American federal judges rule against Trump's Chinese app bans. The U.S. plans more sanctions on Iran. And a record ban on short-selling in South Korea fuels bubble fears. Here are some of the things people in markets are talking about today. The Trump administration failed to prove Chinese-owned TikTok and WeChat pose enough of a national security threat to justify an American ban, two federal judges have ruled this month. U.S. District Judge Carl Nichols in Washington said in a court filing Monday that he blocked a ban on new downloads of TikTok because the government likely overstepped its authority under the emergency-powers law it invoked to justify the prohibition. Earlier, U.S. Magistrate Judge Laurel Beeler in San Francisco blocked a similar ban on WeChat. The decisions show that, while judges may agree with the notion that China poses a threat, the administration hasn't yet shown that the apps themselves are a problem. Asian stocks look set to extend a global rally amid broad gains for equities led by financial shares. The dollar weakened. Futures pointed to modest advances in Japan, Australia and Hong Kong. U.S. stocks snapped four weeks of declines. Banks led the S&P 500 Index to its biggest gain in two weeks as investors found buying opportunities after the gauge fell to its lowest since July last week. HSBC added almost 9% after its biggest shareholder raised its stake, while an index of lenders rose the most in a month. Shares in Europe rose the most in three months. Signs that U.S. politicians are moving toward new fiscal stimulus has boosted investor sentiment, while the Federal Reserve continues to provide liquidity, and China's economic reports are looking stronger. Still, caution remains, with traders awaiting the first U.S. presidential debate on Tuesday. The Trump administration is considering fresh sanctions to sever Iran's economy from the outside world by targeting more than a dozen banks and labeling the entire financial sector off-limits, three people familiar with the matter said. The move would effectively leave Iran — which has seen its economy crushed by the loss of oil sales and most other trade thanks to existing American restrictions — isolated from the global financial system, slashing the few remaining legal linkages it has and making it more dependent on informal or illicit trade. The proposed sanctions would have two objectives, according to the people, who asked not to be identified: close one of the few remaining financial loopholes allowing Iran's government to earn revenue, and stymie Democrat Joe Biden's promise to re-enter a 2015 nuclear deal if he wins the presidency. The proposal is still under review and hasn't been sent to the U.S. president. South Korea's government has found a tool to keep the retail investors that are increasingly dominating the stock market happy: a short-selling ban that's turning into one of the world's longest and broadest. In August, the government extended the ban the country imposed in March for another half a year, much to the consternation of institutional investors needing to short sell to manage risks. That ban was prolonged even though the benchmark Kospi has soared about 60% since its March swoon. The rationale for this continued ban lies with the increasing importance of individual investors, who make up 70% of the stock market now. The dilemma for Seoul is that with so many mom-and-pop investors entering the market this year, reintroducing short-selling could cause a crash. BNP Paribas is rethinking its affinity for the carry trade, cutting positions in emerging-market currencies as volatility picks up ahead of the U.S. election. Momtchil Pojarliev, head of currencies at the money manager, sold his holdings in the South African rand earlier this month to avoid a big position around the Nov. 3 U.S. election. He earned 3% to 4% from the bet, and expects to add the currency again at key price levels. Carry trades — which use borrowed dollars to buy securities denominated in higher-yielding currencies — proved a lucrative wager earlier this year. But the strategy, a bread-and-butter source of returns for macro hedge funds, has recently taken a hit. Fears around a delayed election outcome and an uptick in coronavirus cases in Europe have fueled pent-up haven demand for the greenback, prompting investors to sell riskier peers. What We've Been ReadingThis is what's caught our eye over the past 24 hours: And finally, here's what Adam's interested in this morningThe path out of the downturn for Asia's largest economy has been encouraging many in the markets. You can observe this in the recent strength of the Chinese currency — the offshore yuan earlier this month touched its highest level against the dollar since May 2019. Data released this past weekend showed profits at industrial companies once again climbed in August. But early indicators tracked by Bloomberg Economics for September suggest the recovery remains a bumpy one. There's also a signal of increased caution coming from the equity market in China, as the value of stocks sold short climbed to a record high. Traders have pushed up the balance of securities lending on domestic exchanges to 84.9 billion yuan for the week that ended Sept. 25. You can see the recent increase on the chart.  The uncertainty of the economic path coupled with the fragility shown from that huge pile of cash being used for the purpose of shorting stocks might be concerning for believers of the China rebound. The next data point to watch comes with the purchasing manager indexes due Wednesday, expected to show September manufacturing improved slightly while non-manufacturing moderated. Keep a close eye on this for more detail on the economy that's been first in to, and first out of, the pandemic. Adam Haigh is an editor covering global markets for Bloomberg News in Sydney. | 
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