Trade Deal Hopes
Expectations are rising for a U.S.-China trade deal to be signed at a meeting next month in Chile. President Donald Trump says China has indicated that negotiations are advancing. “They have started the buying,” Trump said Monday, referring to Chinese purchases of U.S. agriculture products that the president has pushed for as part of a deal. “I want more,” he added. Commerce Secretary Wilbur Ross said that it was more important to get details of the agreement right than it was for Trump to sign it next month. He said that the “actual meat” of the agreement would come in two additional phases yet to be completed.
Hong Kong Fears
More than 1 million of Hong Kong’s 7.5 million population are originally from mainland China. But as the city’s protests have become increasingly violent — taking on a darker anti-China tone — mainland Chinese who live there are becoming increasingly fearful. Some now avoid speaking Mandarin in public for fear they’ll get beaten up in the Cantonese-speaking city. Others now refuse to fly on Cathay Pacific, after some of the airline’s employees took part in the unrest, and a few are considering leaving the city or relocating their businesses. Here’s what the mainlanders we interviewed had to say.
Markets Looking Up
Stocks in Asia are poised to gain after U.S. equities advanced as positive signs emerged on trade talks and ahead of earnings from some of the world’s biggest companies. Treasuries fell. Futures pointed to shares rising at the open in Australia and Hong Kong, while trading may remain muted with Japan closed for a holiday. The S&P 500 Index climbed to a one-month high, surpassing 3,000. Apple rallied to a record. The British pound dropped after Prime Minister Boris Johnson was thwarted in his latest attempt to get a Brexit deal approved.
Visitors from about 180 countries will gather in Japan today to mark the enthronement of Emperor Naruhito, who inherited the Chrysanthemum Throne from his 85-year-old father Akihito nearly six months ago. An elaborate ceremony involving sacred treasures, centuries of tradition and a series of banquets for global royalty and political leaders begins at the Imperial Palace in central Tokyo at 1 p.m. local time. About half a million petty criminals will also be pardoned to mark the occasion — a plan that has been met with some criticism — while a parade through the capital in an open-topped limousine has been postponed until Nov. 10 out of respect for the victims of a typhoon earlier in October. Here’s how the enthronement will work.
Is a hangover coming for Moutai investors? Shares in the maker of baijiu liquor have advanced 123% since October 2018, bringing the Chinese firm’s market capitalization to about $208 billion and making it the world’s most valuable distiller. The stock is widely considered a safe harbor, and investors have piled in. But the company is trading at close to 30 times estimated earnings for the next 12 months. That level has been its valuation ceiling for a decade, preceding double-digit percentage losses when the multiple trades around that line. Still, it seems like the party isn’t over just yet. Moutai’s status as the maker of China’s most popular liquor will support the stock in the long run, according to Mark Huang, a Hong Kong-based analyst at Bright Smart Securities.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
- SoftBank is planning to take control of once high-flying startup WeWork.
- Boris Johnson aims to force Brexit law through the U.K. Commons in just three days.
- JPMorgan warns U.S. money-market stress is likely to get much worse.
- A global tech fund manager is betting on Samsung over Apple or Alphabet.
- How exploding private-sector balance sheets have changed recessions as we know them.
- A Trump tower developer in India dumps luxury for cheap homes.
- Michelin names New York’s best restaurants.