(Bloomberg) --
U.S. stocks tumble as recession fears grow. Ten weeks of protests have clobbered Hong Kong’s economy. And Tencent disappoints. Here are some of the things people in markets are talking about today.
Recession Fears
Stocks in Asia are poised to join a global sell-off after U.S. equities tumbled and a closely watched part of the Treasury yield curve inverted, raising recession fears and spooking investors. Futures indicated losses of more than 2% in Japan. The S&P 500 tumbled almost 3% on Wednesday as the 10-year Treasury rate slid below the two-year for the first time since 2007. The 30-year yield fell to the lowest on record. Gold surged and crude oil slumped.
The Hit
Ten straight weeks of anti-government protests in Hong Kong are taking a sharp toll on an economy already hit by the U.S.-China trade war. Global brands from Walt Disney to Prada have warned of the impact, airlines have canceled hundreds of flights after protests at the airport, hotels are in crisis mode, and more than $600 billion of stock market has been erased since early July. And still the protests show no sign of easing. Here’s how hard the protests are slamming Hong Kong’s economy.
Unlikely Champion
When a popular Australian breakfast television show recently referred to unemployed people as “dole bludgers,” the social-media backlash from outraged viewers was telling. A wave of tweets showed unexpected and widespread support for jobless people struggling on benefits that haven’t risen above inflation for 25 years, adding momentum to a campaign to increase welfare payments. RBA governor Philip Lowe voiced support for the measure, arguing that an increase could help boost the slowing economy. But there’s one crucial opponent — the government, which argues jobs are there for those who need them and the economy doesn’t need more stimulus.
Disappointing Earnings
On the earnings front, Tencent looks to be caught up in the China slowdown, posting disappointing revenue growth after rivals like ByteDance sapped advertising. The social media giant is trying to bounce back from a horrendous 2018, when a regulatory clampdown walloped its marquee games business. Elsewhere Cisco gave a lackluster forecast that indicated the U.S.-China trade dispute and a slowing global economy are leading companies to hold off on updating computer networks. And in retail land, Macy's dragged other department stores lower after slashing its full-year profit forecast by 20 cents.
Mas y Menos
Argentina's peso and bonds lost yet more ground Wednesday as President Mauricio Macri tried to win back voters' hearts with tax cuts and wage hikes. The smoke has yet to settle on the eye-popping rout, but a picture of the biggest losers is emerging. Pimco holds 30% of a $2.4 billion government note maturing in June that's tumbled 18% since Friday. And star bond manager Michael Hasenstab saw a combined $1.8 billion loss at the 10 funds he manages for Franklin Templeton. One winner: Emilio Botto’s BNP Paribas Asset Management Argentina, which soared 21% in local currency terms and outperformed more than 450 portfolios tracked by Bloomberg.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- China traders love Hong Kong's sinking stocks as protests rage on
- Indonesia's trillion dollar economy is about to get a reboot
- The world’s gadget makers are splitting along U.S.-Chinese lines
- India’s richest man is turning cautious. That’s a bad sign
- We’re killing the world’s plants faster than we thought
- Secretive brother runs side bets for $58 billion Chanel empire
- The Epstein tapes: unearthed recordings from his private island
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