Friday, August 2 : Five Things You Need to Know to Start Your Day

Tariff Tweets

Well that escalated quickly. Donald Trump abruptly tweeted he would impose a new 10% tariff on $300 billion worth of Chinese imports not yet subject to U.S. duties after setbacks in trade talks. The levy will go into effect Sept. 1. A total of $250 billion of China-made products are already subject to a 25% import charge. Peter Navarro had earlier called the talks this week in Shanghai "constructive." Trump said Xi Jinping isn't moving fast enough to resolve the trade war, and he warned that he might raise tariffs on Chinese goods beyond 25% if trade negotiations with Beijing remain stalled.

Stocks Swoon

As for market reaction, Asian stocks are expected to follow the U.S. lower, after the S&P 500 saw the biggest two-day drop since May, swinging 2% from gains to losses. The 10-year Treasury yield dropped to the lowest level since 2016, while two-year rates plunged 16 basis points. Haven currencies rose against the dollar, and gold was up more than 2%. Crude oil slumped 8%.  Trump said he was "not concerned at all" about the markets’ negative reaction.

Cull Begins

Citigroup has begun to make cuts to its trading workforce as it works toward culling about 400 people from the division. The company has dismissed dozens of employees this week, including cash equities and equity derivatives traders, according to people with knowledge of the matter. Roughly 50 people have been cut at Citigroup’s New York office so far, and about 25 people are out in London, with more expected this year. Citigroup joins banks including Deutsche Bank AG and Societe Generale SA in eliminating hundreds of jobs across their equities and fixed-income trading divisions.

Flash Mob

Hong Kong finance staffers gathered in the city center after work Thursday for a "flash mob" protest in the pouring rain, the latest demonstration in a movement that's growing more creative. The city told its employees—some of whom plan to rally Friday—that they mustn't violate the civil service's political neutrality. None of this has been good for local retailers, and luxury brands are getting increasingly worried too. The nightmare scenario for Hong Kong is seeing Chinese troops on the streets, which is seen as a last resort but has set nerves on edge.

Not-So Prime Time TV

Couch potatoes in China, the next 100 days are going to be tough. Beijing ordered television channels not to broadcast shows that are "too entertaining" in the months leading up to the 70th anniversary of the founding of the People's Republic. Instead, the country's TV regulator provided a list of 86 approved programs that focus on patriotic themes, such as the rise of the Chinese nation, its growing affluence and power, and the stories of national heroes.