Five Things You Need to Know to Start Your Day
Washington levels some serious spying accusations at Beijing. American stocks sink yet again on signs of a looming government shutdown. And U.S. Secretary of Defense Jim Mattis resigns. Here are some of the things people are talking about.
The U.S. Justice Department announced indictments accusing Chinese officials of coordinating a decade-long espionage campaign to steal intellectual property and other data from dozens of companies, adding to tensions amid the trade war between the two nations. Two Chinese nationals, Zhu Hua and Zhang Shilong, were accused Thursday of coordinating with state security officials in an “extensive” hacking campaign, allegedly infiltrating 45 U.S. companies and government agencies, as well as other firms in more than a dozen countries. The indictments against the two, unsealed in federal court in Manhattan on Thursday, underscore one of the primary U.S. grievances in the ongoing trade fight between the Trump administration and Beijing: the systematic theft of U.S. intellectual property and forced technology transfers from companies doing business in China.
U.S. Stocks Pummeled
Volatility gripped financial markets a day after the Federal Reserve sent shock waves across assets, with the rising threat of a government shutdown adding to a litany of concerns buffeting equities. The dollar sank with crude oil. The S&P 500 Index whipsawed throughout the day in heavy trading before closing at a 15-month low as investors debated whether the Fed set up the central bank for a policy error. Shares turned sharply lower after President Donald Trump hardened his demands in the showdown with Congress over funding the government. The Nasdaq Composite index slumped to the brink of a bear market, finishing almost 20 percent off its August record. The S&P 500 is down more than 10 percent in December, on track for its worst month of the record bull run.
Trump insisted on funding a wall or other barrier along the southern U.S. border as tensions over a possible partial government shutdown intensified in the wake of the president’s refusal to sign a stopgap spending bill. “Any measure that funds the government must include border security, has to,” Trump said Thursday at the White House. He said that a “physical barrier” is “essential,” adding that it could be steel slats instead of a wall. Hours earlier, House Speaker Paul Ryan of Wisconsin said the president told him and other Republican leaders he’ll refuse to sign the Senate’s version of a short-term spending bill because it doesn’t include funds he’s demanded for border security. Without an agreement to fund the government by midnight Friday, nine departments including Homeland Security will close just before the Christmas holiday.
Defense Secretary Jim Mattis announced his resignation on Thursday, citing differences over policy with Trump, a day after the president abruptly called for the withdrawal of American forces from Syria. In a two-page letter to the president, Mattis laid out his convictions on the value of U.S. leadership in strategic alliances, including the North Atlantic Treaty Organization and the 74-nation coalition to defeat Islamic State. “Because you have the right to have a Secretary of Defense whose views are better aligned with yours on these and other subjects, I believe it is right for me to step down from my position,” Mattis said in the letter to Trump released by the Pentagon.
China’s Tesla Fans Rejoice
Three days after China’s Dec. 14 move to defuse trade tensions with the U.S., Beijing resident Chang Yan received an email from a Tesla Inc. sales representative. Because of the tariff cut on U.S.-made cars, the price of the customized Model 3 he’s expecting dropped by almost $6,000. “It’s very pleasant news for me,” said Chang, a car fanatic who has been awaiting his new Tesla for at least two years. “The previous 40 percent tariff would have scared away quite a few potential Chinese customers for Tesla.” China scrapping the retaliatory levy slapped on American-made cars is a rare piece of good news out of the world’s biggest car market for the likes of Tesla, hard hit as the trade war and weakening economy kept buyers away from auto showrooms. China’s giant car market is facing its first annual sales slump in at least two decades and anything that helps spur demand is being welcomed by manufacturers betting heavily on the country and its thirst for cars.
What we've been reading
This is what’s caught our eye over the last 24 hours.
- This short-seller targets Chinese stocks “where there is nothing worth saving.”
- Here’s what putting $10,000 in certain assets would have returned in 2018.
- Why “defiance” is the word of the week for Xi and the Fed.
- Trump’s Syria decision “rattled the world,” a key ally says.
- Theresa May’s Plan B to avoid Brexit Armageddon.
- Facebook could be facing billions of dollars in fines.
- How Huawei could divide the world.
©2018 Bloomberg L.P.