Five Things You Need to Know to Start Your Day
U.S. stocks ended the day little changed despite a rash of news that included comments from America’s lead trade negotiator and testimony from President Trump’s former fixer Michael Cohen. Here are some of the things people in markets are talking about.
China, More Please
President Donald Trump’s top trade negotiator said additional purchases of U.S. goods by China wouldn’t be enough on it’s own to ensure a trade deal is reached. Trade Representative Robert Lighthizer said America would push for “significant structural change” to the Asian nation’s economy, and it’s too early to tell whether they would concede to the demands. “This administration is pressing for significant structural changes that would allow for a more level playing field -- especially when it comes to issues of intellectual property rights and technology transfers,” Lighthizer said Wednesday in testimony before the House Ways and Means committee.
Asia stocks look set for a mixed open after U.S. shares ended the New York session modestly lower. The dollar advanced and bond yields rose. The S&P 500 and Dow Jones Industrial Average dropped for a second day after Lighthizer’s comments. Meanwhile, Federal Reserve Chairman Jerome Powell testified for a second day before Congress about monetary policy and the U.S. economy. Equities began the day lower and never fully recovered amid fresh headwinds from disappointing corporate earnings and geopolitical tension in Asia. Investors have added the India-Pakistan flare-up to a host of uncertainties they’re tracking, from the China trade talks to Brexit, that could rein in a recovery in global equities from December lows.
Michael Cohen laid out a litany of damning allegations against his former boss Donald Trump, staying emphatic and calm as Republicans on a congressional committee assailed him as a convicted liar out to gain publicity and hurt the president. “Everybody’s job at the Trump Organization is to protect Mr. Trump,” Cohen, the president’s former lawyer and fixer, told the House Oversight and Reform Committee on Wednesday. “Every day, most of us knew we were coming in and we were going to lie for him on something. And that became the norm, and that’s exactly what’s happening right now in this country.” Cohen’s testimony touched on numerous potential legal threads that could concern the president, from hush money paid to a porn star before the election to allegations of overstating his net worth for loans, insurance and tax purposes. But it’s unclear how much added legal jeopardy the president may find himself in as a result.
Pilot Caught in India, Pakistan Crossfire
The fate of a captured Indian Air Force pilot may hold the key to whether -- and how -- India and Pakistan are able to step back from a broader conflict. The two sides, which have fought three major wars since the bloody partition of 1947, regularly exchange artillery and small-weapons fire across a disputed border. But the situation which flared up earlier this month escalated dramatically into Wednesday, with the loss of an Indian MiG 21 fighter jet and the pilot later paraded on Pakistani television. While the U.S., Russia and China are all calling for calm, domestic political factors make it far from easy for either side in the conflict to back down. India’s Prime Minister Narendra Modi must contest a general election within weeks, while his counterpart, Imran Khan, faces a military that is seeking to assert its dominance at a time when Pakistan is in the eye of a financial and economic storm.
President Trump and North Korea’s Kim Jong Un sounded optimistic at the start of their second set of face-to-face meetings. Trump is trying to advance nuclear talks that have mostly stalled since their first summit in June. The two leaders shook hands and made brief remarks before a one-on-one meeting in Hanoi Wednesday. They dined at the century-old Sofitel Legend Metropole Hanoi along with a handful of top officials. Sitting next to Kim, Trump called their first summit in Singapore “very successful” and said “I think this one will hopefully be equal or greater.” He said North Korea “has tremendous economic potential. I look forward to watching it happen.”
What we’ve been reading:
This is what caught our eye over the last 24 hours.
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