10 things you need to know in markets August 31

Cappuccinos
sit on a table in Costa Coffee in Loughborough
Thomson Reuters

Good morning! Here’s what you need to know in markets on Friday.

1. Asian
shares came under renewed pressure on Friday after reports U.S.
President Donald Trump was preparing to step up a trade war with
Beijing and ready to impose more tariffs on Chinese
imports. Many emerging market currencies were also
frail after Argentina’s peso sank on Thursday despite the central
bank’s interest rate hike.

2. U.S.
consumer spending increased solidly in July, pointing to strong
economic growth early in the third quarter, while a measure of
underlying inflation hit the Federal Reserve’s 2 percent target
for the third time this
year. Other data on Thursday
showed an increase in new applications for unemployment benefits
last week, but the underlying trend continued to point to a
robust labor market. Strong domestic demand, rising inflation and
a tightening jobs market likely will keep the U.S. central bank
on course to increase interest rates for a third time this year
in September.

3. With
Tesla’s shares briefly dipping below the $300 level on Thursday,
the electric carmaker ceded its seat as the most shorted U.S.
stock to Amazon, according to data from financial technology and
analytics firm S3 Partners. Tesla short interest in
dollars, calculated using the number of shares sold short and the
share price, stood at $9.93 billion, on Thursday, just shy of
$9.95 billion for Amazon, S3 Partners data showed.

4. Britain’s
Whitbread said on Friday it had agreed to sell coffee chain Costa
to Coca Cola for an enterprise value of £3.9 billion ($5.08
billion). The deal was unanimously agreed by
the Whitbread board to be in the best interests of shareholders,
the company said in a statement. It acquired the chain in 1995,
for £19 million when it had only 39 shops.

5.
Following seven straight days of declines in Argentina’s peso,
President Mauricio Macri decided to make a rare address to the
nation on Wednesday to reassure markets that the South American
country had no trouble paying its
debts. Instead, his two-minute televised speech
announcing a deal with the International Monetary Fund (IMF) to
speed up disbursement of a $50 billion loan raised alarm about
Argentina’s ability to finance itself, prompting a steep 7% drop
in the currency.

6. ZTE
reported a first-half net loss of 7.8 billion yuan ($1.1 billion)
on Thursday, weighed down by a ban on U.S. firms selling parts to
the Chinese telecom equipment maker that forced it to cease
operations for three months. The result
compared with the 7 billion to 9 billion yuan net loss estimate
disclosed last month, and the 2.3 billion yuan profit booked in
the same period a year earlier.

7. U.S.
President Donald Trump has told aides he wants to move ahead on a
plan to impose tariffs on Chinese imports worth $200 billion next
week, Bloomberg News reported, further ratcheting up trade
tensions between the world’s two largest economies.
Both countries have levied tariffs on $50 billion on the other’s
goods and threatened more duties. U.S. and Chinese officials
ended talks last week without major breakthroughs on alleviating
trade issues.

8. Britain
is committed to continuing free trade with Kenya after it leaves
the European Union, Prime Minister Theresa May said during a
visit to Nairobi on Thursday. May also said
Britain and Kenya had signed a new compact to expand their joint
work on security.

9. Amazon
will begin selling food and drinks online in Mexico, including
snacks, sweets and wines, it said on Thursday, a move that could
intensify its competition with Wal Mart de Mexico to claim
shoppers in a nascent e-commerce market. Online
shopping represents a fraction of total retail sales in Mexico
but has grown swiftly, putting Amazon and its rivals in a race to
ramp up investments in logistics, technology and product
offerings.

10. Boeing
has been awarded a $805 million contract for design, delivery and
support of four MQ-25A unmanned air vehicles for the U.S. Navy,
the Pentagon said in a statement on Thursday.