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More TikTok Turmoil For The US And China?

By Spreadex (Connor Campbell)Market OverviewAug 07, 2020 12:23
More TikTok Turmoil For The US And China?
By Spreadex (Connor Campbell)   |  Aug 07, 2020 12:23
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In a week that will also reveal the extent to which the UK economy contracted in Q2, August may continue to be dominated by the latest US-China tensions.

Lobbing a few tech grenades at China in the latest cold war flare-up, Donald Trump has continued to provoke Beijing by issuing an executive order banning any US transactions with Tencent and ByteDance – which own WeChat and TikTok respectively – within 45 days.

This puts further pressure for Microsoft to get their deal for TikTok’s US operations done by the Trump-mandated deadline of September 15th, and has caused the video-sharing app to threaten the US with legal action.

A handy distraction technique heading into November’s election, the President has justified his actions by claiming China is using these companies to ‘absolutely’ stealing the data of American citizens.

The worry from a market perspective surrounds what China will do in retaliation, especially since tensions between the 2 nations are already high following the tit-for-tat shuttering of consulates in Houston and Chengdu. A major escalation on the US-China front is the last thing investors, and the global economy, want to see.

Aside from the superpower showdown – and, of course, the ongoing covid-19 headlines – it’s a pretty busy week for US data. The JOLTS jobs openings number arrives on Monday, with PPI on Tuesday, and inflation on Wednesday. Thursday then sees the usual jobless claims reading – which has persistently remained at 7 digits since the pandemic hit the States – joined by the latest import prices figure. Friday, finally, ends with retail sales, industrial production and consumer sentiment.

It’s going to be a revealing week for the UK. On Thursday investors will find out how badly hit the economy was in the second quarter, with the Bank of England’s latest forecasts pointing to a 20%-plus contraction.

Investors will also be keeping an eye on Tuesday’s jobs report, especially the claimant count change for the month of July, while Thursday also sees the industrial and manufacturing production numbers.

Early Friday morning then sees China in focus – something that could be important for the FTSE’s commodity stocks – with the country’s fixed asset investment, industrial production, retail sales and unemployment rate readings.

Likely in thrall to the US-China situation, the Eurozone also has plenty of data to work through, starting with the Sentix investor confidence reading on Monday. The ZEW economic sentiment figures then are on Tuesday, with region-wide industrial production on Wednesday, German inflation on Thursday and the 2nd look at the Q2 GDP data on Friday.

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More TikTok Turmoil For The US And China?

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More TikTok Turmoil For The US And China?

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