Five Things You Need to Know to Start Your Day
U.S. President Donald Trump. (Photographer: Andrew Harrer/Bloomberg)

Five Things You Need to Know to Start Your Day

(Bloomberg) --

U.S.-China trade talks appear to be making progress, yet American stocks fell in thin trading Friday as a rash of economic data disappointed investors. Here are some of the things people in markets are talking about.

Trump Said to Plan Meeting With China Trade Chief

President Donald Trump  plans to meet with China’s top trade negotiator Friday afternoon as the U.S. tries to forge a preliminary deal with its biggest economic rival before tariffs on some Chinese imports more than double next month, two people familiar with the matter said. The meeting with Chinese Vice Premier Liu He would cap the latest round of talks in Washington, with Trade Representative Robert Lighthizer leading the U.S. delegation. Plans for a meeting between Trump and Liu signal optimism that talks are making sufficient progress to warrant another face-to-face meeting between the two men. As the discussions continued Thursday, reports emerged that negotiators are working on memorandums of understanding that would form the basis of a final deal. The MoUs would cover areas including agriculture, non-tariff barriers, services, technology transfer and intellectual property, according to a person briefed on the talks.

Stocks Drop as Data Disappoints 

Asia shares looked set to fall in the wake of a decline in U.S. stocks as investors grappled with concerns about economic growth and the latest twists in global trade. The S&P 500 dropped for the first time in four sessions after economic data in both Europe and U.S. came in below expectations, reigniting worries about the world economy. Alphabet slid amid questions about the company’s YouTube platform. Health-care stocks were pulled down as Johnson & Johnson dropped after the company said it received subpoenas from federal prosecutors tied to its talc baby-powder products. The 10-year Treasury yield rose above 2.69 percent, and the dollar gained against most major currencies. West Texas oil fell below $57 a barrel after an industry report showed American crude stockpiles continue to swell.

Huawei Not Obliged to Open `Back Doors'

Huawei Technologies Co. would deny any Chinese government request to open up “ back doors” in foreign telecommunications networks because they aren’t legally obliged to do so, the company’s chairman says. Liang Hua, speaking to reporters in Toronto on Thursday, said the company had received an independent legal opinion about its obligations under Chinese law and said there is nothing forcing companies to create what he called “back doors” in networks. He said they’d never received any such request, but would refuse it if they did. “We will not execute the request” because it wouldn’t be lawful, he said through a translator, stressing that he leads “an independent business organization” aimed at serving its customers. “We have kept a good track record on cyber-security.” His comments come as the country and several of its peers weigh whether to restrict or ban Huawei from 5G networks. The company’s chief financial officer, Meng Wanzhou, meanwhile, is under house arrest in Vancouver and faces potential extradition from Canada to the U.S.

Beijing’s Big Brother Mints Billionaires 

Before he became a billionaire, Dai Lin would ride his bike to work, pedaling through the streets of Tianjin to the headquarters of Tiandy Technologies Co., the camera maker he built with support from China’s government. When Dai started his company in 1994, roadside surveillance cameras were rare in China. Now they’re everywhere -- part of a high-tech surveillance state that’s stoking privacy and human-rights concerns in the world’s most populous nation, raising thorny questions for international investors, and making well-connected entrepreneurs like Dai extremely rich. The 54-year-old former academic, who now drives a luxury sedan and rewards high-performing employees with BMWs, is the latest of at least four businessmen to amass billion-dollar-plus fortunes from surveillance companies that count China’s government as a major client or investor. Their combined net worth exceeds $12 billion, according to the Bloomberg Billionaires Index.

Bond Bulls Bet on RBA Cut 

Bond bulls are doubling down on bets for the first Australian interest-rate cut in almost three years. The yield premium that investors demand to hold three-year notes over the cash rate shrank to nine basis points on Wednesday, the smallest gap since November 2016, reflecting rising bets for a rate cut. A similar narrowing occurred in 2014 and 2016 before the Reserve Bank of Australia embarked on an easing cycle. Calls for an easing grew louder Thursday, after influential Westpac Banking Corp. economist Bill Evans said the central bank may lower borrowing costs twice this year. A report of escalating tensions with China added fuel to the fire, as traders speculated that a ban on Australian coal shipments would worsen the growth outlook. Australia’s Treasurer Josh Frydenberg cautioned against “jumping to conclusions” Friday, saying trade ties between the two nations are “exceptionally strong.”

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