Tensions between North Korea and the U.S. are on the rise again, as China bans initial coin offerings, and it's a big week in central-bank speak.
Korea crisis
U.S. President Donald Trump agreed to back billions of dollars in new weapons sales
to South Korea after North Korea’s largest nuclear test, while in a
push for harsher sanctions his ambassador to the United Nations said Kim
Jong Un’s regime is “begging for war.” Hours later, the Seoul-based
Asia Business Daily reported that Pyongyang was preparing to launch an
intercontinental ballistic missile before Saturday.
Japan plans to evacuate about 60,000 of its citizens in South Korea if
the U.S. decides to strike the rogue nation, regardless of whether plans
are made public, Nikkei reported, citing an unnamed government source.
Russian President Vladimir Putin rejected U.S. calls for new sanctions against North Korea on Tuesday. Geopolitical strife is just one event risk
facing global investors this September -- the cruelest month for U.S.
equities -- with hawkish central-bank chatter and U.S. fiscal
brinkmanship also looming.
China vs. Paris Hilton
China declared initial coin offerings illegal with immediate effect on Monday,
stopping in its tracks a key fundraising vehicle for digital token
sales, worth at least $1.25 billion this year. Bitcoin fell as low as
$4,098, 16 percent below Friday's close, before paring losses,
as investors and speculators mulled the biggest regulatory challenge so
far to the burgeoning digital-currency market. Meanwhile, Paris Hilton,
the celebrity famous for being famous, jumped on the ICO bandwagon
by taking to Twitter to
back a new currency called Lydian. The move underscores the craze
for the financing mechanism that raises money directly from the public.
Aerospace giant
United Technologies Corp. will buy Rockwell Collins Inc.
for about $23 billion in one of the biggest aviation deals ever. The
resulting aircraft-parts giant will be better positioned to withstand
competition from planemakers Boeing Co. and Airbus SE amid a slew of
pricing discounts and output growth. The fragmented nature of the
industry suggests the deal will receive the regulatory greenlight,
analysts say. Rockwell shareholders will receive $140 a share in cash
and stock, an 18 percent premium to the Aug. 4 close, before Bloomberg News reported on deal talks. Rockwell shares last traded at $130.61.
Markets rise
European
stocks rebounded after a mixed Asia session, as data from China to the
euro area signaled the global recovery remains intact. West Texas
Intermediate crude rose 1 percent to $47.78 a barrel and copper extended
its rally to a three-year high. Futures on the S&P 500 Index fell
0.27 percent at 5:50 a.m. Eastern Time.
Monetary messages
Investors are gearing up for a busy week
filled with monetary pronouncements and economic data, with voting
Federal Reserve officials Lael Brainard, Neel Kashkari, Robert Kaplan,
and Bill Dudley hitting the stage on the heels of Friday's
weak jobs report. U.S. durable-goods figures, trade-balance data, and
the release of the Fed’s Beige Book will shed light on the economic
trajectory, after a purchasing managers' index indicated the euro area
is poised for the fastest expansion in a decade. The Reserve Bank of
Australia left benchmark interest rates unchanged at a record low of 1.5
percent for the thirteenth month running, as expected. Later this week,
Mario Draghi may offer clues on European Central Bank plans to pare its
bond-buying program after an interest-rate decision on Thursday.