Markets point lower to end the week. US equities are modestly lower in early trading, following negative closes in Asia and a mixed session in Europe. Tensions with China are weighing on investors’ minds as President Donald Trump signed an executive order banning US residents from doing business with several notable Chinese social media apps. Congress continues to struggle to find common ground on the latest wave of COVID-19 stimulus, though Republican Senate Majority Leader Mitch McConnell said he expects one “in the near future.”
White House takes action against Chinese tech. President Trump signed an executive order banning US residents from doing business with Tiktok, its parent ByteDance, and WeChat (owned by Tencent) for 45 days. The move weighed on these stocks in Asian markets overnight and is the latest in a series of escalations of US-China tensions that are unlikely to ebb anytime soon as the election approaches. Separately, the United States moved toward tightening disclosure requirements for Chinese companies listed on US exchanges.
July US Payrolls beat. The economy added almost 1.8 million jobs in July, ahead of the median economist estimate of 1.5 million, while the unemployment rate fell from 11.1% to 10.2%. Because of the date of the survey week, data may not fully reflect the economic impact of the recent rise in COVID-19 cases. In the last three months, the economy has added back more than 9 million of the 22 million jobs lost in March and April. We take a closer look at the improving labor market today on the LPL Research blog.
COVID-19 news. New cases fell 12.3% week over week to 59,700 on Thursday, but that drop is overstated because of 10% fewer tests (source: Johns Hopkins). At 7–8%, positive test rates are still too high. The seven-day average case counts have fallen in 43 states over the past week. The downward trend in hospitalizations has continued while death rates are showing signs of peaking. India reported a record number of new cases; an uptick in cases in France may lead to travel restrictions.
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