60 other Chinese companies “to protect U.S. national security.” “This action stems from China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military-industrial complex,” the Commerce Department said in a statement. Commerce Secretary Wilbur Ross confirmed the move in a Friday morning interview with Fox Business. It was reported first by Reuters overnight. Shares in China’s top chipmaker slid 5.2% Friday in Hong Kong on the news.

3. Global Investors Are Dumping Indian Bonds Like Never Before

Even when viewed in isolation, the $14 billion outflows from India’s bond market in 2020 is remarkable: Foreign investors have never sold so much in a single year. That they did so at a time when Chinese bonds are attracting record foreign inflows underscores just how frustrated some money managers have become with the pace of capital-market reforms by Narendra Modi’s government. While China’s steady progress on bond-market liberalization has earned it a spot in benchmark indexes and helped lure $119 billion of inflows this year, India still has some of Asia’s toughest restrictions on foreign funds. The country’s failure thus far to join China in global debt indexes is adding to investor concerns about meagre inflation-adjusted yields and a widening fiscal deficit.

4. EU Gives Johnson Fishing Ultimatum as Brexit Reaches Climax

The European Union’s chief Brexit negotiator, Michel Barnier, warned British Prime Minister Boris Johnson that he will have to accept limits on access to the single market in return for greater control overfishing — or face no deal. After his British counterpart issued a statement on Thursday night describing the talks as “blocked,” Barnier said a deal could be struck if both sides make “a real effort.” But, in a speech to the European Parliament on Friday, he gave a stark assessment of the ultimatum the EU is giving to the British: access to the EU’s single market will be conditional on keeping British fishing waters open to boats from the bloc.

5. Lloyds Bank Scraps All Bonuses for 2020 After Pandemic Hammers Profit

Lloyds Banking Group is cancelling bonuses for all staff this year as the Covid-19 pandemic weighs heavily on its earnings. A spokesperson for the bank confirmed it will not pay out any group performance share awards in light of expected profitability in 2020. Lloyds expects to set aside at least 4.5 billion pounds ($6 billion) this year for loans likely to fail in the economic turmoil that’s accompanied the pandemic. While it swung to a profit in the third quarter, full-year net income is set to be sharply lower at about 1.1 billion pounds, compared to 2.5 billion pounds in 2019. The lender had already said its group executive committee had given up their bonus entitlements for the year.

6. Finablr Uncovers $1 Billion in Hidden Debt as NMC Scandal Widens

Finablr, the listed owner of two foreign-exchange businesses, uncovered about $1 billion of debt hidden from its board that may have been used for purposes outside of the company, compounding a scandal that pushed its sister firm NMC Health into administration. The London-listed company and its creditors found that Finablr Group’s overall debt was about $1.3 billion, excluding the debt of its Travelex Holdings Ltd. unit and “materially above” its last reported figure, according to a statement. Finablr had $334 million of debt at the end of June, according to a statement at the time. Chairman B.R. Shetty resigned in the wake of this corruption scandal. The announcement of Shetty’s departure was followed by news that Britain’s tax authority intends to shut down Finablr’s UAE Exchange UK and Xpress Money Services.

7. Chinese E-Commerce Newcomers Doubles Amid IPO Frenzy

Two Chinese stocks that started trading in New York this week more than doubled Thursday amid an end-of-year frenzy for newly listed companies. Oriental Culture, a provider of e-commerce services for the collectibles and art market, climbed as much as 324%. And online organic food retailer Wunong Net Technology rose as much as 147%, adding to the 440% jump in its second trading session Wednesday. Both stocks triggered a handful of volatility halts on Thursday.

8. Bank of Japan to Extend Covid Programs Amid Virus Surge

The Bank of Japan is widely expected Friday to extend its special funding measures for pandemic-hit businesses amid a resurgence of the virus that earlier this week forced the government to suspend domestic travel incentives. Some 66% of 38 economists surveyed said the bank will lengthen the duration of crisis programs that include increased purchases of corporate bonds and commercial paper and $1.1 trillion in funding tools to support bank lending to struggling firms. The programs are currently set to expire in March. All the analysts said the BOJ will likely keep its key interest rate and main asset purchases unchanged at the meeting.

9. Mandatory Covid-19 Vaccines for Travel Would ‘Kill the Sector’

The rollout of vaccines against Covid-19 has intensified the debate about whether they should be made mandatory, with the head of a major tourism lobby saying that doing so would cause irreparable harm to the struggling sector. “I don’t think governments will require vaccination next year” for travel, Gloria Guevara, head of the World Travel and Tourism Council, said at a press conference Thursday. “If they do that they will kill their sector.” Those first in line to get the jabs include the elderly and vulnerable, who “are the last people who will travel,” she said. Instead, rules for virus testing before departure are likely to be bolstered. So far, no country has made vaccination compulsory for people crossing borders.

10. Saudi Wealth Fund Put 2008 Crisis Lessons to Use in 2020

The fund received a $40 billion transfer from the nation’s reserves in March so it could take advantage of the crash in markets, buying stakes in companies including Citigroup, Facebook and cruise-ship operator Carnival. By the end of June, it had sold most of those stakes and switched to holding about $7 billion in exchange-traded funds. The $350 billion sovereign wealth fund is a key lever for Crown Prince Mohammed bin Salman to revive growth. He is seeking to get his economic master plan, known as Vision 2030, back on track after what may be the deepest recession the world’s largest crude exporter has experienced in decades.

1. Stocks Hold Gains as Lawmakers Debate Over Economic Aid

U.S. stocks held a modest gain that put them at all-time highs after data showing a further slowdown in the labour market stoked bets Congressional leaders will clinch a deal on federal spending. The S&P 500 climbed for a third day as lawmakers continued to negotiate details of almost $900 billion in coronavirus aid. The dollar slumped as weekly jobless claims rose to 885,000 versus an estimate of 818,000. Bitcoin breached $23,000 for the first time. In Europe, cyclical shares such as miners and retailers rose on news that the rollout of a Covid vaccine would begin this month.

