A National Emergency
Trump signed an executive order to declare a national emergency relating to threats against information and communications technology and services. The move, which was expected, could restrict Chinese firms Huawei and ZTE from selling their equipment in the U.S. Shortly afterward, the Department of Commerce said it had put Huawei on a blacklist that could forbid it from doing business with American companies. The pair of actions risk aggravating Beijing as the president seeks to pressure China’s leaders into agreeing to a wide-ranging trade deal
Pumping The Brakes
Donald Trump may de-escalate trade friction with the EU and Japan by delaying on auto tariffs by up to six months, people familiar said. He may change his mind, however, as aides including Wilbur Ross and Peter Navarro are in favor of the new import duties. Meanwhile, U.S. Treasury Secretary Steve Mnuchin expressed caution about China, saying he has “no plans yet” to go to Beijing and that while he’s “hopeful” for a deal, “I wouldn’t say I’m confident.”
Good Day For Stocks
U.S. stocks rose on optimism trade tensions may wane, with the S&P 500 posting its biggest two-day gain in more than six weeks. The index remains 3% lower than before the trade-war escalation. Treasuries climbed, with 10-year yields down more than three basis points. Hang Seng and Nikkei futures are mixed.
China’s Treasuries Dump
China’s holdings of Treasuries fell in March for the first time in four months, dropping by $10.4 billion from February to $1.12 trillion. The country remained the top holder of U.S. sovereign debt, ahead of Japan. The data preceded the recent deepening of the trade war, which has prompted renewed speculation that Beijing could sell American assets to put pressure on Washington.
Slowdown? What Slowdown?
Cisco gave a bullish sales and profit forecast for the current period, a sign that corporations are continuing to spend on their computer networks. The company expects as much as $13.5 billion in revenue in the current quarter and adjusted profit of up to 82 cents per share, in line with projections. Alibaba defied China’s slowdown; Tencent wasn’t so lucky.