Five Things You Need to Know to Start Your Day

(Bloomberg) --

U.S. stocks surge into the close, China’s efforts to break free of debt-fueled stimulus are being put to the test, and Trump looks to end birthright citizenship. Here are some of the things people in markets are talking about.

U.S. Stocks Rebound

U.S. stocks ended a tumultuous day sharply higher, with all major averages rising at least 1.4 percent as volatility continues to grip equity markets during earnings season. Treasuries fell and the dollar rose. The S&P 500 Index twice erased gains that topped 1 percent before finally securing a rebound in the final hour of trading. All 11 main groups rose, with consumer and commodity shares pacing gains. The average flirted with a correction earlier Tuesday and is still down more than 8 percent in October, on track for its worst month of the bull market. Facebook edged higher in after-hours trading following its earnings report. Ahead in Asia, the Bank of Japan is expected to keep monetary policy unchanged, China releases official PMI figures for October, while Japan and South Korea report September industrial production. Australia also has third quarter CPI data, and Samsung reports earnings.

Can China Break Free of Big Stimulus?

China’s attempt to break free from the debt-financed stimulus of the past is being stress tested by Donald Trump. As the White House threatens tariffs on everything the U.S. imports from China, policy makers in Beijing are cushioning the economic blow with tax cuts, regulatory relief and investment incentives, rather than the kind of spending and monetary binge seen in 2008 and 2015. Separately, Singapore’s sovereign wealth fund boss named credit excesses and the property market as two of the biggest challenges facing China.

Yuan Risks

Speaking of 2008 and China, that year was the last time the yuan was this weak. How much further it will slide may depend in large part on whether Beijing can keep capital outflows under control. Official figures released over the past few weeks suggest money is increasingly leaving China’s borders, a reminder that motivated citizens and companies still have ways to get their cash out despite a tightening of capital controls after the country’s shock devaluation in 2015. While there’s little to suggest a stampede for the exits is imminent, the risk increases with every tick lower in the yuan.

Apple’s Overhaul

Apple Inc. overhauled two of its oldest Macs after sales of the company’s personal computers fell to the lowest point since 2010 last quarter. On Tuesday in Brooklyn, New York, the technology giant debuted a new MacBook Air with a sharper screen and redesigned the Mac mini desktop with a focus on professional users. Apple also launched new iPads, showing the company continues to spread its bets with gadgets beyond the key iPhone line.

How to Be an American

President Donald Trump’s assertion that he can unilaterally end birthright U.S. citizenship is likely to meet stiff resistance in the courts. The Supreme Court said more than a century ago that, with few exceptions, the Constitution automatically grants citizenship to all children born in the U.S., even if their parents aren’t citizens. Although a handful of legal experts say Congress could pass a law to change that rule, that’s a far cry from the president’s assertion that he can do it by executive order.

What we’ve been reading

This is what caught our eye over the last 24 hours.

• Happy 10th birthday, Bitcoin.
• These charts are scaring Wall Street.
• The Fed has scoured data for signs of a robot takeover.
• India turns to eco-friendly fireworks.
• Could the anti-globalization movement hurt M&A?
• Tapestry is pursuing Chinese handbag shoppers.
• Check out Maserati's Levante GTE.

To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net

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