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New U.S. economic data show the trade war is set to drag on growth. Meanwhile, Donald Trump doubled down on his “America First” approach at the United Nations, and Elon Musk is sued by the SEC. Here are some of the things people in markets are talking about.
About That Trade War…
Fresh data on the U.S. economy show President Donald Trump’s escalating trade war is shaping up as a clear drag on growth this quarter. The merchandise-trade deficit unexpectedly grew in August to $75.8 billion, the widest in six months and close to a record, as exports of food, industrial supplies and autos declined, Commerce Department data showed Thursday. A separate report from the department signaled corporate investment took a breather. Economists at JPMorgan Chase & Co., Amherst Pierpont Securities and Capital Economics trimmed their estimates for third-quarter gross domestic product. Separately, DHL's global trade barometer weakened this month, dropping to the lowest since 2016 and indicating a slower pace of growth in the months ahead.
A Split Over North Korea
The divide over the future of North Korean sanctions dominated a UN Security Council meeting on Thursday just a few weeks before America’s top diplomat visits Pyongyang to press the country’s leaders for swifter progress toward denuclearization. The foreign ministers of Russia and China called on the Security Council to ease sanctions, an idea that met strong resistance from U.S. Secretary of State Michael Pompeo and underscored the challenge the Trump administration will face keeping up pressure on Kim Jong Un’s regime.
Emerging Asia Feels Fed Pain
The turmoil that’s rocked emerging markets this year is spreading from bankers and traders to bakers and tradesmen, dampening growth prospects for some of Asia’s fastest-growing economies. India, Indonesia and the Philippines share a common weakness-- current account deficits -- leaving them reliant on global investors. While the three still boast robust economic growth, foreign currency buffers and manageable debt levels, their central banks have been forced to raise interest rates to head off inflation and defend tumbling currencies as the Federal Reserve continues to move away from crisis settings.
Defiant Trump Wraps Up UN Meetings
President Trump arrived at the UN this week looking to rally global support against Iran and show that his policies on North Korea were lowering the risk of nuclear war. By Wednesday, he made clear he didn’t care whether he persuaded anyone. After doubling down on his “America First” approach, he’ll leave New York with allies and adversaries as frustrated as ever with the U.S. over issues from trade to climate change to Iran’s nuclear program. Also, after hailing his personal bond with Xi Jinping over the past 18 months, Trump told reporters that their friendship might be over. He also claimed that he had evidence of Chinese meddling in the U.S. midterm elections and warned countries to “resist socialism.”
Tesla Tanks as Elon Musk Sued by SEC
Tesla Inc. Chief Executive Officer Elon Musk was accused by the Securities and Exchange Commission of misleading investors when he tweeted that he had funding lined up to take the company private. The agency said Musk fabricated the claim in his August tweet, which sent Tesla shares higher. The suit seeks an order from a judge barring Musk from serving as an officer or director of a public company, a request often made in SEC lawsuits, as well as unspecified monetary penalties. Shares tumbled more than 10 percent in after-hour trading.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Expanding U.S. development funding is a good idea.
- U.S. Supreme Court nominee Kavanaugh and his accuser testify.
- He's "the leading authority on China."
- Where to get the best in-flight Wi-Fi.
- The next Bitcoin bull run may be on the horizon.
- Crypto and cannabis are the perfect post-crisis bubbles.
- The $100 billion blitz on Sand Hill Road.
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