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London (CNN Business)The White House maintains that the US-China trade deal reached late last year remains in place. But after comments from White House trade adviser Peter Navarro roiled markets, one thing is clear: Investors are still extremely sensitive to news and rhetoric from Washington.
What’s happening: President Donald Trump tweeted that the trade deal remains “fully intact” after Navarro’s remarks in a Monday interview with Fox News sparked confusion. At one point the interviewer described Trump’s efforts to make progress on the trade deal and asked Navarro, “Is that over?”
“It’s over,” Navarro answered. US stock futures and the yuan tumbled.
Navarro later said his statement was taken “taken wildly out of context,” and assurances from the White House have been sufficient to placate investors. US futures are now back in positive territory. Read MoreBut the episode makes clear that traders remain laser-focused on what the White House says about the US-China relationship, even as attention is focused on the economic recovery and trajectory of coronavirus infections.Watch this space: China’s compliance with the terms of the “phase one” trade deal is an open question given the economic fallout from coronavirus. China committed to increasing purchases of US goods and services by at least $200 billion over a two-year period.Not everyone thinks the deal is on track. “There appears no realistic way China is either willing or able to stick to the deal’s terms,” Rabobank global strategist Michael Every said in a note to clients Tuesday. That’s left investors on edge about Trump’s next move, especially as he trades blame with China over handling of the pandemic. “The question is how will the president confront China to revive his narrative,” said Sebastien Galy, a strategist at Nordea Asset Management. Politics could become more of a force on Wall Street as strategists look ahead to the second half of the year. Analysts expect the US election in November to hang over the stock market as a key source of uncertainty. “While the pandemic is likely to remain the most important driver of equity markets both in the US and elsewhere, we think the US election could play a key role in the US equity market’s performance,” Jonas Goltermann, senior economist at Capital Economics, told clients this week.The calculus: Investors are weighing the prospect of greater predictability in the event Trump loses against the potential for higher corporate taxes should the Democrats take the White House and Congress.
Apple’s move to in-house chips send shares soaring
A long-rumored change is finally official: Apple has announced that it’s ditching Intel chips for its Mac computer line, and will instead make its own.
Apple is overhauling the iPhone homescreen and upgrading AirPodsWhy it matters: Dubbed “Apple Silicon,” the new chips will give Apple more control over updates and user experience, and allow apps to work more seamlessly between the iPhone, iPad and Macs, my CNN Business colleague Kaya Yurieff reports.Apple plans to launch its first computer with the new chips by the end of this year and expects the entire transition to be completed in two years, according to CEO Tim Cook.Investor insight: The news helped send Apple shares up 2.6% to $358.87 on Monday, an all-time high.Other announcements at Apple’s Worldwide Developers Conference, which it live-streamed from Cupertino, highlighted the company’s ambitions to insert itself into a growing range of daily activities.A new iPhone feature aims to replace the car key. Apple will roll out the feature with the 2021 BMW 5 Series, but hopes to expand it to other models before long.Upgrades are also coming to AirPods, the company’s wireless earbuds, group chats on iMessage and the video-watching experience on Apple products. And of course, there are some pandemic tweaks: the Apple Watch will begin to offer a hand washing coaching function.
Tech companies slam US executive order on work visas
Silicon Valley and President Donald Trump are clashing againβ this time over immigration restrictions that will affect thousands of tech industry workers.
Tech companies slam Trump's executive order restricting H-1B visasThe latest: Trump signed an executive order on Monday expanding restrictions on several work visas until at least the end of this year, including the L-1 visa that allows companies to transfer employees from overseas offices and the H-1B program for workers in specialty occupations.Both visas are popular with the United States’ tech giants, and many were quick to condemn the executive order, my CNN Business colleagues Rishi Iyengar and Brian Fung report.”Immigration has contributed immensely to America’s economic success, making it a global leader in tech, and also Google the company it is today,” Google CEO Sundar Pichai said on Twitter. “Disappointed by today’s proclamation.”The executive order claims that restricting immigration will help the US economy recover from the shock of the coronavirus pandemic. Amazon contested that notion.”Preventing high skilled professionals from entering the country and contributing to America’s economic recovery puts American’s global competitiveness at risk,” a company spokesperson said.Need to know: The new restrictions will take effect on June 24. The Migration Policy Institute, a think tank in Washington, D.C., estimated that they would block 219,000 temporary workers.
Up next
The flash reading of the composite Purchasing Managers’ Index for the United States arrives at 9:45 a.m. ET.
Also today: New US home sales for May post at 10 a.m. ET.Coming tomorrow: Germany’s Ifo business climate survey for June gives a real-time look at how the country’s reopening has changed the outlook.
Source: edition.cnn.com
