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Investors turned their attention to tech woes, earnings and M&A news Thursday, while the U.S. Treasury is considering using emergency powers to curtail Chinese investment in sensitive technologies. Here are some of the things people in markets are talking about.
U.S. Treasury May Curb China Tech Investment
The Treasury Department is considering using an emergency law to curb Chinese investments in sensitive technologies in the U.S., said Heath Tarbert, an assistant secretary in Treasury’s international affairs office. The investment curbs would be the latest step in President Donald Trump’s plan to punish China for what the U.S. sees as violations of American intellectual-property rights. The president asked Treasury Secretary Steven Mnuchin to consider investment restrictions on Chinese firms after the administration released the results of its probe into China’s IP practices last month.
Metals Rally Falters
The relentless rally in metals took a breather, with aluminum falling from a seven-year high. The commodity posted its first loss in four days amid speculation Russia will come to the aid of United Co. Rusal amid U.S. sanctions, easing supply concerns. A rout in tech stocks dragged on U.S. benchmarks, while a supply-induced selloff in European debt sent Treasuries tumbling. Ten-year yields reached 2.93%, within a couple basis points of the year’s high set in February. The dollar tracked the climb in yields, advancing to its strongest level in almost two weeks. Euro-Swiss franc topped 1.20 for the first time since January 2015, while the pound slid after Bank of England Governor Mark Carney said that the BOE has yet to decide on when to raise interest rates.
Taiwan Semi's Outlook Drags on Apple
Apple and a slew of chipmakers fell Thursday after Taiwan Semiconductor issued a tepid growth forecast that rekindled concerns the handset boom is waning. The world's largest chipmaker forecast revenue of $7.8 billion to $7.9 billion, falling short of the $8.8 billion estimate. TMSC's earnings are a key indicator for demand in a world where chipmakers and electronics manufacturers increasingly outsource costly production.
Wheelings and Dealings
Qualcomm reapplied for approval from China's Ministry of Commerce for its acquisition of NXP Semiconductors. China's Mofcom said Thursday the deal would have a substantial impact on the tech industry and may have negative effect on the market. The moves come amid increasing trade tensions between the world's two largest economies. In health care, Shire rejected a $60 billion offer from Takeda Pharmaceuticals, but said it would evaluate any further proposals from the Japanese company.
Philippine Stocks Crushed While Malaysia Soars
Problems keep piling up for Philippine stocks, the world’s worst performers this year. The benchmark index fell as much as 3.3% Thursday as mounting inflation pressure and concern the economy is overheating spur speculation the central bank will need to tighten more aggressively than previously thought. The nation’s peso, Asia’s worst-performing currency this year, is also worrying investors. Meanwhile, in Malaysia, foreign inflows have helped send the country’s benchmark index to an all-time high ahead of general elections May 9.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- As bitcoin slumped, these crypto hedge funds made money.
- In Australia, AMP's chief executive officer Craig Meller has stepped down.
- Can China’s financial reforms transform the country?
- Oops. Deutsche Bank inadvertently sent $35 billion to Deutsche Boerse account.
- Korean Air Lines is under fire after chairman's daughter's "water rage" incident.
- A Russian billionaire lost his $492 million yacht in a divorce ruling.
- Is Tesla’s time running out?
--With assistance from Garfield Clinton Reynolds
To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net.
©2018 Bloomberg L.P.