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U.S.-China Trade talks are going nowhere fast, American retail sales plummet, and Trump is set to declare an emergency on the border. Here are some of the things people in markets are talking about.
U.S.-China Said to Be Far Apart on Trade
The U.S. and China have made little progress so far during trade talks in Beijing, leaving much work to be done before President Donald Trump and his counterpart Xi Jinping look to seal a deal at a yet-to-be scheduled summit, according to people familiar with discussions. In closed-door sessions, the sides have failed to narrow the gap around structural reforms to China’s economy that the U.S. has requested, even as both seek to avoid an increase in tariffs after March 1, according to three U.S. and Chinese officials who asked not to be identified because the talks were private. The U.S. has not relented on demands for China to dial back government subsidies for state-owned enterprises and improve corporate governance, one of the people said, an extremely sensitive issue that is seen as a non-starter for Chinese leaders.
Stocks Fade Into Close
Asian share appear set to open mixed after U.S. stocks edged lower in listless trading. Disappointing economic data and reports the president will declare a national emergency overshadowed news that another government shutdown will be averted. The S&P 500 Index fell, with a late-session drop sealing the decline initially sparked by a disappointing -- and contested -- report of the worst drop for retail sales in nine years. Initial jobless claims also came in higher than estimated. Bank stocks were among the hardest hit, as the 10-year Treasury yield briefly sank below 2.65 percent. Consumer staples also fell: Coca-Cola saw its biggest loss in 10 years after a disappointing forecast. On the positive side, energy companies advanced as crude prices climbed.
Trump to Sign Border Bill, Declare Emergency
The Senate passed a spending bill to avert another government shutdown that gives Trump less than he demanded for a border wall, after the White House said he’ll sign the measure and declare an emergency to get additional funds for the barrier. In a 83-16 vote Thursday, senators agreed to provide $1.375 billion for 55 new miles of fencing on the U.S.-Mexico border, far short of the $5.7 billion the president sought. The House plans to vote on the measure later in the evening, and it needs Trump’s signature to avoid the closure of one-fourth of the government after Friday. Lawmakers of both parties said they wanted to avoid a repeat of a 35-day partial closure that ended Jan. 25 when Trump accepted a short-term spending bill without extra wall funding to give Congress time to negotiate a longer-term deal. “President Trump will sign the government funding bill, and as he has stated before, he will also take other executive action -- including a national emergency -- to ensure we stop the national security and humanitarian crisis at the border," White House spokesman Sarah Huckabee Sanders said in a statement.
Hedge Funds Playing Tug-of-War With Aussie
Hedge funds are ratcheting up wagers on the Australian dollar -- in both directions -- after it became the most-volatile Group-of-10 currencies in the past month. “It’s one of the best times to trade,” said Nader Naeimi, who has short positions on the currency at the dynamic market fund he manages at AMP Capital Investors Ltd. “A lot of the good news is priced in the Aussie now so there’s room for disappointment. That said, it’s still so influenced by risk-on, risk-off sentiment so it gives you room to trade.” Geoff Wood, head of macro and risk at Morphic Asset Management in Sydney, said he’s selling the Australian dollar when it climbs to 72 U.S. cents and buying it back when it dips into the high 60 U.S. cents range. Brett Gillespie, a macro trader at Ellerston Capital Ltd., recently closed out some short Aussie versus Singapore dollar trades that he used to neutralize the risk to his fund from a potentially positive U.S.-China trade outcome.
Spain on Brink of Elections
Spain is hurtling toward its third election in less than four years, with embattled Prime Minister Pedro Sanchez making an announcement Friday morning. He’s summoned his Cabinet at 9 a.m. in Madrid and will give a statement at 10 a.m., according to a text message sent by his office. Speculation is rife about elections dates, ranging from mid-April to end of May. Sanchez is running out of options to stay in power after his budget was blocked by Parliament. Talks with Catalan independence parties broke down last week, leaving him short of the support he needed to pass his spending plan for 2019.
What we’ve been reading:
This is what caught our eye over the last 24 hours.
- Real estate deals from Dublin to Dubai.
- Canada Goose says China tensions are nothing to worry about.
- U.K. parliament throws out May’s plan to renegotiate Brexit.
- Ham prices slump in the year of the pig.
- Amazon scraps plan to build a headquarters in New York City.
- JPMorgan’s crypto coin puts Ripple’s relevance in question.
- The world still doesn’t have enough places to plug in cars.
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