The VIX, a measure of the volatility of US markets, rose more than 5% on Friday, although the index remains well below its recent highs in March.
But the inclusion of WeChat indicates that Washington is expanding its efforts to restrict Chinese tech companies from operating in the United States.
The moves to ban TikTok and WeChat represent an “unusual intervention by the U.S. government in the consumer technology sector,” according to Paul Triolo, head of geotechnology at Eurasia Group, a policy risk advisory firm.
It also marks the first time the government “has attempted to ban a software application running on millions of mobile phones” in the United States, Triolo wrote in a note to customers Friday.
Daniel Ives, an analyst at Wedbush Securities, called the action an “important step up from the tensions between the US and China.” Tencent, he noted, is a “stalwart” of China’s tech sector.
That’s not all: the president’s working group on financial markets said Thursday that U.S. stock markets should introduce new rules that could force Chinese companies to open their books to U.S. regulators.
The U.S. Securities and Exchange Commission has yet to codify the rules. Eurasia Group thinks this could happen this fall, noting that the SEC is part of the working group.
What it all means: The fight over China’s tech clout in the United States is gathering steam by the day, posing a major risk to markets just as investors would rather move forward to a potential Covid-19 vaccine.
America’s job reimbursement could be steam lost
After improving in May and June, the U.S. labor market looks fragile again.
That would be a solid improvement, but would mark a sharp slowdown from the 4.8 million positions added in June, reports my CNN Business colleague Anneken Tappe.
Consider this space: July was a difficult month for employers as Covid-19 cases erupted in Sun Belt states and federal funds for companies began to dry up. Although most economists believe the pace of job recovery is slower in July, some say it is reversed.
Lydia Boussour, senior U.S. economist at Oxford Economics, said she expects Friday’s report to show a loss of 280,000 jobs, instead of a profit. This would signal even more clearly that the foundations of the recovery are cracking.
There have been warning signs that the July figures could be disappointing. The ADP report on private pay released on Wednesday, which is often used as a barometer for the official government report, showed only 167,000 jobs added in July, compared to 1.5 million expected. And initial claims for unemployment benefits tick around mid-July, putting an end to four months of declines.
But claims for the first time for the week ending August 1, declining again, hit their lowest level since March. That’s the picture mudded.
“July is so uncertain because some areas, some sectors continued to open at the beginning of the month, and then things started to change,” said Jeanette Garretty, chief economist at Robertson Stephens Wealth Management.
Uber’s delivery service is bigger than its driving business
When the pandemic stopped its ride-sharing business, Uber’s delivery service took on new interest. Now, it’s the largest source of revenue for Uber, reports my CNN Business colleague Sara Ashley O’Brien.
“Our delivery business alone is now as big as our Rides business was when I joined the company in 2017,” CEO Dara Khosrowshahi said in a call to discuss the results. “We’ve essentially built a second Uber in under three years.”
That is thanks in part to nearly $ 400 million in restructuring costs. The company employed roughly 25% of its workforce, as 6,700 employees, as it struggled with pressure from the pandemic.
Investor Insights: Results sent Uber shares down 3.5% in premium trading, though Uber’s focus on food delivery – including its $ 2.65 billion Postmaten purchase last month – has helped boost support of their share price this year.
Next
The U.S. jobs report for July posts at 8:30 a.m. ET.
Next New Week: Tencent and Baidu report revenue as technical tensions of US-China rise.
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