Five Things You Need to Know to Start Your Day

Written by
Sybilla Gross
Written by

Sybilla Gross

Twitter
WhatsApp
Facebook
Reddit
Email

(Bloomberg) --

China pressures “Tariff Man” Trump, a U.S. administration envoy says there was quid pro quo in the Ukraine drama, and the Australian outback may have the answer to the renewable energy industry's biggest challenge. Here are some of the things people in markets are talking about today.

Give It Up

China is setting its price for signing an interim trade deal with the United States: Drop the tariffs. The question is whether President Donald Trump will pay it. With talks underway over a narrow agreement to defuse the escalating trade war, Beijing has asked the Trump administration to eliminate some of the duties the president has imposed. China also made clear that new tariffs are a nonstarter. For Trump, the self-proclaimed “Tariff Man,” the challenge is how — or indeed whether — to walk back duties that have formed a central plank of his effort to remake U.S.-China trade. Trump and his Chinese counterpart Xi Jinping had planned to sign a “Phase One” deal next week, but the Asia-Pacific summit in Chile where that was expected to happen has now been canceled.

Quid Pro Quo

In the latest on the impeachment inquiry, Trump has been contradicted again. A U.S. administration envoy testified that the White House pressured Ukraine for a promise of an investigation into political rival Joe Biden in exchange for an Oval Office meeting for the country's new president. That goes against Trump's repeated assertions there was no quid pro quo. Gordon Sondland, U.S. ambassador to the European Union, said the demands being made on the Ukrainian government were pushed by Trump's personal lawyer, Rudy Giuliani, and were initially just related to corruption, but “kept getting more insidious” as time went on, according to a transcript of his testimony to three House committees.

Mild Markets

Stocks in Asia looked set for a muted start Wednesday after a gauge of the American services sector showed signs of improvement, offsetting conflicting news flow on the U.S.-China trade discussions. The dollar climbed and Treasuries declined. Futures in Japan and Hong Kong signaled a flat start, but Australian contracts rose modestly. News that U.S. service industries expanded more than forecast in October triggered a brief equity rally, but pushed market pricing for another rate cut from the Federal Reserve further out, and the S&P 500 Index closed marginally lower. Elsewhere, oil climbed on trade enthusiasm and gold sank more than 1.5%.

IPOs, Take Heed

Heading towards an IPO? You might want to study WeWork's startling fall from grace first, according to Jamie Dimon. “I think there are lessons to be learned about these valuations, how you go public, how you treat the public shareholder — and those lessons should be learned by everyone who wants to go public,” the CEO of JPMorgan said in an interview Tuesday on CNBC. “I've learned a few myself.” WeWork went from being one of the most-anticipated IPOs of the year to being a cash-strapped firm forced to accept a rescue package at a fraction of its previous valuation. The company had been valued as recently as January at $47 billion after an investment from SoftBank, but last month turned to the Japanese conglomerate for a bailout that placed its worth at less than $8 billion.

Power Up

The answer to the renewable energy industry's biggest challenge is emerging in the Australian outback. Early next year, one of the first power projects that combine solar and wind generation with battery storage is planning to start up in northern Queensland state. Hybrid projects like Kennedy Energy Park aim to tackle a problem faced by climate change challengers, and grid planners, across the globe: How to firm-up intermittent renewable power so that the lights stay on when the sun doesn't shine or the wind doesn't blow. It could also be a precursor of what's to come in the next decade — plunging green technology costs are opening up markets and suppliers are seeking new avenues to combat falling margins.