“If related enterprises are transferring technology abroad during trade, investment or technical cooperation that fall under the regulations, they are advised to immediately consult provincial-level commerce department offices and handle that in accordance with the law”, Chinese Commerce ministry spokesman Gao Feng calmly explained on Thursday, in the process making the laughable assertion that revisions made to a list of products subject to export controls weren’t aimed at halting ByteDance’s forced divestiture of TikTok in the US.
Gao’s remarks effectively confirmed that Beijing intends to have the final say on whether TikTok’s international assets are divested — and to whom. The eleventh hour intervention is poised to ice any deal for TikTok involving a US company. Donald Trump continues to insist that such a sale must be completed sooner rather than later.
Also on Thursday, Beijing called Mike Pompeo’s new rules for Chinese diplomats “illegal”, and said China would deliver a “necessary response”.
Meanwhile, Russia claimed it doesn’t know anything about any poisonings. “There’s no basis for accusations against the Russian state and we aren’t inclined to accept any”, Dmitry Peskov said Thursday. “We don’t want our partners in Germany or any other European country to rush to conclusions”.
Let’s be honest: Russia has no “partners” in the developed world. Not really, anyway. Moscow’s staunchest international allies are in Beijing, Tehran, and Caracas. (And Damascus, if Syria ever manages to reconstitute itself as a functioning state.)
Consider geopolitical tensions still boiling.
Don’t expect that to impact asset prices, though. European shares rose again Thursday, led higher by French equities which were pleased with fresh stimulus from Paris, where Emmanuel Macron will spend €100 billion on what he’s calling a “French Relaunch”.
Included in the effort are tax cuts, subsidies for workers, and money for green initiatives, which Europe understands are important, despite the US having decided Mother Earth can pound sand years ago. France’s stimulus plan isn’t a surprise. It was telegraphed months in advance, but it pleases markets nevertheless.
French shares have lagged their German counterparts on the year and are also trailing the Euro Stoxx 50.
The euro extended losses, as the market increasingly sees the ECB pushing back against unwanted currency strength at a time when the recovery is still in its infancy. The common currency was tracking for a third day of losses, the longest streak in months.
“The shift in sentiment following the break of 1.20 was abrupt and disappointing for USD bears. EUR/USD turned sharply, even before the stronger ISM data and the Lane comment (the latter, some argue, was taken out of context)”, Deutsche Bank said Thursday, adding that “profit taking has been prevalent ever since and it’s hard to see us returning there any time soon”.
Final reads on August services and composite PMIs for Europe were mixed. Italy posted downside surprises, while Germany’s flash prints were revised noticeably higher.
If you’re wondering what the future holds for the US tech rally, which has pushed the Nasdaq 100 to a 30% premium to its 200-DMA, Berenberg now hears some echoes of the dot-com bubble, even if they aren’t deafening.
“Leadership and aggressive returns are being fueled by a combination of aggressive liquidity provision and clear signs of economic rebuild after the flash crash and recession from earlier this year”, a note reads. Berenberg also flags retail investor participation (i.e., Robinhood) as one among several “warning flags”.