Five Things You Need to Know to Start Your Day
Not much hope for a trade resolution at Trump-Xi meeting, IBM’s biggest-ever purchase and markets remain nervous going into end of the month. Here are some of the things people in markets are talking about today.
China’s state-sponsored push to dominate technologies of the future looms as one of the biggest stumbling blocks to prospects for resolution to the U.S. trade war. Officials from both sides are pessimistic about chances for a breakthrough when Donald Trump and Xi Jinping meet on the sidelines of the Group of 20 summit in Buenos Aires on Nov. 30-Dec. 1. While Trump is still dangling the threat of additional levies, Xi is digging in for a protracted conflict by cushioning the impact on growth and showing no signs he’s willing to compromise plans to march up the value chain. While officials in Beijing have sought to downplay the significance of the Made in China 2025 plan to dominate industries from robotics to new-energy vehicles and aerospace and said it’s open to foreign firms too, they’ve shown no willingness to abandon the goals. Meanwhile, China’s economic growth continued to slow in October.
IBM agreed to acquire software maker Red Hat Inc. in a $33.4 billion bet on jump-starting its efforts to catch up in the cloud. International Business Machines Corp. will pay $190 a share in cash for Raleigh, North Carolina-based Red Hat, according to a statement from the companies Sunday, confirming an earlier Bloomberg News report. That’s a 63 percent premium over Red Hat’s closing price of $116.68 per share on Friday. In its third-quarter results, IBM disappointed investors who were seeking more progress in the areas of the cloud, artificial intelligence and security software after six years of declining sales that had only started to show gains earlier this year.
There will be a flurry of heavyweight economic events and plenty of key earnings releases this week. Companies reporting include Facebook, Mastercard, Coca-Cola, General Electric, Sony, Samsung, Apple, Alibaba, Exxon Mobil, PetroChina, Macquarie Group and HSBC. The Bank of England and Bank of Japan announce rate-policy decisions. After raising rates in August the BOE is expected to stand pat, while the BOJ is also expected to maintain its policy settings. Apple hosts a new product event at which it’s likely to introduce iPad Pros that use facial recognition to unlock, and new Macs. Asia will get Japan retail sales and China manufacturing PMI, which will show whether U.S. sanctions have started to bite. U.S. jobless claims are also out this week.
Asian stocks looked set to begin the week in mixed fashion after a rout in global equities dragged regional shares into a bear market and as turmoil tests the Federal Reserve’s confidence in tighter policy. Futures on equity gauges in Japan and Australia indicated declines when trading starts, while Hong Kong and China may nudge higher. The S&P 500 finished on Friday just short of a 10 percent decline from its record September high and remains on pace for the worst month since 2009. Treasuries were well bid last week, dragging the 10-year yield back down to 3.08 percent after setting a seven-year high of 3.26 percent earlier this month. The offshore yuan slipped and remains near to the lowest level in a decade. Brazilian assets will be in focus as voters are expected to usher in an era of hard-right politics.
Thai Billionaire in Crash
Vichai Srivaddhanaprabha, the chairman of Leicester City, was on a helicopter that crashed outside the English Premier League soccer club’s King Power Stadium, according to the BBC. The chopper, owned by Vichai, got into problems shortly after takeoff and slammed into a nearby parking lot, bursting into a ball of flames, according to multiple reports. Vichai is worth $3.3 billion, according to the Bloomberg Billionaires Index. Most of his wealth derives from King Power Group, which he developed into Thailand’s biggest duty-free company. He also controls 4 percent of AirAsia, the region’s biggest discount carrier.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Brazil’s far-right candidate takes strong lead in vote.
- Sri Lanka’s political crisis deepens.
- Watch Japan for Brazil investors’ verdict.
- Bond traders doubt Fed's rate path as stocks tank.
- U.S. earnings season flop leaves few stock saviors.
- Powerful Typhoon Yutu bears down on the Philippines.
- PlayStation’s best-ever cycle.
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