Tokyo, Aug 20 (AP/UNB) — Asian shares were mostly higher Tuesday after Wall Street rallied on the U.S. decision to give Chinese telecom giant Huawei another 90 days to buy equipment from American suppliers.
That decision appeared to inspire a buying mood among investors eager for any signs of progress in the trade war between the U.S. and China.
Japan's benchmark Nikkei 225 gained 0.6% to finish at 20,677.22. Australia's S&P/ASX 200 added 1.2% to 6,545.00. South Korea's Kospi rose 1.1% to 1,961.96, while Hong Kong's Hang Seng lost 0.2% to 26,249.25. The Shanghai Composite was down 0.2% at 2,877.53.
On Wall Street, the S&P 500 climbed 34.97 points, or 1.2%, to 2,923.65. The Dow Jones Industrial Average rose 249.78 points, or 1%, to 26,135.79. The index briefly gained 336 points. The Nasdaq, which is heavily weighted with technology stocks, rose 106.82 points, or 1.3%, to 8,002.81. Smaller company stocks also had a good day. The Russell 2000 index gained 15.21 points, or 1%, to 1,508.85.
Recently investors have been trying to determine whether a recession is on the horizon in the U.S. A key concern is that the escalating and costly trade conflict between the world's two biggest economies will hamper growth around the globe.
Earlier this month, Trump announced plans to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from early rounds of tariffs. The tariffs have been delayed, but ultimately will raise costs for U.S. companies bringing goods in from China.
Huawei has become part of the trade war, with the White House showing a willingness to use sanctions against the company as a bargaining chip. The U.S. government blacklisted Huawei in May, deeming it a national security risk, meaning U.S. firms aren't allowed to sell the company technology without government approval.
"While it is not unexpected, the extension for the easing of Huawei sanctions had added to the relief for markets at the start of the week," said Jingyi Pan, market strategist for IG in Singapore.
Benchmark crude oil rose 22 cents to $56.36 a barrel. Brent crude, the international standard, rose 25 cents to $59.99 a barrel.
The dollar rose to 106.51 yen from 106.36 yen Monday. The euro weakened to $1.1080 from $1.1104.
Berkeley Heights, Aug 19 (AP/UNB) — President Donald Trump dismissed concerns of recession on Sunday and offered an optimistic outlook for the economy after last week's steep drop in the financial markets.
"I don't think we're having a recession," Trump told reporters as he returned to Washington from his New Jersey golf club. "We're doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they're loaded up with money."
A strong economy is key to Trump's re-election prospects. Consumer confidence has dropped 6.4% since July. The president has spent most of the week at his golf club in New Jersey with much of his tweeting focused on talking up the economy.
Aides sought to reinforce that message during a series of appearances on the Sunday talk shows.
Larry Kudlow, Trump's top economic adviser, dismissed fears of a looming recession and predicted the economy will perform well in the second half of 2019. He said that consumers are seeing higher wages and are able to spend and save more.
"We're doing pretty darn well in my judgment. Let's not be afraid of optimism," Kudlow said.
Kudlow acknowledged a slowing energy sector, but said low interest rates will help housing, construction and auto sales.
Kudlow also defended the president's use of tariffs on goods coming from China. Before he joined the administration, Kudlow was known for opposing tariffs and promoting free trade during his career as an economic analyst. Kudlow said Trump has taught him and others that the "China story has to be changed and reformed."
"We cannot let China pursue these unfair and unreciprocal trading practices," Kudlow said.
Democratic presidential candidate Beto O'Rourke said the U.S. needed to work with allies to hold China accountable on trade. He said he fears Trump is driving the global economy into a recession.
"This current trade war that the president has entered our country into is not working," O'Rourke said. "It is hammering the hell out of farmers across this country."
Last month, the Federal Reserve reduced its benchmark rate — which affects many loans for households and businesses — by a quarter-point to a range of 2% to 2.25%. It's the first rate cut since December 2008 during the depths of the Great Recession. Federal Reserve Chairman Jerome Powell stressed that the Fed was worried about the consequences of Trump's trade war and sluggish economies overseas.
"Weak global growth and trade tensions are having an effect on the U.S. economy," he said.
