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Stocks jumped, pared gains and then rallied again in the late afternoon in New York after conflicting reports about the U.S.’s stance on trade with China. Here are some of the things people in markets are talking about.
Stocks Rise on Trade Talk
Asia stocks look set to advance, following shares in the U.S. after a report that said some Trump administration officials are pushing for an easing of trade tensions with China. The S&P 500 pushed above its average price for the past 50 days, a level it hadn’t breached since December, after the Wall Street Journal cited people close to discussions saying Treasury Secretary Steven Mnuchin is a proponent of easing tariffs. The Treasury denied the report. Neither Mnuchin nor U.S. Trade Representative Robert Lighthizer has made any recommendations with respect to tariffs or other parts of the negotiations with China, according to a Treasury spokesperson working with the administration’s trade team who characterized the talks as an ongoing process. Shares had advanced earlier in the session after strong data calmed concern that the world’s largest economy was in danger of contracting.
China Warns Canada on Huawei
China’s ambassador to Canada warned that excluding Huawei Technologies Co. from its next-generation wireless network will have repercussions. Speaking to reporters in Ottawa, Ambassador Lu Shaye said there is no evidence that Huawei represents a national security risk and he hopes the Canadian government will make a “wise decision” in allowing the company’s equipment to be used in so-called 5G networks. The comments came at a rare press briefing by China’s top diplomat in Canada amid escalating tensions between the two countries. Prime Minister Justin Trudeau’s envoy to Beijing said Wednesday that China’s international reputation is suffering as a result.
China, Soy and Trade
When the U.S. forged a trade truce with China last month, President Donald Trump boasted that the largest soybean importer was back to buying “tremendous amounts” of American supplies. Chicago futures rallied in the days around the accord. But in the weeks since, prices have retreated as the benefits for China become clearer. While both Chinese buyers and U.S. farmers are casualties of tit-for-tat tariffs, the truce initially was seen as a major boon for American suppliers, with expectations of about 10 million metric tons in Chinese purchases. But China is said to have bought about half that amount and, by dipping its toe back into the U.S. market, it not only generated goodwill for the trade talks, it also managed to lower the premium for soy from Brazil, its other major supplier.
Trump Denies Pelosi Plane
President Donald Trump informed House Speaker Nancy Pelosi that she couldn’t use military planes to visit U.S. troops in Afghanistan this weekend because of the partial government shutdown, telling her barely an hour before her departure that she should stay in Washington to negotiate. “In light of the 800,000 great American workers not receiving pay, I am sure you would agree that postponing this public relations event is totally appropriate,” Trump said in a letter to Pelosi, a day after she suggested he postpone his State of the Union speech scheduled for Jan. 29. Pelosi had not announced her trip, which likely would not have been made public in advance for her security. She had planned to depart Thursday afternoon, according to a person with knowledge of her itinerary. Trump’s move outraged Democrats, who questioned whether he had the authority to control congressional travel.
Kuroda Locked In
More Bank of Japan watchers see the central bank keeping policy unchanged throughout this year, underscoring growing risks to the economy and the BOJ’s inflation efforts. All but one of 50 economists said they expect the BOJ to stand pat as it concludes a two-day policy meeting on Jan. 23, according to a Bloomberg survey conducted Jan. 10-15. Only 28 percent said they expected any tightening or easing this year, down from 34 percent in a December survey. Just 16 percent now see the BOJ widening the trading range for 10-year government bonds this year, versus 32 percent in December.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- China’s high-stakes robot wars.
- Hottest cryptocurrency rekindles memories of Bitcoin bubble .
- Fed’s Quarles plays up economy’s strengths as markets see risks.
- The best cars, SUVs, and trucks at this year’s Detroit auto show.
- Manager who dodged global crisis sees 20-year bull run in India.
- This mansion could be yours for just $23 million.
To contact the author of this story: Randall Jensen in New York at rjensen18@bloomberg.net
To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net
©2019 Bloomberg L.P.
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