Good morning! Here’s what you need to know in markets on Wednesday.
1. Japan’s Nikkei share average tumbled to a four-month low in early trade on Wednesday as risk appetite was sapped by a stronger yen on concerns about tensions between the United States and North Korea. The Nikkei fell 0.7% to 19,254.67, the lowest level since May 1.
2. Britain will end the free movement of labour immediately after Brexit and introduce restrictions to deter all but highly-skilled EU workers under detailed proposals set out in a leaked Home Office document. “Put plainly, this means that, to be considered valuable to the country as a whole, immigration should benefit not just the migrants themselves but also make existing residents better off,” the paper says, according to the Guardian, which obtained the document.
3. Billionaire investor Steve Cohen is reportedly edging closer to launching his new fund. ShoreBridge Capital Partners, which is gauging interest in a potential new hedge fund run by Cohen, is telling potential investors to expect a trove of marketing materials in the coming weeks, according to a Bloomberg News report. That trove “will include due diligence documents, track records and other information investors need to decide whether they will pony up cash for the new firm, Stamford Harbor Capital.”
4. Russia’s inflation has dropped to a post-communist low. Inflation fell to 3.3% year-over-year in August, according to the country’s state statistics service. That’s the lowest reading in the post-USSR era, according to data from Trading Economics.
5. Some oil traders in Asia are looking to snap up crude cargoes from the United States after Hurricane Harvey closed U.S. refineries, denting local demand and pushing out the price spread between U.S and Atlantic Basin crude benchmarks. Trade sources said the closures pushed the prompt-month spread between West Texas Intermediate crude and Brent crude to the widest in two years at nearly $6 a barrel last week, pushing Asian traders to hunt for competitively priced U.S crude.
6. Wall Street bankers are set to make a fat payday of as much as $105 million from United Technologies’ huge $30 billion acquisition of Rockwell Collins. Morgan Stanley will haul in an estimated $35 million to $45 million for advising United Technologies, according to Jeffrey Nassof, director of consulting firm Freeman & Co. JPMorgan and Citigroup will share an estimated $45 million to $60 million for advising Rockwell Collins.
7. The bond market continues to reflect fears that the US government may soon run out of funding. A $20 billion auction on Tuesday for Treasury bills that expire in four weeks – just after the deadline for a bill to fund the government – drew the highest yield since the 2008 financial crisis. For some perspective, the high yield, at 1.30%, was higher than when the government shut down in 2013. This indicates that bond traders want a premium in return for expecting the government to repay them just as it may be running out of funding.
8. Regulators must do more to help mom-and-pop investors better understand the potential risks posed by cyber crime and new technologies used to commit fraud, U.S. Securities and Exchange Commission Chairman Jay Clayton said on Tuesday. “I am not comfortable that the American investing public understands the substantial risks that we face systemically from cyber issues,” he said during a panel discussion at New York University.
9. Brexit could be reversed if economic pain prompts a change in public opinion that brings a new generation of political leaders to power in Britain, former Conservative minister Michael Heseltine said.A supporter of EU membership, Heseltine said he saw a scenario in which Britain would not leave the European Union as scheduled in late March 2019.
10. Chocolate giant Mars is promising to spend close to $1 billion over the next few years fighting climate change. The $35 billion food giant behind brands like M&Ms, Skittles, and Twix on Wednesday launched its “Sustainability in a Generation” plan, aiming to reduce the carbon footprint of its business and supply chain by more than 60% by 2050.
And finally … Lingerie tycoon Michelle Mone and her partner Doug Barrowman today launched a £250 million property development in Dubai which will see hundreds of luxury apartments offered for sale in Bitcoin. They say the project is pitched at investors who profited from the Bitcoin boom and want to convert their digital assets into physical ones.