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Five Things You Need to Know to Start Your Day

Get up to date on all that’s moving global markets this morning.

Five Things You Need to Know to Start Your Day
U.S. President Donald Trump. (Photographer: Shawn Thew/Pool via Bloomberg)

(Bloomberg) --

Trump’s trade deal optimism cheers markets, the G-7 wraps up and a family with a $38 billion fortune has a lot to lose from Hong Kong’s protests. Here are some of the things people in markets are talking about today.

‘They Want to Make a Deal’

After days of escalating tensions, U.S. President Donald Trump said China wants to make a trade deal “very badly.” U.S. stocks rallied on the president’s optimistic comments. “The tariffs have hit them very hard,” Trump said of China during a press conference from the Group of Seven meeting in Biarritz, France. China’s top trade negotiator, Vice Premier Liu He, said: “We are willing to solve the problem through consultation and cooperation with a calm attitude,” according to a Caixin report. “We firmly oppose the escalation of the trade war.” Trump noted Liu’s call for “calm,” saying “I agree with him.” Yet amid all the soothing words, Trump made it clear that he wasn’t abandoning his rough and tumble tactics to force a trade deal on China.

U.S. Stocks Rally

All three main U.S. equity indexes climbed in thin trading thanks to comments from Trump and French President Emmanuel Macron, who also said things were moving forward between the U.S. and China. The broad-based equity rally was led by tech shares, especially semiconductor stocks. The dollar strengthened and 10-year Treasury yields held close to a three-year low. Asian equities are set to open higher. The trade war’s latest twists and turns punctuated an already tumultuous August, with markets buffeted by signs of slowing global economic growth and violent protests in Hong Kong. Regardless of Monday’s developments, the risk of U.S. recession may have crept higher after Trump announced fresh levies on Chinese imports Friday.

G-7 Wraps Up

Instead of the usual detailed communique, France’s Macron wrapped up this year’s Group of 7 meeting with a one-page statement that he said he’d written himself. The document endorses fair and open global trade, and calls for reforms of the WTO to boost intellectual property protection and tackle unfair trading practices more quickly. Leaders also agreed Iran shouldn’t obtain nuclear weapons and underlined the importance of the 1984 joint declaration between China and the U.K. over Hong Kong, which sets out the city’s distinct rights and freedoms from the rest of China. Meanwhile, Trump is pitching for next year’s G-7 summit to be held at his Miami golf resort. “I don’t want to make any money,” he said, estimating that he was losing $3 billion to $5 billion by serving as president. 

Hong Kong’s Low-Key Billionaires

As Hong Kong billionaires go, Li Ka-shing might be the most famous. But the Kwoks, who built Sun Hung Kai Properties into Hong Kong’s largest developer, control a $38 billion fortune that’s by far the city’s biggest. It’s also the most exposes to the city’s historic demonstrations. While the protests were triggered by a controversial extradition bill, many protesters have cited sky-high home prices, a widening wealth gap and the outsized political influence of property tycoons as reasons why they’ve taken to the streets for 12 straight weeks. And like many other rich clans in Hong Kong, the Kwoks will have to navigate the increasingly combustible environment while also wading through complex succession issues. Read more about Asia’s richest families here.

Singapore’s Wave of  Bad Debt

Singapore firms are likely to see more soured debt as the trade-reliant economy takes a hit from U.S.-China tensions. That’s the view of debt restructuring experts, for whom more bad debt could mean increased business. Singapore’s government cut its forecast for economic growth this year to almost zero, and weak export data have stoked fears of a recession. The nation has already been rocked by the high-profile collapse of water treatment firm Hyflux, while an increase in soured debt is likely to spell more pain for lenders and bond investors. Singapore’s prime minister said this month that there is no need yet for economic stimulus, but the government will “promptly respond” if the situation worsens.

What We’ve Been Reading

This is what’s caught our eye over the weekend.

To contact the editor responsible for this story: Cormac Mullen at cmullen9@bloomberg.net

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