Optimism Props Up Global Stocks
Investors’ optimism returned on Monday around the global markets as stocks rose over the planned trade talks between the United States and China. European shares opened higher with the pan-European STOXX rising 0.7% and most markets across the region gaining.
There was optimism too in the Asian stock markets as the MSCI’s broadest index of Asia-Pacific shares outside Japan climbing nearly 1%. Hong Kong’s Hang Seng index added 1.4%. Everyone is hoping that the U.S. and China can find a compromise to resolve and end their trade dispute.
According to a Wall Street Journal report, the dates for the lower-level trade talks are August 22 and 23. The talks come ahead of the imposition of new tariffs on $16 billion worth of goods from both the U.S. and China.
Public Hearings on Proposed Tariffs Begins
The public hearings on the proposed duties of up to 25% will commence on Monday in Washington and will run for 6 days. This is part of the efforts of United States President Donald Trump and the U.S. Trade Representative to pressure China to make sweeping changes to its trade and economic policies.
However, a broad cross-section of U.S. businesses is worried. The proposed tariffs target $200 billion of Chinese imports. Americans will feel the crunch. Thousands of consumer products would be directly hit when the tariffs take effect by late September. And most of the items are consumed daily.
The U.S. Chamber of Commerce said in written testimony for the hearing, “USTR’s proposed tariffs on an additional $200 billion of Chinese imports dramatically expands the harm to American consumers, workers, businesses, and the economy.”
Meanwhile, top U.S. business lobbying group see a lack of “coherent strategy” in the Trump administration. The way to address China’s theft of intellectual property and other harmful trade practices is to call for “serious discussions” with Beijing.
Pepsi to Acquire Israel’s Soda Stream
PepsiCo (PEP) announced on Monday that it is buying Israel’s household drink-machine maker SodaStream (SODA). The deal is worth $3.2 billion. Pepsi will have the competitive edge in health-conscious beverages over chief rival Coca-Cola Inc. (KO).
The cost of the acquisition is $144 per share in cash which represents a 10.9% premium to the Friday closing price of SODA. The machines of SodaStream turns tap water into carbonated water. Pepsi can now diversify its portfolio of snacks and beverages.
Saudi Fund to Invest in Tesla Rival
The Public Investment Fund (PIF) which Elon Musk named as the prospective investor in Tesla Inc.’s (TSLA) take-private plan is in talks to invest in electric-car startup Lucid Motors Inc. According to Reuters News, the Saudi Arabia’s sovereign wealth fund made an initial investment of $500 million in the Newark, California-based company.
If PIF wants to gain majority ownership, it could increase the investment to $1billion. Former executives from Tesla and Oracle Corp. (ORCL) are the founders of Lucid Motors. The electric-car startup has planned to start production later this year.
Apple Removes Gambling Apps in China
Apple Inc. (AAPL) has pulled illegal lottery apps from its App Store in China due to tightening regulations. Gambling apps are banned in China and the state media has been criticizing the tech giant for allowing them on their App Store.
Apple already confirmed the pullout of around 25,000 apps from its Chinese store in an effort to cooperate with regulators. The American company vowed to be more vigilant and stop these types of apps to be on the App Store.