Market may climb anew this week

MANILA, Philippines — The stock market may continue to go up this week, sustaining the gains the previous weeks amid the scheduled resumption of US-China trade talks, traders said.

Michael Ricafort, chief economist at Yuchengco-owned Rizal Commercial Banking Corp. (RCBC), sees the index’s next resistance at the 8,000 mark.

“The Philippine Stock Exchange Composite index (PSEi) gained for the third week in four weeks by 58.85 points or 0.7 percent to close at 7,992.32, a new one-month high and also among four-month highs and also among 17-month highs,” Ricafort said.


This, he said, is amid improved global risk appetite recently with the scheduled resumption of the trade talks between the US and China by early October and recent gestures by both countries to improve the said trade talks.

“The next resistance is at 8,000, which is a gateway prior to further upside potential in the near future,” Ricafort said.


Earlier, US President Trump deferred by two weeks the scheduled higher tariffs (which would translate to additional five percent duties) on $250 billion US imports from China. Trump deferred this to Oct. 15 from Oct. 1 to improve the US-China trade talks.

Ricafort said this was a positive signal for the global financial markets.

China also agreed to exempt some US imports from tariffs for about a year starting Sept. 17, which Ricafort said was another positive signal for the markets.

“Trump administration plans to ease sanctions on Iran to help secure a meeting with Iranian leader Hassan Rouhani on the sidelines of the UN General Assembly in New York on Sept. 23. The markets are also anticipating the upcoming Fed rate-setting meeting on Sept. 18 amid possible 0.25 rate cut, which is another factor that could support sentiment in the global financial markets in the coming week,” Ricafort said.

source: philstar.com

'Tiananmen Square' crackdown in Hong Kong would harm trade deal — Trump

WASHINGTON — US President Donald Trump on Sunday warned China that carrying out a Tiananmen Square-style crackdown on Hong Kong pro-democracy protesters would harm trade talks between the two countries.

"I think it'd be very hard to deal if they do violence, I mean, if it's another Tiananmen Square," Trump told reporters in New Jersey. "I think it's a very hard thing to do if there's violence."

The months-long trade dispute between the US and China has been blamed for setting world financial markets on edge amid signs of a possible global economic slowdown.

Trump's comments came as Washington and Beijing look to revive pivotal talks aimed at ending their trade war.

Phone calls between both countries' deputies are planned for the next 10 days, and if those are successful, negotiations could resume, Trump's chief economic advisor Larry Kudlow said on Sunday.

Hong Kong has meanwhile been dealing with more than two months of protests and on Sunday saw a crowd that organizers said numbered some 1.7 million people march peacefully in the city despite rising unrest and stark warnings from Beijing.

Chinese state media has run images of military personnel and armored personnel carriers in Shenzhen, across the border from the semi-autonomous city.

In the bloody 1989 crackdown in Beijing's Tiananmen Square, China deployed tanks to end student-led protests, resulting in an estimated death toll of hundreds if not thousands.


If such a situation was repeated in Hong Kong, "I think there'd be... tremendous political sentiment not to do something," Trump said, referring to the trade negotiations with China.

Creeping authoritarianism

Under a deal signed with Britain, China agreed to allow Hong Kong to keep its unique freedoms when the former crown colony was handed back in 1997.

But many Hong Kongers feel those freedoms are being chipped away, especially since China's hardline president Xi Jinping came to power.

Trump stopped short of endorsing the protesters, saying, "I'd love to see it worked out in a humane fashion," and calling on Xi to negotiate with the dissidents.

Last week, China's state-run daily The Global Times said there "won't be a repeat" of Tiananmen Square in a rare reference to the crackdown.

Analysts say any intervention in Hong Kong by Chinese security forces would be a disaster for China's reputation and economy.

The weeks of demonstrations have plunged the financial hub into crisis, with images of masked, black-clad protesters engulfed by tear gas during street battles against riot police stunning a city once renowned for its stability.

The unrest was sparked by widespread opposition to a plan for allowing extraditions to the Chinese mainland, but has since morphed into a broader call for democratic rights in the semi-autonomous city.

