Five Things You Need to Know to Start Your Day
U.S. stocks rallied, fueled by technology shares, after China’s new stimulus eased concerns about the impact of the country’s slowing economy on global growth. In the U.K., Prime Minister Theresa May’s Brexit plan was overwhelmingly rejected. Here are some of the things people in markets are talking about.
Asian stocks looked set to open in the green after a strong day for shares in the U.S and Europe. Technology stocks fueled a rally after China ratcheted up stimulus to combat slowing growth. The pound turned higher after U.K. politicians voted down a Brexit deal. The S&P 500 gained the most in more than a week, rising above the key 2,600 level -- which it failed to breach on three occasions last week -- for the first time in a month. The tech-heavy Nasdaq 100 recouped two days of losses after China announced more measures to boost its economy, easing concerns about the impact of the trade war. The 10-year Treasury yield traded around 2.71 percent, while the dollar advanced against major peers. The euro dropped after European Central Bank President Mario Draghi said the economy is weaker than expected.
May Loses Brexit Vote
Prime Minister Theresa May’s Brexit deal was rejected by Parliament in a humiliating defeat, her plan for leaving the European Union all but dead. She now faces a confidence vote in her government. The House of Commons voted 432 versus 202 against the divorce the U.K. government brokered with the European Union. A margin of less than 60 would have given grounds to hope that the deal was salvageable, with the EU poised to engage in ways to make it more palatable. Now, more than two years after the nation voted to leave the 28-nation bloc, the U.K. is facing political paralysis over a decision that has divided the nation and its political class for decades. The largest parliamentary defeat in over a century prompted the main opposition Labour Party to pounce with a confidence motion to try to force a general election.
Canada Warns on Travel to China
Prime Minister Justin Trudeau continues to work the phones to rally support in Canada’s dispute with China. Trudeau spoke Monday with Argentinian President Mauricio Macri and New Zealand Prime Minister Jacinda Ardern, after calls last week to other world leaders including Donald Trump. Earlier Monday, he expressed “ extreme concern” about China’s actions in the wake of Canada’s arrest of a Huawei Technologies Co. executive on a U.S. extradition request. Canada has also updated its travel advisory on the Asian nation, urging Canadians to “exercise a high degree of caution in China due to the risk of arbitrary enforcement of local laws.” In response, Beijing issued its own travel alert for Canada on Tuesday.
Tycoons Transfer $17 Billion
Four Chinese tycoons transferred more than $17 billion of their wealth into family trusts late last year, underscoring how the rich are scrambling to protect their fortunes from the nation’s newly toughened tax regime. The latest example came from billionaire Sun Hongbin, chairman of real-estate developer Sunac China Holdings Ltd., who disclosed in a filing in Hong Kong on Jan. 12 that he shifted most of his stake in the company to South Dakota Trust Co. on Dec. 31. Longfor Group Holdings Ltd. Chairwoman Wu Yajun, one of China’s richest women, made a similar move in recent weeks, as did the wealthy magnates behind food distributors Dali Foods Group Co. and Zhou Hei Ya International Holdings Co.
Becoming China’s Elon Musk
Tesla Inc. is now hiring in China, and China Inc. is hiring in Tesla’s backyard. A ground-breaking in Shanghai attended by Tesla Chief Executive Officer Elon Musk last week marked what will become the first factory in the nation entirely owned by a foreign automaker. In Tesla’s Silicon Valley neighborhood, meanwhile, there are now about a dozen electric automakers with Chinese owners or backers setting up shop or recruiting Musk’s former co-workers. These well-funded startups, some of which haven’t sold a single car, are buying up factories, testing prototypes on public roads and kitting out lavish offices in the San Francisco Bay Area. Landing a former Tesla executive has become a top prize. “Everybody wants to be the next Elon Musk -- the Chinese Elon Musk,” said Martin Eberhard, a co-founder of Tesla back when it was called Tesla Motors. He served on the board of Chinese EV maker SF Motors Inc. after it bought his post-Tesla startup.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- China’s small banks face a tougher 2019.
- Orcel’s ascent to Santander CEO scuttled by dispute over UBS pay.
- The luxury car of the future may have lasers for headlights.
- Kenya hunts gunmen in fatal hotel attack claimed by Al-Qaeda.
- Nike’s new $350 smart sneaker will require regular recharging.
- JPMorgan stock traders earn their keep as fixed income lags.
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