Breaking with historical norms, Trump has been highly critical of Powell as he places blame for any economic weakness on the nation's central bank for raising interest rates too much over the past two years.
"I think I could be helped out by the Fed, but the Fed doesn't like helping me too much," Trump complained Sunday.
Peter Navarro, who advises Trump on trade policy, shared that sentiment.
"The Federal Reserve chairman should look in the mirror and say, 'I raised rates too far, too fast, and I cost this economy a full percentage point of growth,'" Navarro said.
Trump acknowledged at least a potential impact on consumers when he paused a planned 10% tariff hike for many items coming from China, such as cellphones, laptops, video game consoles, some toys, computer monitors, shoes and clothing.
"We're doing (it) just for Christmas season, just in case some of the tariffs could have an impact," the president told reporters in New Jersey.
Navarro would not go even that far, saying Sunday "there's no evidence whatsoever that Americans consumers are bearing any of this."
Kudlow was interviewed on NBC's "Meet the Press" and "Fox News Sunday." O'Rourke spoke on NBC, and Navarro appeared on CNN's "State of the Union" and CBS' "Face the Nation."
Trump's trade war with China has been a target of criticism by Democrats vying to challenge him in 2020.
"There is clearly no strategy for dealing with the trade war in a way that will actually lead to results for American farmers or American consumers," said Mayor Pete Buttigieg of South Bend, Indiana, a Democratic presidential candidate. He said on CNN that it was "a fool's errand" to think tariff increases will compel China to change its economic approach.
Trump maintained that China's economy is struggling because of the tariffs and would like to make a trade deal with the U.S. He said he could make a "bad deal" and the stock markets would go up, "but it wouldn't be the right thing to do."
"I'm just not ready to make a deal yet," Trump said. "China would like to make a deal. I'm not ready."
Washington , Aug 19(AP/UNB) — A number of U.S. business economists appear sufficiently concerned about the risks of some of President Donald Trump's economic policies that they expect a recession in the U.S. by the end of 2021.
Thirty-four percent of economists surveyed by the National Association for Business Economics, in a report being released Monday, said they believe a slowing economy will tip into recession in 2021. That's up from 25% in a survey taken in February. Only 2% of those polled expect a recession to begin this year, while 38% predict that it will occur in 2020.
The economists have previously expressed concern that Trump's tariffs and higher budget deficits could eventually dampen the economy.
The Trump administration has imposed tariffs on goods from many key U.S. trading partners — from China and Europe to Mexico and Canada. Officials maintain that the tariffs, which are taxes on imports, will help the administration gain more favorable terms of trade. But U.S. trading partners have simply retaliated with tariffs of their own.
Trade between the U.S. and China, the two biggest global economies, has plunged. Trump decided last Wednesday to postpone until Dec. 15 tariffs on about 60% of an additional $300 billion of Chinese imports — granting a reprieve from a planned move that would have extended duties to nearly everything the U.S. buys from China.
The financial markets signaled the possibility of a U.S. recession last week, adding to concerns over the ongoing trade tensions and word from Britain and Germany that their economies are shrinking
The economists surveyed by the NABE were skeptical about prospects for success of the latest round of U.S.-China trade negotiations. Only 5% predicted that a comprehensive trade deal would result, 64% suggested a superficial agreement was possible, and nearly one quarter expected nothing to be agreed upon by the two countries.
The 226 respondents, who work mainly for corporations and trade associations, were surveyed between July 14 and Aug. 1. That was before the White House announced 10% tariffs on the additional $300 billion of Chinese imports, the Chinese currency dipped below the seven-yuan-to-$1 level for the first time in 11 years, and the Trump administration formally labeled China a currency manipulator.
As a whole, the business economists' recent responses have represented a rebuke of the Trump administration's overall approach to the economy.
Still, for now, most economic signs appear solid. Employers are adding jobs at a steady pace, the unemployment rate remains near a 50-year low, and consumers are optimistic. U.S. retail sales figures out last Thursday showed that they jumped in July by the most in four months.
The survey showed a steep decline in the percentage of economists who found the $1.5 trillion in tax cuts over the next decade "too stimulative" and likely to produce higher budget deficits that should be reduced, to 51% currently from 71% in August 2018.
