Five Things You Need to Know to Start Your Day
U.S. and China reach a truce on trade, which may buoy Asian markets; Tesla to sell a $78,000 model as shareholders urged to split chairman's role from Musk; and FOMC minutes to be released as yield curve remains in focus. Here are some of the things people in markets are talking about.
The Trump administration won’t impose tariffs on Chinese products for now, after the two nations made progress on trade issues during two days of talks, Treasury Secretary Steven Mnuchin said. President Donald Trump has threatened to impose tariffs on as much as $150 billion in Chinese imports to punish Beijing for allegedly violating American intellectual property and unfair trade practices. China vowed to retaliate with tariffs on everything from soybeans to airplanes. Mnuchin’s comments came after the two nations on Saturday released a joint statement in which China proposed to “significantly increase purchases” of U.S. goods.
Tesla’s $78,000 Model
Elon Musk’s Model 3, once touted as Tesla’s $35,000 car for the masses, can now set a buyer back almost $80,000. Musk unveiled specifications for a faster and more powerful version of the Model 3 in a series of tweets over the weekend. It will cost $78,000, more than double the $35,000 base-model starting price discussed into the run-up before the electric car’s deliveries started last year. Meanwhile, Tesla shareholders are being urged to support a proposal to split the role of chairman and chief executive officer -- jobs now held by Musk.
Japan trade data and Thailand GDP kick off the economic calendar. The U.S. Federal Reserve’s take on inflation and the yield curve will be the focus of the May FOMC meeting minutes amid the burgeoning question of whether the 30+-year bull market in bonds is really, truly, finally kaput. As the week grinds on we will also get a slew of flash PMIs for Europe and the U.S., as well as CPI data for Malaysia and Singapore, a Bank of Korea rates decision and Australian construction work done.
Stocks to Gain
Asian stocks may rally at the open after S&P 500 futures jumped as a trade war between the U.S. and China appeared to have been averted for now. U.S. indexes closed lower Friday. Ten-year Treasury yields dropped under 3.1 percent amid mixed trade signals between the U.S. and China. Dollar bulls were rewarded with a fifth week of gains, though the kiwi bucked the trend. Brent crude held below $80 and gold halted a slide.
China’s Wealth Gap
While residents in Shanghai and Beijing are almost as well off as those in Switzerland by some income measures, parts of the country live more like they were in Guatemala. The economic might of the mainland’s 31 provincial-level territories ranges from rust-belt areas in the northeast to farming areas in the central plains to Silicon Valley wannabes sprouting up in support of companies such as Alibaba Group Holding Ltd., Tencent Holdings Ltd. and Huawei Technologies Co. At the high end are the municipalities of Shanghai and Beijing. Gross domestic product per-capita adjusted for purchasing power -- one measure of average incomes -- were slightly more than $53,000 last year. At that level, in fact, those districts would rank among the top 10 of all countries with populations of at least 3 million people, according to Bloomberg analysis of data sourced from the International Monetary Fund and China’s National Bureau of Statistics.
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