(Bloomberg) — The Senate attached a measure to the annual defense policy bill that would subject some US investments in China to new requirements, complementing restrictions being weighed by the Biden administration amid increased concern in Washington over China’s development of advanced technology.
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The measure, approved 91 to 6 on Tuesday, would require firms to notify the government about certain investments in China and other countries of concern, although they wouldn’t be subject to review or possible prohibition.
Similar to a planned executive order from the administration, it would focus on investment in high-tech sectors, including semiconductors, artificial intelligence and quantum computing, as well as hypersonics and satellite-based communications.
The legislation, which was introduced by Senators Bob Casey, a Democrat from Pennsylvania, and John Cornyn, a Texas Republican, is an update of a measure they introduced last Congress, and could place additional pressure on the administration to enact the order it’s been working on since last year.
The White House is aiming to propose the order by the end of August, which puts it on track for 2024 implementation after it winds its way through a review and comment period. Unlike the proposed legislation, the executive order potentially would prohibit some new investments.
Read more: US Plans Narrow China Tech Investment Limits, Likely by 2024
Both senators have pushed the administration to issue the executive order, with Casey advocating for congressional action to bolster the White House efforts, according to a person familiar with the matter.
Cornyn and Casey have circulated a copy of the bill to the administration, industry and Senate colleagues, the person said.
Asked about the executive order last week, White House Press Secretary Karine Jean-Pierre said last week that she didn’t have a timeline for its introduction.
“It’s a complicated process,” she said. “We want to make sure that we get this right, and it takes some time.”
Senate Majority Leader Chuck Schumer has said he aims for the chamber to pass the defense bill, officially known as the National Defense Authorization Act, before leaving for August recess next week. The House will take up the amended version when it returns in September.
The proposed legislation would require firms to notify the Treasury Department 14 days in advance of investments and 14 days after secured transactions. It would cover investments including acquisitions, debt, subsidiaries and joint-ventures, as well as technology transfers.
The Senate also voted 91-7 to include a measure aimed at preventing individuals or companies from China, Russia, Iran or North Korea from buying US agricultural companies or farmland of more than 320 acres or valued at over $5 million. The legislation, introduced by Senators Mike Rounds of South Dakota and Jon Tester of Montana, would also make the Secretary of Agriculture an ex-officio member of the Committee on Foreign Investment in the US, also known as CFIUS.
(Updates with amendment on farmland purchases in final paragraph.)
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
