Trade Tensions

With a flurry of trade threats across three continents in the span of 24 hours, President Donald Trump reminded financial markets that he’s comfortable heading into an election year using tariffs as his main tool of international economic leverage. “I don’t have a deadline,” Trump said Tuesday in London after being asked if he sees phase one of a trade deal with China concluding this year. “I like the idea of waiting until after the election for the China deal. But they want to make a deal now and we’ll see whether not the deal is going to be right.” The lack of urgency for an agreement in the 20-month-long dispute sent stocks tumbling across Europe and the U.S. as investors hunkered down ahead of the U.S. tariff hike that on on Dec. 15 would hit about $160 billion in Chinese imports, including smartphones, toys and children’s clothing.

Markets Slide

On the note of uncertainty over this month’s upcoming tariff deadline, stocks in Asia looked set for declines following the drop in U.S. equities and a surge in Treasuries. Futures fell in Japan, Hong Kong and Australia. The S&P 500 Index declined for a third day, though it pared some of its losses in afternoon trading. On top of signalling that he’d be willing to wait another year before striking an agreement with China, Trump also threatened levies on France after hitting steel from Brazil and Argentina. The surge in Treasuries drove yields down the most since August, and gold, the yen and the Swiss franc paced gains among haven assets. Australian bonds tracked the moves higher in early Wednesday trading. Elsewhere, oil rose as traders focused on the upcoming OPEC+ meeting that could lead to deeper supply cuts by some of the biggest crude producers.

Alphabet Shake-Up

Sundar Pichai is now CEO of both Google and its parent company, Alphabet, as co-founders Larry Page and Sergey Brin relinquished their roles as CEO and president, the company said Tuesday. Page and Brin will remain active within the company, and continue as members of the board. “We are deeply committed to Google and Alphabet for the long term, and will remain actively involved as board members, shareholders and co-founders,” Page and Brin wrote. “In addition, we plan to continue talking with Sundar regularly, especially on topics we’re passionate about!” Page and Brin will continue to control Alphabet through special voting stock. Alphabet shares rose less than 1% in extended trading on Tuesday, and the stock closed at $1,294.74 in New York, leaving it up about 24% so far this year.

By Default

China is hurtling toward another record year of onshore bond defaults, testing the government’s ability to keep financial markets stable as the economy slows and companies struggle to repay unprecedented levels of debt. At least 15 defaults since the start of November have pushed this year’s total to 120.4 billion yuan ($17.1 billion), within a hair’s breadth of the 121.9 billion yuan annual record in 2018, according to data compiled by Bloomberg. While the defaulted notes amount to a small sliver of China’s $4.4 trillion onshore corporate bond market, they’ve fueled concerns of potential contagion as investors struggle to gauge which companies have Beijing’s support.

What We’ve Been Reading

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

• Australian asset managers are gearing up for quantitative easing in their own backyard.
• Democrats lay a quick path to impeaching Trump over obstruction.
• Can they prevent an apocalypse? China and the U.S. are racing to create a super pig.
• Alibaba’s Hong Kong rally is at risk from three misconceptions.
• Ravaged Australian banks face a fresh challenge in New Zealand.
• Vietnam stocks get cheaper, but there aren’t many to buy.
• Supermarket survival means matching Amazon.