| China will pose a threat for decades, a top U.S. general says. U.S. stocks hit another record high. And foreign investors risk getting snared by India's tax for the super rich. Here are some of the things people in markets are talking about today. Promises, Promises Donald Trump complained China hasn't boosted purchases of U.S. farm products, a promise he said he secured from Xi Jinping at the G-20 summit in June. Beijing has never confirmed the pledge, and neither side has documented the discussion. Earlier, China said trade talks will resume "on a basis of equality and mutual respect," and that its core concerns must be addressed. Meanwhile, a top U.S. general said China will pose a threat for decades. Rally at the Close Asian equity futures are mixed after U.S. stocks rallied late to close at a record high. Treasuries retreated after the latest American inflation reading came in hotter than anticipated. The S&P briefly crossed above 3,000, while the Dow Jones surpassed 27,000. The dollar fell for a second day, while oil and gold retreated. India's Plan Overseas investors may struggle to circumvent India's plan to tax the very rich as the option proposed by the tax authorities to sidestep the levies isn't easy to implement. With frightened investors wiping off 2.9 trillion rupees ($42 billion) from the benchmark S&P BSE Sensex since the budget on July 5 through Wednesday, tax officials have suggested that global funds convert themselves from trusts to corporates as a way to avoid paying the higher surcharge. Trouble for OPEC The cartel forecast it's producing about 560,000 barrels a day more than will be needed next year as the surge in U.S. shale threatens to deliver another surplus. Supplies from its rivals will grow by 2.4 million, more than twice as much as global oil demand, which is expected to be around 1.1 million. Futures dropped even as Tropical Storm Barry formed in the Gulf of Mexico and menaced American refineries and offshore crude output. More Bears More investors turned bearish on Japanese stocks, even before companies start reporting quarterly earnings that some analysts say will decline. BlackRock and Singapore's DBS Group, became the latest institutions to lower their weightings on the country's shares, citing everything from a stronger yen to concern about the fallout from the U.S.-China trade war. What we've been reading This is what's caught our eye over the last 24 hours. And finally, here's what Cormac's interested in this morning Markets saw Fed chair Jerome Powell's testimony to Congress Wednesday as confirmation that U.S. rates are headed lower at the central bank's late July meeting. Stocks rose on the news and bond yields ticked lower. However, investors seem too focused on "whether" the Fed will cut rates rather than the equally important "why."  With markets set up for relatively hawkish testimony, the Fed chairman was dovish. Business investment has slowed "notably" and overall growth appears to have moderated, Powell said. He also singled out declines in manufacturing output and housing investment, along with weakness in "some major foreign economies." That dove-tailed with Fed minutes that showed officials judged in June that downside risks to the U.S. economy had increased significantly. Bond investors should be comforted that a quarter-point cut in July is in the bag, with more seen coming. But equity investors need to remember the implications of the economic risks Powell cited. Cormac Mullen is a Cross-Asset reporter and editor for Bloomberg News in Tokyo. Even before Trump's trade war, China was the world's biggest story. It's reshaping the global economy — but its ascent hasn't come without major problems. Sign up to get Next China, a weekly dispatch on where the country stands now and is headed next. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
Post a Comment