Sunday's march, billed as a return to the peaceful origins of the leaderless protest movement, was one of the largest rallies since the protests began about three months ago, according to organizers the Civil Human Rights Front.

source: philstar.com

US-Mexico trade talks progressing but no breakthrough with China

WASHINGTON — Negotiations between the United States and Mexico to revise the nearly 25-year-old North American Free Trade agreement are making progress but will not wrap up this week, Mexico's Economy Minister Ildefonso Guajardo said Thursday.

But a Chinese delegation, in Washington for talks aimed at defusing the spiraling US trade war with Beijing, left without any breakthrough.

NAFTA and China have been two key targets of US President Donald Trump's aggressive trade strategy and he has largely brushed off concerns from the business community about the harm done to the US economy.

With NAFTA at least, there has apparently been progress.

The negotiations "are well advanced," Guajardo told reporters, but "we are not there yet."


Canada needs to re-engage in the talks before the NAFTA rewrite can be completed and "the only way that can happen is if we continue through the weekend and into next week," he added.

Guajardo and Mexico's Foreign Minister Luis Videgaray have been shuttling back and forth to Washington for more than a month for meetings with US Trade Representative Robert Lighthizer to try to iron out the bilateral issues, such as rules for the auto market, before the end of August.

Officials last week indicated they expected a breakthrough this week but "negotiations are highly complex," Guajardo said on his way into yet another meeting.

He has cautioned that some of the hardest issues were still on the table, including the US demand for a five-year "sunset clause," which would oblige the three countries to renew the pact regularly.

"There's been no indication of flexibility from the US on this issue," a senior Canadian official told AFP.

Nevertheless, Canadian Prime Minister Justin Trudeau said Thursday that he was "encouraged by the optimism expressed by the US and Mexico."

"We're ready to sit down and continue the hard work of modernizing and negotiating a better deal for all of us," he said, but stressed Canada would "only sign a good deal for Canadians."

Canada's top diplomat and chief NAFTA negotiator, Chrystia Freeland, said Wednesday she would rejoin the talks once Washington and Mexico City finish their bilateral discussions.

The three countries have been negotiating for a year to salvage the trade pact Trump says has been a "disaster" for the United States.

No breakthrough with China

As part of Trump's aggressive trade stance, Washington hit China with 25 percent punitive duties on another $16 billion in goods starting Thursday, triggering a swift tit-for-tat retaliation from Beijing.

China filed a complaint against the latest tariffs at the World Trade Organization the same day, the commerce ministry said.

Adding to the $34 billion targeted in July, that brings the total two-way trade weighed down by the steep tariffs to $100 billion, and the United States currently is considering hitting another $200 billion -- a move Trump indicated could come very soon.

"We've put a $50 billion number out there. Now, the total number is $250 billion," Trump said at the White House on Thursday. "And there's a 25-percent tax on that, now, coming in.... Some of it starts in a week."

Washington is accepting public comments on the $200 billion tariff tranche until September 6 -- but they could take effect soon after.

That is on top of US tariffs on Chinese appliances and solar panels, as well as steel and aluminum from around the world -- a total of 10,000 products.

China's Vice Commerce Minister Wang Shouwen and Vice Finance Minister Liao Min concluded two days of talks with a US team lead by David Malpass, US Treasury under secretary for international affairs -- their first trade discussions since June.

White House Deputy Press Secretary Lindsay Walters said the talks concluded after officials "exchanged views on how to achieve fairness, balance and reciprocity in the economic relationship."

Economic damage

US businesses have become increasingly concerned about the exchange of tariffs, which are raising prices for manufacturers and hurting US consumers and farmers.

But Trump has been unapologetic, insisting that his tough tactics will work.

Federal Reserve officials warn escalating trade disputes are "a potentially consequential downside risk" for the economy, possibly fueling inflation and impeding investment.

S&P Global Ratings on Thursday downgraded motorcycle maker Harley Davidson's debt rating, citing retaliatory tariffs among other "headwinds" facing the company.

And National Retail Federation Vice President Jonathan Gold said the tariffs "threaten to increase costs for American families and destroy the livelihoods of US workers."

China's commerce ministry said Thursday the country "firmly opposes the tariffs and has no choice but to continue to make the necessary counter-attacks."

US Commerce Secretary Wilbur Ross said Beijing would not be able to continue to retaliate at the same pace as Washington, noting: "We have many more bullets than they do."

However, Beijing also could target the local operations of US corporations with inspections and boycotts, as it has done in past disputes with South Korea and Japan.

source: philstar.com