- Thomson Reuters
Good morning! Here’s what you need to know in markets on Friday.
1. Asian shares came under renewed pressure on Friday after reports U.S. President Donald Trump was preparing to step up a trade war with Beijing and ready to impose more tariffs on Chinese imports. Many emerging market currencies were also frail after Argentina’s peso sank on Thursday despite the central bank’s interest rate hike.
2. U.S. consumer spending increased solidly in July, pointing to strong economic growth early in the third quarter, while a measure of underlying inflation hit the Federal Reserve’s 2 percent target for the third time this year. Other data on Thursday showed an increase in new applications for unemployment benefits last week, but the underlying trend continued to point to a robust labor market. Strong domestic demand, rising inflation and a tightening jobs market likely will keep the U.S. central bank on course to increase interest rates for a third time this year in September.
3. With Tesla’s shares briefly dipping below the $300 level on Thursday, the electric carmaker ceded its seat as the most shorted U.S. stock to Amazon, according to data from financial technology and analytics firm S3 Partners. Tesla short interest in dollars, calculated using the number of shares sold short and the share price, stood at $9.93 billion, on Thursday, just shy of $9.95 billion for Amazon, S3 Partners data showed.
4. Britain’s Whitbread said on Friday it had agreed to sell coffee chain Costa to Coca Cola for an enterprise value of £3.9 billion ($5.08 billion). The deal was unanimously agreed by the Whitbread board to be in the best interests of shareholders, the company said in a statement. It acquired the chain in 1995, for £19 million when it had only 39 shops.
5. Following seven straight days of declines in Argentina’s peso, President Mauricio Macri decided to make a rare address to the nation on Wednesday to reassure markets that the South American country had no trouble paying its debts. Instead, his two-minute televised speech announcing a deal with the International Monetary Fund (IMF) to speed up disbursement of a $50 billion loan raised alarm about Argentina’s ability to finance itself, prompting a steep 7% drop in the currency.
6. ZTE reported a first-half net loss of 7.8 billion yuan ($1.1 billion) on Thursday, weighed down by a ban on U.S. firms selling parts to the Chinese telecom equipment maker that forced it to cease operations for three months. The result compared with the 7 billion to 9 billion yuan net loss estimate disclosed last month, and the 2.3 billion yuan profit booked in the same period a year earlier.
7. U.S. President Donald Trump has told aides he wants to move ahead on a plan to impose tariffs on Chinese imports worth $200 billion next week, Bloomberg News reported, further ratcheting up trade tensions between the world’s two largest economies. Both countries have levied tariffs on $50 billion on the other’s goods and threatened more duties. U.S. and Chinese officials ended talks last week without major breakthroughs on alleviating trade issues.
8. Britain is committed to continuing free trade with Kenya after it leaves the European Union, Prime Minister Theresa May said during a visit to Nairobi on Thursday. May also said Britain and Kenya had signed a new compact to expand their joint work on security.
9. Amazon will begin selling food and drinks online in Mexico, including snacks, sweets and wines, it said on Thursday, a move that could intensify its competition with Wal Mart de Mexico to claim shoppers in a nascent e-commerce market. Online shopping represents a fraction of total retail sales in Mexico but has grown swiftly, putting Amazon and its rivals in a race to ramp up investments in logistics, technology and product offerings.