Five Things You Need to Know to Start Your Day
Trump looks to keep China Mobile out of America, Pompeo is off to North Korea, and Bitcoin gets the second half started on a high note. Here are some of the things people in markets are talking about.
Trump Moves Against China Mobile
The Trump administration moved against letting China Mobile Ltd. enter the U.S. telecommunications market, saying the government-owned company would pose national security risks. The Federal Communications Commission should deny China Mobile’s application, submitted in 2011, a branch of the Commerce Department said in a filing distributed by email on Monday. In quarrels over trade this year, U.S. officials have alleged that China engages in widespread theft of intellectual property. Washington is set to impose tariffs on $34 billion of Chinese goods on Friday, and another $16 billion may follow. China has vowed to retaliate in kind.
Pompeo Heads to North Korea
U.S. Secretary of State Mike Pompeo will travel to North Korea on Thursday to continue talks with Kim Jong Un’s government on nuclear disarmament, the White House said Monday, even as new questions have been raised about Kim’s intentions. Pompeo’s visit follows the historic summit between Kim and President Donald Trump in June. Pompeo, making his third trip to North Korea, will seek answers after independent researchers and news media detailed North Korean efforts to increase fuel production, build more missile launchers and expand a key rocket-engine manufacturing facility.
China’s Slowdown Worsens
Chinese economic data are underwhelming, and credit growth is slowing. The latest sign: a gauge of export orders tumbled into contraction in June. For many China watchers, the weakness means it's reasonable to view the sharpest slide in the yuan since a 2015 devaluation as a natural response to broad dollar strength and economic fundamentals, rather than an active tool being wielded by Beijing as trade tensions increase. The smartest stabilization policy might be to embrace a more accommodative fiscal stance, especially at the national level, rather than ease monetary policy.
Philippine Stocks Are Looking Cheap
Unfazed by a foreign-led selloff that wiped out about $55 billion in Philippine stocks, some local individual investors are seeing opportunities to buy. All seven brokerages surveyed by Bloomberg said investors are dipping their toes in the Philippine stock market with cautious optimism. The Philippine Stock Exchange Index tumbled 9.9 percent in the second quarter, buffeted by a weakening peso, quickening inflation, and the trade standoff between the U.S. and China, not to mention the general selloff in emerging markets. The benchmark stock gauge entered a bear market in June, with valuations sinking to their lowest level in 29 months.
Bitcoin Bounces Back
Bitcoin rallied to start July, giving a positive jolt to a digital-coin market that had lost about half of its value since early May. The largest cryptocurrency climbed more than 12 percent to $6,620 from Friday, in its biggest increase since April, according to composite prices compiled by Bloomberg. The token’s largest peers -- Ripple, Ethereum and Litecoin -- climbed between 10 and 15 percent. The bounce began during weekend trading and spiked further in the U.S. morning. The positive start to July follows a selloff in June, when crypto investors parsed a flood of comments from policymakers across the globe, looking for any evidence they may crack down on peer-to-peer money.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- China is zooming to a record year of corporate-bond defaults.
- Russia’s central bank is loading up on yuan.
- The resurgent dollar is proving no match for the yen.
- A $6 billion China startup wants to be the Amazon of health care.
- Sydney housing prices are falling the most since the global crisis.
- Deutsche Bank makes a bet on India.
©2018 Bloomberg L.P.