By Artem Zavarin and Simon Bohovich
Monday, November 11.
US stocks were under pressure due to the uncertainty over trade talks and Hong Kong’s strenuous political situation. Stocks in Hong Kong suffered their biggest one-day drop because of the growing protest chaos in the city.
Veterans Day holiday caused slow activity on Wall Street, because the Treasury market was closed, while the equity market was opened. Donald Trump stated on Friday that he had not agreed to revoke tariffs on Chinese imports, refuting media reports earlier in the week that suggested a thaw in the US-China trade war was at hand. This caused a slight decrease in optimism in the world market.
Tuesday, November 12.
Everyone continues to monitor the situation with US-China trade talks. Donald Trump stated that the US is close to signing “phase-one” deal with China, therefore optimistic mood dominated in the world market. US stocks kept stable gains, gold trading was close to its lowest level in three months due to upbeat mood.
Also on this day, it was worth paying attention to Chile, where protests against the government strengthened and Chile’s peso fell to a record low against the dollar(the peso fell nearly 5 percent) and stocks plunged more than 3 percent.
Wednesday, November 13.
The story with US-China trade talks remained and Donald Trump declared that tariffs will increase if no truce will be attained during the negotiations with the Chinese side. The obscurity in the world market continues and European stocks fell after Mr. Trump’s speech because investors wanted to see a strong justification of a rollback in tariffs on China and Europe as well. The violence in Honk Kong’s protest deepened and Hong Kong’s stocks continued to decline.
The so-called Russian “de-dollarization” program had started due to “geopolitical risks”(Vladimir Kolychev, deputy finance minister). As a part of this program, Russia wanted to cut the dollar’s share of its $125bn sovereign wealth fund and switch to euro and renminbi. According to Maxim Oreshkin, the economy minister of the Russian Federation, Russia also planned to sell the next oil and gas exports in euro and rubles.
Thursday, November 14.
The share price of Cathay Pacific has been failing through the 2019th. The second correction of expected profits in one month and it shows that the company would finish this year with a loss – reports Financial Times. The decrease is explained by ongoing anti-China protests in Hong Kong. Tourists and business people do not want to visit the city where it is unsafe to be on the street, for example, the flights from and to continental China have decreased last month by 22% compared to last year.
The ongoing protest also caused the exodus of Chinese students from Hong Kong.
The financial district was once again occupied by protestors paralyzing the work of the financial specialist in Hong Kong.
At the same time, on the other side of the world, the de-escalation of China-US relations was accompanied by an outperform of the US labor market.
The officials of both Washington and Beijing are on their way to finishing “phase one” in stopping the trade war between their countries.
Friday, November 15.
The leader of the People’s Chinese Republic president Xi Jinping addressed the officials of Hong Kong saying that the police should deliver punishment to those who have committed violent crimes (commenting on the situation on the protests and its civil victims).
However, despite the protests, Alibaba announces that the corporation is going to sell $500 million of shares to investors in the secondary offering. Alibaba’s chief executive said that he believes in the bright future for Hong Kong and also called the city one of the world’s most important financial centers.
Employers in Hong Kong have enhanced the measures which would help to defend their employees. Citi Bank, for example, after the incident with the detention of one of the employees, has allowed working from home.
Investors with a focus on the US market have taken $400 million out of the stocks and bonds funds since the USA and China are trying to get to the trade truce.
A chance that the trade war would end has appeared this week with the talk about intellectual property and China buying the products of the US’s agricultural industry.
Saturday, November 16.
As the trade war goes on, new records in global debt appear $255 trillion. Now the debt is making up 320% of the global GDP.
Sunday, November 17.
Bill Gates has described the trade war between the US and China as paranoid since there is no possibility, according to Gates, to stop China from developing innovative technologies.
References:
Cathay Pacific: long-haul plan, he Financial Times https://www.ft.com/content/3b659068-c6d9-4dcb-ae75-73c9780a8ca6
Georgiadis P. and McCormick M., European stocks fall as Trump injects fresh trade worries into markets, the Financial Times https://www.ft.com/content/7c883fee-05fe-11ea-9afa-d9e2401fa7ca
Humm N., Gold slips as upbeat mood prevails in global markets, the Financial Times https://www.ft.com/content/2476dfa8-0541-11ea-9afa-d9e2401fa7ca
Leng S., China, US push global debt towards record US$255 trillion as trade war continues to impact global economy, South China Morning Post https://www.scmp.com/economy/china-economy/article/3037938/china-us-push-global-debt-towards-record-us255-trillion-trade
Politi J. and Hancock T., US and China struggle to finalise “phase one” trade deal, the Financial Times https://www.ft.com/content/07c0d99c-0706-11ea-a984-fbbacad9e7dd
Rennison J., Investors pull money out of US stock and junk bond funds, the Financial Times https://www.ft.com/content/62a3c640-074b-11ea-a984-fbbacad9e7dd
Rocco M., US stocks advance as Trump talks trade, the Financial Times https://www.ft.com/content/2781c834-0578-11ea-9afa-d9e2401fa7ca
Seddon M., Russia to cut dollar share of its $125bn sovereign wealth fund, the Financial Times https://www.ft.com/content/c196fe1c-0622-11ea-a984-fbbacad9e7dd
Smith C., Chile’s peso slides to record low amid protest, the Financial Times https://www.ft.com/content/6c829fae-0572-11ea-9afa-d9e2401fa7ca
Shane D. and McMorrow Ryan, Alibaba puts its faith in Hong Kong with mammoth secondary listing, the Financial Times https://www.ft.com/content/616d0074-074c-11ea-a984-fbbacad9e7dd
Woodhouse A., Liu N., Mitchell T. and Liu Q, Chinese students abandon Hong Kong, the Financial Times https://www.ft.com/content/c54b2c36-05aa-11ea-a984-fbbacad9e7dd
Wells P. and Rocco M., US stocks mixed as trade questions linger, the Financial Times https://www.ft.com/content/b07a397a-0490-11ea-a984-fbbacad9e7dd
