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U.S.-China trade talks end with no major progress, Alibaba outguns its tech-giant rivals, and emerging markets may pay the price for President Trump’s fresh troubles. Here are some of the things people in markets are talking about.
U.S.-China Trade Talks End
Closely watched trade talks between the U.S. and China wrapped up on Thursday with no major progress, setting the stage for further escalation of the trade war between the world’s two largest economies. The two sides had met low expectations for this week’s meetings and no further talks had been scheduled, a person familiar with the discussions said. The person, who requested anonymity to discuss the private deliberations, also said Chinese officials had raised the possibility that no further negotiations could happen until after November’s mid-term elections in the U.S. The conclusion of the talks came just hours after Beijing and Washington rolled out their latest round of tit-for-tat tariffs on Thursday.
Jack Ma’s Spending Spree Pays Off
Alibaba reported its fastest pace of growth in more than four years by wringing more revenue from newer arenas such as cloud computing and entertainment, avoiding the disappointments that hit rival tech giants. Billionaire Chairman Jack Ma’s free-spending ways helped the e-commerce heavyweight side-step a Chinese economic slowdown and best its rivals this earnings season. Arch-foe Tencent posted its biggest profit drop in a decade after it ran afoul of regulatory tangles, while internet stalwarts from Facebook to Twitter grappled with fundamental issues such as waning user growth. Shares of Alibaba rose as much as 4.9 percent before closing down 3.2 percent. Though investors cheered the result, plus more than $3 billion in new funding for its newly acquired food delivery arm, broader trade concerns loomed over the markets.
Emerging Markets May Pay for Trump’s Troubles
Donald Trump’s in trouble and emerging markets may pay the cost, according to some of the world’s largest money managers. Facing an increasingly grim legal and political landscape, the president is likely to double down on his strategy to distract from domestic concerns by fixing his focus abroad, said John Normand, JPMorgan Chase & Co.’s head of cross-asset fundamental strategy in London. That could escalate his push for higher tariffs on $200 billion in Chinese imports, among other things. "EM was already under some pressure due to the Fed removing liquidity, rising rates and some idiosyncratic issues. Then Trump is exacerbating the situation,” said Chris Diaz, a money manager at Janus Capital Management. Emerging-market currencies dropped Thursday after a tweet by Donald Trump fueled speculation of possible sanctions against South Africa.
Turnbull Awaits His Fate
The fate of Australia’s embattled Prime Minister Malcolm Turnbull is likely to be decided Friday as rivals seek enough signatures to force a vote on his leadership. Amid a flurry of ministerial resignations Thursday, Turnbull said he would call a special meeting of the governing Liberal party at noon on Friday only if his main challenger – right-wing populist Peter Dutton – can gather enough signatures on a petition. As of Thursday night, Dutton appeared to be short of the 43 names needed. Turnbull said he wouldn’t contest a leadership vote, with reports saying Treasurer Scott Morrison and Foreign Minister Julie Bishop would challenge Dutton. The crisis has started to hit the nation’s financial markets, with the local dollar weakening as much as 1.5 percent against the greenback on Thursday.
Pompeo Taps Ford Executive for North Korea Talks
Secretary of State Michael Pompeo tapped a Ford Motor Co. executive to lead talks with North Korea as the U.S. seeks to ensure that tough international sanctions imposed last year remain in force. Ford’s former head of government affairs, Steve Biegun, “will lead negotiations and spearhead diplomatic efforts with our allies and partners” as the U.S. special representative for North Korea, Pompeo announced on Thursday. “He and I will be traveling to North Korea next week to make further diplomatic progress towards our objective.” Pompeo doesn’t have plans to meet North Korean leader Kim Jong Un on the trip, State Department spokeswoman Heather Nauert told reporters Thursday. Asked when the secretary and Biegun will leave for Pyongyang, she just said it would be “relatively soon.”
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Opinion: Maybe Xiaomi’s future really is in smartphones.
- Tencent needs some help from Fortnite.
- The U.S. Senate is signaling its first interest in investigating Michael Cohen’s claims on Trump.
- Will the stock market sink if Trump is impeached? Analysts weigh in.
- Here’s a primer on the deadly virus killing Chinese pigs.
- Elon Musk has hired Morgan Stanley to assist in a potential bid to take Tesla private.
©2018 Bloomberg L.P.