Five Things You Need to Know to Start Your Day
Here are some of the things people in markets are talking about.
(Bloomberg) --
U.S. stocks whipsaw investors once again. Signs of hope emerge on the trade-war front. And India’s central bank has a new leader. Here are some of the things people in markets are talking about.
Another Equity Whirlwind
U.S. stocks ended little changed after a volatile session as investors weighed the prospects for a trade deal and an agreement to fund the American government. The S&P 500 Index started out strong, took a turn down, then recovered from the day’s lows as key Senate leaders signaled a desire to avoid a government shutdown hours after Donald Trump threatened to do so in a spat over funding for his border wall. U.S. markets have been whipsawed in recent weeks as traders searched Trump’s tweets for clues about the outlook for trade talks, tried to decide if a stock selloff could prompt the Federal Reserve to pare back rate increases and evaluated economic data that signaled a slowdown may be coming. Monday’s session saw the S&P 500 Index’s biggest full reversal since Feb. 6 as it erased a 1.9 percent decline and ended 0.2 percent higher, while Tuesday saw gains as big as 1.4 percent and losses as deep as 0.6 percent.
Huawei Bail and Detention
Huawei Technologies Co. Chief Financial Officer Meng Wanzhou was granted bail by a Canadian court, allowing the executive to stay in her Vancouver home as she awaits a possible extradition to the U.S. over fraud charges. Justice William Ehrcke of the British Columbia Supreme Court agreed to release Meng after four former colleagues and friends joined her husband in pledging a combined C$10 million ($7.5 million) in cash and home equity to support her bail request. Meanwhile a former Canadian diplomat has been detained in China — a potentially explosive development in the aftermath of Meng’s arrest. The ex-diplomat, Michael Kovrig, who works now with the International Crisis Group, was reported detained in China Tuesday. Prime Minister Justin Trudeau’s government responded to questions about his case by confirming a Canadian had been arrested, though stopped short of identifying him.
Hopes on Car Tariffs
China’s openness to cutting tariffs on U.S. cars is feeding optimism about trade talks with the U.S. But recent history gives investors reason to be cautious about expecting a deal by the March 1 deadline. Shares of U.S. automakers surged Tuesday after Bloomberg News reported that China’s Cabinet will review a proposal to cut tariffs on U.S. cars to 15 percent from 40 percent, bringing the U.S. in line with what other countries pay, according to people familiar with the matter. President Donald Trump tweeted that “very productive conversations” are taking place with the Chinese, predicting “important announcements” to come.
Cash-Ban Man to RBI
India named a former bureaucrat who oversaw Prime Minister Narendra Modi’s controversial cash ban program as its new central bank chief, a day after Urjit Patel abruptly quit following disagreements with the government. Shaktikanta Das, 63, who often sought a cut in interest rates during his time at the Finance Ministry, was appointed for a three-year tenure, according to a statement on Tuesday from the Personnel Ministry. He will be the 25th governor of the 83-year-old monetary authority.
SoftBank Mulls Nvidia Exit
SoftBank Group Corp. is planning to offload its stake in Nvidia Corp. early next year as shares in the graphics chipmaker continue to slide, according to people familiar with the matter. The Japanese investor could make about $3 billion in profit from the trade, said the people, who asked to not be identified because the matter isn’t public. No final decision has been made and SoftBank may opt to keep its stake or sell only part of it, the people said. Representatives for SoftBank and Nvidia declined to comment. While SoftBank still holds an equity stake in Nvidia, it has constructed a so-called collar trade of about $6 billion, the people said, which allows investors to amass stakes while protecting themselves against a decline in stock prices. SoftBank has structured equity trade deals with investment banks to hedge against a drop in Nvidia’s share price, the people said.
What we've been reading
This is what’s caught our eye over the last 24 hours.
- The EU digs in on Brexit.
- Nomura lists nine "gray swans" that could hit the market in 2019.
- Malaysia plans to rescue an Islamic pilgrimage fund.
- Crypto fan Mike Novogratz explains why he's still all-in.
- Elon Musk wants to open a Tesla store in South Africa.
- Emerging-markets have has a new "wild child" in currencies.
- Preparing for the Apocalypse with Montreal's most infamous chefs.
To contact the editor responsible for this story: Boris Korby at bkorby1@bloomberg.net
©2018 Bloomberg L.P.