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Business Maverick

November 15: Five Things You Need to Know to Start Your Day

Jack Ma, center, Paradise Foundation co-chair and Alibaba Group executive chairperson, attending the African Ranger Awards Ceremony at the Westin Hotel in Cape Town alongside Chinese ambassador to South Africa Lin Songtian, left. Picture: Henk Kruger/ANA

The U.S. Senate plans moves to support Hong Kong’s pro-democracy protesters, Jack Ma sees trade “turbulence” ahead for 20 years, and we’ve hit a new global debt record. Here are some of the things people in markets are talking about today.

Under Review

As Hong Kong descends into ever more chaos, the U.S. Senate has moved to quickly pass legislation supporting pro-democracy protesters there by putting the city’s special trading status under annual review. Earlier, a 70-year-old man who suffered a head injury in scuffles was reported to have died, according to local newspaper Ming Pao. China’s President Xi Jinping, meanwhile, has said “continuing radical violent crimes” in Hong Kong have “seriously trampled on the rule of law” and that “stopping the violence and restoring order” is the city’s “most urgent task” at present. Xi’s latest comments came after Hong Kong’s government dismissed speculation it would impose a weekend curfew. The financial hub has been paralyzed since Monday morning, when a demonstrator was shot during protests, igniting city-wide rallies and violent clashes.

Choppy Markets

Asian stocks looked set for a choppy session amid mixed economic data and mounting concern over a partial U.S.-China trade deal. Treasuries and the yen gained along with gold. Futures pointed lower in Japan, were little changed in Hong Kong and climbed in Australia. The S&P 500 eked out its third gain in a row, but continued to trade under records reached over the last week. Ten-year Treasury yields fell toward 1.80%, pushing its weekly decline to more than 10 basis points. Meanwhile gloomy figures out of Asia are serving as a reminder of the impact that ongoing trade tensions are having on the global economy, and traders continue to focus on the ongoing unrest in Hong Kong.

Twenty-Year Turbulence

Jack Ma, the co-founder and former chairman of Alibaba Group, said trade “turbulence” between the U.S. and China could last 20 years if the two superpowers aren’t cautious. “We have to be very, very careful,” Ma said on Thursday in an interview with Bloomberg TV. “We have to solve problems, we should not create more problems.” While a full-scale trade war might not last that long, relations could end up rocky for the next two decades, he said. The trade dispute, which has been going on for more than a year and a half, has already ensnared more than 70% of bilateral trade in goods. If the two countries can’t resolve at least some of their differences in the coming weeks, the White House on Dec. 15 will add 15% tariffs on $160 billion in Chinese imports.

In The Red

We hit a new global debt record in the first half of 2019, according to the Institute of International Finance: $250 trillion, an eye-watering sum by any account. China and the U.S. accounted for more than 60% of new borrowing, Washington-based IIF said in a report published Thursday. Borrowing by governments, households and non-financial business now accounts for more than 240% of the world’s gross domestic product, and it’s growing faster than the global economy. In developed countries, it’s governments that account for the bulk of borrowing over the past decade, the IIF said. In emerging markets, companies have taken the lead — but more than half of corporate debt in those countries is likely held by state-owned businesses. The report highlighted the idea that emerging markets may be exposed to risks if growth slows further.

On A Tear

The world’s best-performing gaming stock is winning big as more lottery hopefuls buy their tickets online. Jumbo Interactive, a digital reseller of lottery tickets, has surged 192% this year, besting other global casino and gaming stocks that have a market capitalization of more then $100 million, according to data compiled by Bloomberg. The Australian company aims to triple its ticket sales by 2022. Their success lies in a shift in how people enter the draw: Younger people “are not really interested to buy a lottery ticket at a normal newsagent,” Jumbo Chief Executive Officer Mike Veverka said. Lottery and scratch tickets are the most popular forms of gambling Down Under, according to a Roy Morgan study published earlier this year.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.

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