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Investors weighed the latest corporate earnings and the chances of a trade breakthrough between Washington and Beijing, while Brexit was also top of mind Tuesday. Here are some of the things people in markets are talking about.
Mnuchin Talks Trade
U.S. Treasury Secretary Steven Mnuchin said that if China presents enough trade concessions to President Donald Trump, there’s a chance the administration may lift all tariffs. “Everything is on the table,” Mnuchin said early Tuesday during an interview on Fox Business Network. The Treasury chief is set to meet with top Chinese officials in Washington on Wednesday and Thursday alongside U.S. Trade Representative Robert Lighthizer about a month before the U.S. is set to escalate its trade war with China with fresh tariffs. Trump and China’s Xi Jinping gave their officials until March 1 to work out a deal on “structural changes” to China’s economic model. If they fail, Trump has promised to raise the tariff rate on $200 billion in Chinese imports to 25 percent from 10 percent. The collapse of talks would dash hopes of a lasting truce that would remove one of the darkest clouds hanging over the world economy.
Apple Stability Seen
Apple Inc. projected quarterly revenue that came close to Wall Street’s estimates on Tuesday, suggesting a punishing end to 2018 hasn’t gotten much worse.Apple also reported better-than-expected earnings from the key holiday quarter. While iPhone sales fell, revenue from other businesses, such as services and wearable devices, grew from a year earlier. The Cupertino, California-based company said fiscal second-quarter revenue will be between $55 billion and $59 billion. Analysts were looking for $58.97 billion, according to data compiled by Bloomberg. Apple shares rose almost 4 percent in extended trading on Tuesday. The stock closed at $154.68 in New York.
Stocks, Sterling Slide
Apple’s results came after U.S. shares edged lower Tuesday. Tech stocks dragged the S&P 500 Index down, with Twitter, Facebook and chipmakers leading losses. Industrial companies fared better as 3M Co. struck an optimistic tone and reported profit that beat estimates. Treasuries edged higher with the dollar. Crude rose as the U.S. put a de facto ban on Venezuelan oil. The British pound weakened after after U.K. lawmakers rejected a proposal to delay the country’s exit from the European Union. Still, the currency held above its 200-day moving average against the dollar on optimism that Prime Minister Theresa May will be able to avoid a no-deal Brexit as she heads back to Brussels seeking to renegotiate the accord.
U.S. Warns Not to Trust China on 5G
The scores of pages of U.S. indictments handed down Monday against Huawei Technologies Co. don’t explicitly mention anything about 5G networks or China’s spy agency. But they sent a clear message to world leaders weighing whether to use Huawei equipment for next-generation wireless networks connecting everything from phones to cars to supertankers: China’s largest technology company is a threat to national security. “They aren’t just going after the notion that there is hard evidence of previous spying,” said Graham Webster, a fellow at Washington-based research group New America who studies China’s digital economy. “They are trying to undermine trust in Huawei overall, saying that this company cannot be trusted in your infrastructure.”
Spy Chief Doubts Kim Will Scrap Nukes
North Korea is unlikely to give up its nuclear capabilities, the top U.S. intelligence official said, even as President Donald Trump expresses confidence he can persuade Kim Jong Un to disarm. While Trump prepares for a second summit with Kim, Director of National Intelligence Dan Coats said in a report to the Senate Intelligence Committee Tuesday that “we continue to observe activity inconsistent with full denuclearization.” The intelligence community “continues to assess that it is unlikely to give up all of its WMD stockpiles, delivery systems, and production capabilities,” Coats said, referring to weapons of mass destruction. “North Korean leaders view nuclear arms as critical to regime survival."
What we’ve been reading
This is what caught our eye over the last 24 hours.
- China’s economic woes spread across Asia.
- New immigrants spending $620,000 more on Vancouver houses.
- More than $125 billion of really old money awaits heirs in Asia.
- U.S. shutdown shows China calling Trump’s trade bluff might work.
- Tesla needs 21 percent rally to dodge $920 million payout.
- A Bel Air tract hits market at $150 million, house not included.
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