Washington, Aug 17 (AP/UNB) — The Trump administration has informed Congress it plans to sell F-16 fighters worth $8 billion to Taiwan in a move that will inflame already high tensions with China.
Two U.S. officials and a congressional aide say the administration informally notified lawmakers of the proposed sale late on Thursday. They were not authorized to discuss the matter publicly and spoke on condition of anonymity.
The F-16 deal is highly controversial because China fiercely opposes all arms sales to Taiwan, which it regards as a renegade province, but has specifically objected to advanced fighter jets. The notification also comes as U.S. trade talks with China are stalled and amid unrest in Hong Kong that many fear could prompt Beijing to move militarily against the former British colony.
The State Department, which would ultimately authorize the sale, declined to comment, but members of Congress from both parties welcomed the proposal.
The chairman and ranking member of the House Foreign Affairs Committee, Reps. Eliot Engel, D-N.Y., and Michael McCaul, R-Tex., said in a joint statement that it "sends a strong message about the U.S. commitment to security and democracy in the Indo-Pacific" and "will help deter China as they threaten our strategic partner Taiwan and its democratic system of government."
"With China building up its military to threaten us and our allies, and the People's Liberation Army aiming thousands of missiles at Taiwan and deploying fighter aircrafts along the Taiwan Strait, now more than ever it is critical that Taiwan has the support needed to defend itself," said Republican Sen. Ted Cruz of Texas, a member of the Senate Foreign Relations Committee.
The informal notification starts a period of consultations with Congress and a formal announcement of the sale could be made as early as next month unless lawmakers object.
Just this week, America's top representative in Taiwan said Washington expects the island to continue increasing its defense spending as Chinese security threats to the U.S. ally continue to grow. W. Brent Christensen said the U.S. had "not only observed Taiwan's enthusiasm to pursue necessary platforms to ensure its self-defense, but also its evolving tenacity to develop its own indigenous defense industry."
That was a nod to President Tsai Ing-wen's drive to develop domestic training jets, submarines and other weapons technology, supplementing arms bought from the U.S.
Christensen is the director of the American Institute in Taiwan, which has served as the de facto U.S. Embassy in Taiwan since formal diplomatic relations were cut in 1979.
While China and Taiwan split during a civil war in 1949, Beijing still considers Taiwan Chinese territory and has increased its threats to annex the self-governing democracy by force if necessary.
Despite the lack of formal diplomatic ties, U.S. law requires Washington to ensure Taiwan has the means to defend itself.
Since 2008, U.S. administrations have notified Congress of more than $24 billion in foreign military sales to Taiwan, including in the past two months the sale of 108 M1A2 Abrams tanks and 250 Stinger missiles, valued at $2.2 billion, Christensen said. The Trump administration alone has notified Congress of $4.4 billion in arms sales to Taiwan.
China has responded furiously to all such sales and recently announced it would impose sanctions on any U.S. enterprises involved in such deals, saying they undermine China's sovereignty and national security.
Tsai has adamantly rejected Chinese pressure to reunite Taiwan and China under the "one-country, two-systems" framework that governs Hong Kong. She and many Taiwanese have said that the people of the island stand with the young people of Hong Kong who are fighting for democratic freedoms in ongoing protests.
Beijing has cut contacts with Tsai's government over Tsai's refusal to endorse its claim that Taiwan is a part of China and sought to increase Taiwan's international isolation by reducing its number of diplomatic allies to just 17.China has also stepped up efforts at military intimidation, holding military exercises across the Taiwan Strait and circling the island with bombers and fighters in what are officially termed training missions.
Dhaka, Aug 17 (AP/UNB) -You're not the only one confused about where the economy is headed. Just look at the stock market, where perplexed investors have been sending stocks on a wild ride in August.
And there could be plenty more where that came from. Two notoriously volatile months for stocks lie just ahead.
Stocks around the world jumped Friday to cap another tumultuous week. Investors have been frantically trying to rejigger their predictions about whether President Donald Trump's trade war and slowing economies around the world will drag the United States into a recession. In the U.S., the result was a week where the Dow Jones Industrial Average had four days where it rose or fell by more than 300 points — with an 800-point drop thrown into the mix.
