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(Bloomberg) --
The deadly coronavirus has infected more people in Europe, LVMH has taken a hit after protests in Hong Kong slowed growth in the fourth quarter and Trump says he has developed a “win-win” solution for the Middle East. Here are some of the things people in markets are talking about today.
Governments tightened international travel and border crossings with China to try to stop the spread of a coronavirus outbreak that has sickened thousands, and Germany said it had identified a cluster of local patients infected by a woman from Shanghai who had been visiting Europe. The German cases, which are being closely monitored, appear to be one of the first clusters of transmission outside of China. It’s a worrying sign for public health authorities who have taken aggressive steps to contain what for now has been mostly a Chinese outbreak. The U.S. and U.K. on Tuesday said that residents should avoid all non-essential travel to China, and United Airlines, the biggest U.S. carrier to the Asian nation, said it would cut flight service after a drop in demand. More than 4,500 people have been infected in China, and at least 100 have died, while $1.5 trillion has been wiped off global stock markets. Here’s the latest map of the outbreak.
Asian stocks looked set to follow U.S. shares and Treasury yields higher, amid efforts to contain the coronavirus and more signs of improvement in the American economy. Futures rose in Japan and Australia. Hong Kong will reopen after a holiday though flights remain limited from China amid an attempt to contain a deadly coronavirus outbreak. The S&P 500 added 1% as technology shares climbed and traders digested positive U.S. consumer confidence and home price data. Apple rose in after-hours trading after its sales forecast topped estimates. Meanwhile, the offshore yuan strengthened and elsewhere, oil rose for the first time in five days, while gold retreated.
U.S. President Donald Trump announced what he called a detailed plan for Middle East peace that provides a “win-win” solution to make Israel and the region safer, skirting complaints that the Palestinians have already rejected the proposal and didn’t take part in drafting the plan. Trump said Tuesday his plan presents a “contiguous” territory for a Palestinian state once conditions are met, including “rejection of terrorism.” The proposal opens a “transition” to a two-state solution that leaves Jerusalem as Israel’s “undivided capital,” Trump said to applause from an audience. “Today Israel takes a big step towards peace,” Trump said at the White House alongside Israeli Prime Minister Benjamin Netanyahu. But the pomp of the ceremony belied the widespread view outside the White House that the plan is likely dead on arrival. Palestinian officials weren’t consulted on the proposal and many of the details divulged on Tuesday — including Israel not having to sacrifice any existing settlements — mean it will struggle to gain traction.
LVMH’s sales growth slowed in the fourth quarter as protests in Hong Kong dented Chinese demand for the luxury giant’s products at the end of a strong year. Sales rose 8% on an organic basis, slowing from 11% in the third quarter, Paris-based LVMH said Tuesday after the close of trading. Analysts were expecting an 8.7% increase, according to a Bloomberg survey. The maker of high-end items ranging from Givenchy perfume to Veuve Clicquot Champagne has been riding high during a three-year boom led by Chinese customers. The momentum largely persisted through headwinds including a weaker yuan and slowing domestic growth. Recent political protests in Hong Kong have dissuaded shoppers from visiting the long-time luxury hub. Anti-Beijing demonstrations particularly affected duty-free retailer DFS, LVMH said. But they weren’t the only ones to be hit by protest blowback: Italy’s Salvatore Ferragamo also said Tuesday that it was hit by the turmoil in Hong Kong, with retail sales there falling more than 50% from a year earlier in the fourth quarter. The company’s overall sales for the full year also missed analysts’ estimates.
Everybody’s favorite climate-change solution has a fire problem. We’re in the middle of a battery boom, thanks to plunging prices and intensifying efforts to reduce greenhouse-gas emissions, and global production is expected to triple within the next three years, according to BloombergNEF. Energy companies are plugging more battery packs into the grid as a way to store renewable power and replace fossil-fuel plants and megaprojects are becoming the norm. But a lingering problem has long dogged lithium-ion batteries: fires that can be difficult to douse. In South Korea, a global leader in battery manufacturing and adoption, there have been at least 23 fires over a roughly two-year period, according to BloombergNEF, spooking customers and prompting a government investigation.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- Trump’s lawyers wrapped up their impeachment defense, calling on former National Security Advisor John Bolton to testify.
- A magnitude 7.7 earthquake struck south of Cuba.
- Read about the crypto mogul who’s got the ear of China’s central bank.
- The U.S. will test hypersonic missiles at five times the speed of sound.
- Here’s a rundown of all the billionaires coming together to buy Newcastle United.
- Harvard’s chemistry chief was charged with lying about his ties with China.
- The newest way to become a young Russian billionaire? Inheritance.
To contact the editor responsible for this story: Alyssa McDonald at amcdonald61@bloomberg.net
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