The S&P 500 Index advanced 0.5% as of afternoon New York time, the highest on record.

The Dow Jones Industrial Average gained 0.4%.

The Nasdaq Composite Index climbed 0.5%.

2. U.S. Congress Struggles to Finish Economic Stimulus Details

Congressional leaders are working through the final sticking points of a coronavirus relief deal, although the agreement probably won’t come together in time for both chambers to vote before Friday. People briefed on the talks say the draft of the roughly $900 billion proposal includes $600 in payments for individuals, $300-per-week in supplemental unemployment insurance payments and aid for small businesses, as well as about $17 billion for airlines. But it omits aid to state and local governments and lawsuit liability protection, the two issues that stalled earlier attempts at an agreement.

3. India Rejoins US Watchlist in Possible Boost For Rupee & Bonds

India’s addition to the U.S. watchlist for currency manipulation is a trial for its central bank, and a possible boon for local currency- and bond markets. The U.S. Treasury Department’s latest foreign-exchange report cited India’s “significant” goods trade surplus with the U.S. and “sustained” net currency purchases through the year to June. Authorities should limit such intervention to periods of excessive volatility while allowing the rupee to adjust based on economic fundamentals. The central bank’s headache — which comes on top of above-target inflation and struggling growth — looks like a boost for the rupee. The currency has been Asia’s worst performer this year, as the Reserve Bank of India has countered relentless foreign investment inflows with dollar purchases that have pushed the country’s reserves to a record $579 billion.

4. London’s Economy Shaken With Covid Curbs and Brexit Fears

London enters the final days of 2020 with its position as the U.K.’s economic growth engine being whittled away by Brexit and the struggle to contain the coronavirus. The decision to place the capital under the toughest Covid-19 curbs caps a year that saw the virus inflict a bigger hit on London’s job market than other regions. The city, which accounts for more than one-fifth of the U.K. economy, is also seeing global banks shift some people and assets to other European countries. Figures published Thursday by the Institute for Fiscal Studies showed that consumer spending in London was still 10% below its pre-crisis level in November.

5. U.S. Jobless Claims Jump to Highest Levels in Three Months

Applications for U.S. state unemployment benefits unexpectedly jumped to the highest level in three months, suggesting the labour market’s recovery is faltering amid the surge in Covid-19 cases and widening business restrictions. Initial jobless claims in regular state programs rose by 23,000 to 885,000 in the week ended Dec. 12, Labor Department data showed Thursday. Continuing claims for state programs declined by 273,000 to 5.51 million in the week ended Dec. 5. That figure roughly approximates the number of people receiving state unemployment benefits but doesn’t include the millions of people who have already exhausted those benefits or are receiving assistance through federal pandemic jobless aid programs.

6. Credit Suisse Charged Over Money Laundering in Cocaine Ring

Credit Suisse Group and one of its former bank managers have been indicted by Swiss prosecutors over the lender’s alleged failure to prevent money laundering by a Bulgarian drug ring. The Zurich-based bank failed to take all the organizational measures that were “reasonable and required” to guard against the laundering of cash made from the sale of cocaine that was then used to buy real estate in Switzerland and Bulgaria. Swiss prosecutors can target banks criminally if they believe institutions didn’t do enough to screen clients for obvious ties to illicit activity.

7. China Lags as Thailand, Russia Rank Top Emerging Market Picks

Thailand and Russia are well placed to be among the emerging-market standouts that could beat expectations next year. That’s according to a Bloomberg study of 17 developing markets gauging their outlook for 2021 based on 11 indicators of economic and financial performance. Thailand topped the list, owing to its solid reserves and a high potential for portfolio inflows, while Russia scored No. 2 thanks to robust external accounts and a strong fiscal profile, in addition to an undervalued ruble. China scores fairly poorly given that high expectations are already baked in.

8. DoorDash Sinks After Citron Calls IPO ‘Most Ridiculous’ of 2020

DoorDash‘s shares fell on Thursday after short-seller Citron Research called its initial public offering the “most ridiculous” of the year and said the stock is worth a fraction of its current price. The stock is worth $40 a share, Citron said in a research report, citing intense competition in the market for food delivery, lack of brand loyalty from customers and potential government regulation. That would represent a 75% decline from Wednesday’s closing price. The stock fell as much as 5.1% following Citron’s comments.

9. Goldman Trading Bonus May Jump Nearly 20% This Year

Goldman Sachs is planning to boost bonuses for the trading division by up to 20% after the business reclaimed its stature as the firm’s golden goose. The fatter paychecks come on the back of a 49% jump in revenue following a sluggish decade for a group that was once the envy of Wall Street. Corners of trading, particularly in fixed income, could expect much bigger payouts. There will be a greater divergence in payouts than in previous years, with some people potentially getting pay cuts despite generating more revenue. Goldman’s bonus decisions have been a touchy topic ever since the firm’s success through the 2008 financial crisis drew public attention. But this year, banks all along Wall Street saw staggering gains, giving powerhouses more cover to share spoils.

10. U.S. to Limit Use of Chinese Power Equipment on Military Bases

The Trump administration is issuing new prohibitions on the use of Chinese power equipment on military bases, citing the need to protect the U.S. facilities from foreign adversaries. Utilities that supply military bases and other critical defence facilities will be barred from using high-voltage transformers and other so-called bulk power equipment from China under an order being issued Thursday by Energy Secretary Dan Brouillette. The order is another step in the Trump administration’s wide-ranging effort to restrict access by Huawei and other Chinese companies to Western networks and technology.