US-China tensions rise over TikTok; markets eye manufacturing reports – business live | Business

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Tensions between the US and China are rising again after the US Secretary of State, Mike Pompeo, said Donald Trump will take action in coming days to tackle national security risks posed by TikTok and other Chinese software companies, as Microsoft revealed it was trying to buy TikTok’s parent company ByteDance.

Pompeo told Fox News show Sunday Morning Futures:

These Chinese software companies doing business in the United States, whether it’s TikTok or WeChat – there are countless more … are feeding data directly to the Chinese Communist party, their national security apparatus.

Could be their facial recognition patterns. It could be information about their residence, their phone numbers, their friends, who they’re connected to. Those are the issues that President Trump has made clear we’re going to take care of.

The Sun newspaper reported today that ByteDance is preparing to move its headquarters from Beijing to London under a deal approved by the UK government, a move that would clearly upset Trump, who has considered banning TikTok in the US.

Chinese state media said banning Tik Tok would be “a barbaric act of a rogue government”, and rejected the US’s claims about national security fears. A Global Times editorial, published on Sunday, said a Microsoft acquisition was “the hunting and looting of TikTok by the US government in conjunction with US high-tech companies”.

HSBC has warned it could ramp up cost cutting plans amid the Covid-19 crisis, after a $3.8bn bad debt charge sent profits plunging 82% in the second quarter, our banking correspondent Kalyeena Makortoff reports. The London-based bank makes 90% of its profits in Asia, and has also been impacted by the US-China trade war and other tensions.

HSBC’s chief executive Noel Quinn said:

Our first-half performance was impacted by the Covid-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility.

European stock markets finished in the red last week on Covid-19 fears, and after preliminary estimates for second-quarter GDP showed the eurozone, Germany and the US posting record economic declines between April and June. On Wall Street, tech stocks lifted the S&P 500 more than 0.7%, while the tech-focused Nasdaq rallied more than 1.7%, with Apple and Facebook hitting all-time highs.

Gold has hit a new record high: it touched $1,984.66 an ounce in early Asian trade, and is now flat at $1,975.8 an ounce. The WHO said on Friday that in the past 24 hours there were nearly 300,000 new coronavirus cases reported – the largest daily increase on record.

Lawmakers in the US have yet to reach an agreement on a proposed $1 trillion stimulus package. Republicans and Democrats reportedly made some progress over the weekend.

The latest Caixin survey of Chinese manufacturing was better than expected at 52.8 for July, while economists were expecting 51.3. The previous reading was 51.2. Any higher reading above 50 indicates faster expansion; any reading below 50 points to contraction.

In Asia, stock markets were mixed. Japan’s Nikkei rallied 2.3% while the Shanghai composite index rose 1.3% and Hong Kong’s Hang Seng lost 0.85%. European shares are being called higher, ahead of PMI manufacturing reports across the region.

The Agenda

  • 8:15am BST: Spain Markit manufacturing PMI for July (forecast: 52)
  • 8:45am BST: Italy Markit Manufacturing PMI (forecast: 51.2)
  • 8:50am BST: France Markit Manufacturing PMI final(forecast: 52)
  • 8:55am BST: Germany Markit Manufacturing PMI final (forecast: 50)
  • 9am BST: Eurozone Markit Manufacturing PMI final (forecast: 51.1)
  • 9:30am BST: UK Markit/CIPS Manufacturing PMI final (forecast: 53.6)
  • 2:45am BST: US Markit Manufacturing PMI final (forecast: 51.3)
  • 3pm BST: US ISM Manufacturing PMI (forecast: 53.6)