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Five Things World Business Will be Talking About Today

September 5, 2017
North Korea “begging for war,” China bans initial coin offerings, and it’s a busy week in central-bank speak. Here are some of the things people in markets are talking about today.

Korea crisis

U.S. President Donald Trump agreed to back billions of dollars in new weapons sales to South Korea after North Korea’s largest nuclear test, while in a push for harsher sanctions his ambassador to the United Nations said Kim Jong Un’s regime is “begging for war.” Hours later, the Seoul-based Asia Business Daily reported that Pyongyang was preparing to launch an intercontinental ballistic missile before Saturday. Japan plans to evacuate about 60,000 of its citizens in South Korea if the U.S. decides to strike the rogue nation, regardless of whether plans are made public, Nikkei reported, citing an unnamed government source. Russian President Vladimir Putin rejected U.S. calls for new sanctions against North Korea on Tuesday. Geopolitical strife is just one event risk facing global investors this September — the cruelest month for U.S. equities — with hawkish central-bank chatter and U.S. fiscal brinkmanship also looming.

China vs. Paris Hilton

China declared initial coin offerings illegal with immediate effect on Monday, stopping in its tracks a key fundraising vehicle for digital token sales, worth at least $1.25 billion this year. Bitcoin fell as low as $4,098, 16 percent below Friday’s close, before paring losses, as investors and speculators mulled the biggest regulatory challenge so far to the burgeoning digital-currency market. Meanwhile, Paris Hilton, the celebrity famous for being famous, jumped on the ICO bandwagon by taking to Twitter to back a new currency called Lydian. The move underscores the craze for the financing mechanism that raises money directly from the public.

Aerospace giant

United Technologies Corp. will buy Rockwell Collins Inc. for about $23 billion in one of the biggest aviation deals ever. The resulting aircraft-parts giant will be better positioned to withstand competition from planemakers Boeing Co. and Airbus SE amid a slew of pricing discounts and output growth. The fragmented nature of the industry suggests the deal will receive the regulatory greenlight, analysts say. Rockwell shareholders will receive $140 a share in cash and stock, an 18 percent premium to the Aug. 4 close, before Bloomberg News reported on deal talks. Rockwell shares last traded at $130.61.

Markets rise

European stocks rebounded after a mixed Asia session, as data from China to the euro area signaled the global recovery remains intact. West Texas Intermediate crude rose 1 percent to $47.78 a barrel and copper extended its rally to a three-year high. Futures on the S&P 500 Index fell 0.27 percent at 5:50 a.m. Eastern Time.

Monetary messages

Investors are gearing up for a busy week filled with monetary pronouncements and economic data, with voting Federal Reserve officials Lael Brainard, Neel Kashkari, Robert Kaplan, and Bill Dudley hitting the stage on the heels of Friday’s weak jobs report. U.S. durable-goods figures, trade-balance data, and the release of the Fed’s Beige Book will shed light on the economic trajectory, after a purchasing managers’ index indicated the euro area is poised for the fastest expansion in a decade. The Reserve Bank of Australia left benchmark interest rates unchanged at a record low of 1.5 percent for the thirteenth month running, as expected. Later this week, Mario Draghi may offer clues on European Central Bank plans to pare its bond-buying program after an interest-rate decision on Thursday.

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