Five Things You Need to Know to Start Your Day
(Bloomberg) -- China plans to reduce duties on imports, U.S. markets notch new highs, and Shinzo Abe wins again. Here are some of the things people in markets are talking about today.
Import tax cuts
China is planning to cut average tariff rates on imports from the majority of its trading partners as soon as next month, according to people familiar with the matter. The move that would help lower costs for consumers as a trade war with the U.S. deepens, though it’s not yet clear how the planned reduction would affect imports from the U.S. (if at all). Those details may only emerge once the government outlines which products will enjoy lower tariffs. Elsewhere in trade news, the Trump Administration said it hasn’t established a process for companies to get exemptions from the 10 percent tariffs it’s imposing from Sept. 24 on $200 billion worth of goods, in a departure from earlier rounds of duties.
(Ecstatic) overnight markets
News of China’s planned import tax cuts helped boost U.S. stocks to new highs overnight, with the benchmark S&P 500 soaring to a record close and logging its biggest gain in over a month. The Dow Jones Industrial Average also reached a new pinnacle, with 28 of 30 constituents flashing green. That index is the last of the four U.S. equity benchmarks to hit record highs this year, raising hopes that the rally is broadening even after 9 ½ years. Watch fixed income though. With the yield on the U.S. 10-year note staying above 3 percent and money markets rates about to become competitive for the first time since 2008, there’s a risk that investors start reevaluating their portfolios.
Abe wins again
Japanese Prime Minister Shinzo Abe won his third straight three-year term as head of the ruling Liberal Democratic Party on Thursday, taking him a step closer to becoming the country’s longest-serving premier. The victory clears the way for Abe to carry on championing the ultra-loose monetary policy that has helped Japan achieve its strongest period of economic growth since the 1990s. Japan bulls are also celebrating, as the Topix has roared back to life, with the market posting its best five-day rally in almost two years. We’ll also get Japan’s latest inflation data at 7.30 a.m. Hong Kong time later today.
Samsung Electronics Co. wants to curtail growth in memory-chip output next year to keep supplies tight amid an expected slowdown in demand, people familiar with the plans said. The move would help support semiconductor prices, currently the biggest and most profitable business for the company. Samsung now expects bit growth of less than 20 percent for dynamic random-access memory (DRAM) and a rise of 30 percent for Nand flash, compared to an earlier forecast interest of 20 percent and 40 percent, respectively.
Pot stock less high
What’s Bitcoin next to bud? Cannabis is the new crypto, with Marijuana Inc. making more headlines than Crypto Corp. as the stocks of companies linked to pot get caught up in a mania that’s sent prices surging. There are signs, though, of investor fatigue. Tilray Inc., which notched two consecutive double-digit surges earlier in the week, fell 17 percent on Thursday. Despite the pullback, the company is still worth about $17 billion — making it the king of the nascent pot industry.
What we've been reading
This is what's caught our eye over the last 24 hours.
- In Asia’s Hamptons, the ultra-wealthy party all year round.
- A Chinese dream to reach Britain's high street ends with a crash.
- Hedge fund managers that drive flashy cars make riskier trades.
- Singapore wants to tackle fake news.
- A four-bedroom home is worth $446 million in Hong Kong.
- Companies are rushing to get goods out of China before the tariffs start.
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