On Friday, the S&P 500 rose 1.4%. The Dow climbed 1.2% and the Nasdaq picked up 1.7%. But each index still finished with a third-straight weekly decline.
Stocks, bonds and other investments heaved up and down throughout the week, with worries hitting a crescendo on Wednesday when a fairly reliable warning signal of recession flipped on in the U.S. Treasury market.
Friday marked the seventh time in the last 10 days that the S&P 500 swung by at least 1%, something that hasn't happened since the end of 2018, the last time investors were getting worried about a possible recession. At that time, they were concerned about rising interest rates, along with the trade war.
Don't expect the volatility to go away anytime soon, analysts say. No one knows when Trump's trade war will find a resolution, nor whether all the uncertainty it's created will push enough businesses and shoppers to hold off on spending and cause a recession. Some investors are digging in for trade tensions to last through the 2020 election.
"We're also heading into a tough season for the market," said Emily Roland, co-chief investment strategist at John Hancock Investment Management. "September and October tend to be the most volatile of the year for markets. We've been talking to investors for that reason to look for areas to prune risk within a portfolio."
The S&P 500 has lost an average of 1.1% in September over the last 20 years, making it the worst-performing month of the year. October's track record is better, but it includes the worst monthly performance in that stretch, a nearly 17% drop in 2008.
But Roland and other professional investors also caution that this kind of turmoil is actually normal for the market, when looking at it from a very long-term point of view. The U.S. stock market historically has had such bursts of tightly packed volatile days, interspersed between longer periods of calm. Since early 2009, whenever the S&P 500 has had a drop of 3% in a day, it either preceded or followed another such drop within a month 70% of the time.
"What's been abnormal is the super-low volatility" that investors have been enjoying for much of this bull market, which began in 2009, said Brian Yacktman, portfolio manager of the YCG Enhanced fund.
He sees the volatility as an opportunity to buy stocks at cheaper prices, and he's recently been partial to bank stocks, which have been hammered on worries that lower interest rates will hurt their profits.
"When you have volatility like this, you're actually buying the market on sale," said Rob Scheinerman, CEO of AIG Retirement Services. "That's a great thing."
Technology companies and banks did the most to drive Friday's broad rally as investors regained some appetite for riskier holdings. Utilities, which have been one of the safer havens for investors this month, lagged the market.
The S&P 500 rose 41.08 points, or 1.4%, to 2,888.68. The Dow, which had an 800-point drop earlier in the week, added 306.62 points, or 1.2%, to 25,886.01. The Nasdaq climbed 129.38 points, or 1.7%, to 7,895.99.
Investors favored smaller company stocks, which pushed up the Russell 2000. The index rose 31.99 points, or 2.2%, to 1,493.64.
Even with the latest bout of turbulent trading, the S&P 500 is still having a good year. The broad market index is up 15.2% for 2019. Similarly, the Nasdaq is still up 19% for the year.
Long-term bond yields also climbed Friday. The yield on 10-year Treasury rose to 1.56% from 1.52% late Thursday.
The bounce for yields followed a weeklong slide that included a sharp drop on Wednesday that rang yet another alarm bell for the economy. The 10-year Treasury yield dropped below the yield on the two-year Treasury, a rare occurrence and one that has historically suggested a recession may be a year or two away.
Investors are hoping that the Federal Reserve will continue to cut interest rates in order to shore up economic growth. The central bank lowered interest rates by a quarter-point at its last meeting. It was the first time it lowered rates in a decade.
Benchmark crude oil rose 40 cents to settle at $54.87 a barrel. Brent crude oil, the international standard, rose 41 cents to close at $58.64 a barrel. Wholesale gasoline rose 2 cents to $1.66 per gallon. Heating oil was unchanged at $1.81 per gallon. Natural gas fell 3 cents to $2.20 per 1,000 cubic feet.
Gold fell $7.10 to $1,512.50 per ounce, silver fell 9 cents to $17.10 per ounce and copper was unchanged at $2.59 per pound.
The dollar rose to 106.29 Japanese yen from 106.11 yen on Thursday. The euro weakened to $1.1093 from $1.1107.