Five Things You Need to Know to Start Your Day
Markets were muted as Trump called into question the June summit with North Korea and expressed disappointment with Chinese trade talks. Here are some of the things people in markets are talking about.
Trump Casts Doubt on Kim Summit
U.S. President Donald Trump cast doubt Tuesday on the meeting he is to have with North Korean leader Kim Jong Un on June 12 in Singapore. “There’s a chance, a very substantial chance, it won’t work out,” Trump said during an Oval Office meeting with South Korean President Moon Jae-in. “I don’t want to waste a lot of time, and I’m sure he doesn’t want to waste a lot of time,” he said. Moon’s visit to the White House comes amid renewed uncertainty about Kim’s intentions.
President Not Pleased With China Talks
The U.S. president said he is “not really” pleased with the results of U.S. trade talks with China so far. He also said that as a favor to President Xi Jinping he is reconsidering penalties that have shut down ZTE Corp., and instead may require the Chinese telecommunications company to appoint a new board of directors and pay a fine of perhaps $1.3 billion. Asked about the company, Trump said there is no deal yet with China, but it wasn’t clear whether he was speaking about ZTE specifically or about trade disputes. China has decided to cut the import duty on passenger cars to 15 percent from 25 percent.
Hon Hai’s Foxconn Unit Files to Raise as Much as $4.3 Billion
Foxconn Industrial Internet Co. plans to raise up to 27.1 billion yuan ($4.3 billion) selling stock in an IPO, the largest mainland Chinese debut since the 2015 stock market crash in Shanghai. Shares will be offered at 13.77 yuan apiece, valuing the company at about $43 billion. The smart-factory unit of Hon Hai Precision Industry Co. will float 1.97 billion shares in Shanghai, it said in a filing with the Shanghai Stock Exchange. It’s part of a push by billionaire Terry Gou to position the company even more centrally in the global tech supply chain and lessen its dependence on Apple Inc. for more than half its revenue.
Chinese Call for a Baby Boom
China hasn’t even abandoned all its decades-old birth-control policies and some executives and academics are already calling for new programs to encourage bigger families. High costs and a shortage of day care centers in China can act as birth control all by themselves. “Only by fully removing birth limits and encouraging births will it be possible for China to reverse its population decline,” Liang Jianzhang, chairman of the travel site Ctrip.com, and Huang Wenzheng, a researcher with the Center for China and Globalization, in Beijing, wrote in an op-ed Tuesday on the 163.com news portal. They were responding to a Bloomberg News report Monday that China was considering scrapping the last remnants of its population control policy. “The cry for a total abolition of birth restrictions has been there for years, but resistance is strong,” economist Ma Guangyuan wrote to his 2.6 million Weibo followers in a post that was later deleted. “In fact, even now, lifting the birth limits is too late.”
Markets Muted Ahead of Fed Minutes
As Hong Kong and South Korea return from a day off, we will see what traders made of Tuesday's grim pickings. Italian and emerging-market risks have weighed on markets, which were muted in the U.S. after Trump called into question a summit with North Korea. The dollar fell with Treasuries, as the greenback’s correlation with yields threatens the currency’s five-week rally. The Turkish lira sank to yet another record low, and sterling strengthened on speculation there could be another U.K. election. Emerging-market shares advanced, halting a three-day decline. Wednesday in the U.S., the Fed will release minutes from its last meeting.
What we’ve been reading
This is what’s caught our eye over the last 24 hours.
- Malaysia’s debt problem is worse then previously disclosed.
- These six Chinese cities dominate the market for electric vehicle sales.
- Chinese fentanyl is creating a new era of drug kingpins.
- Xiaomi expands into Europe with first store in Paris.
- Bloomberg View: Ending birth limits won’t create a baby boom in China.
- Mark Zuckerberg says he’s sorry.
- State Bank of India’s $1 billion loss signals a “happy year.”
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