Markets Overview
- ASX SPI 200 futures up 0.1% to 7,169.00
- Dow Average up 0.2% to 34,500.73
- Aussie little changed at 0.6376 per US$
- U.S. 10-year yield fell 3.4bps to 4.2441%
- Australia 3-year bond yield rose 4.6 bps to 3.84%
- Australia 10-year bond yield rose 3 bps to 4.16%
- Gold spot up 0.2% to $1,919.71
- Brent futures down 0.9% to $89.82/bbl
Economic Events
Stocks retreated amid concern over how a Chinese ban on Apple Inc.’s iPhone could impact big tech, the industry that has driven this year’s market rally. Treasuries rose alongside the dollar.
The Nasdaq 100 underperformed as Apple slid about 6.5% in two days, wiping out $190 billion in value. The company’s suppliers such as Qualcomm Inc. and several megacaps like Nvidia Corp. got hit. Apple breached the key 100-day moving average, which is seen as a bearish signal by some chartists.
“Apple’s growth story is heavily reliant on China, and if the Beijing crackdown intensifies, that could pose a big problem to the bunch of other megacap tech companies that rely on China,” said Edward Moya, senior market analyst for the Americas at Oanda.
China plans to expand a ban on the use of iPhones in sensitive departments to government-backed agencies and state companies, a sign of growing challenges for Apple in its biggest foreign market and global production base. In addition, Beijing intends to extend that restriction far more broadly to a plethora of state-owned enterprises and other government-controlled organizations, people familiar with the matter said.
Apple is unlikely to face a material financial impact from China’s restrictions, according to Evercore ISI’s Amit Daryanani. Government officials were probably already avoiding the company’s products, and it would be hard for the nation to take more substantive action against Apple without affecting jobs in the country — which is where most iPhones are assembled, he wrote.
Traders kept a close eye on the latest economic data, with solid jobless claims figures reinforcing the case for the Fed to keep rates elevated. Applications for US unemployment benefits fell to the lowest level since February.
After climbing in the immediate aftermath of the report, two-year US yields fell below 5%. The Bloomberg Dollar Spot Index saw a small advance, and was on track for its longest streak of weekly gains since 2005.
Other News
WATFORD GAP, England — There is no Mason-Dixon Line in England to settle debate about where the North ends and the South begins. So physicists at Sheffield Hallam University used artificial intelligence to draw one.
Their conclusion: The line runs right past Watford Gap rest area, a clump of fast-food outlets and gas pumps on a highway 80 miles from London.
In England, as in the U.S., differences between North and South extend beyond geography to encompass money, class and culture. Northerners say they are friendlier than Southerners, whom they often regard as snobs. Southerners don’t much like to travel too far into the North, which they see as a land of rain and fading factory towns. Southerners often call their evening meal “dinner”; Northerners call it “tea.”
The scientists’ goal was to replace preconceptions with something more tangible.
“A lot of our identity is carried in the food we eat, isn’t it?” said Robin Smith, one of the physicists. “So we thought, would that make sense? By examining our food habits, would it reveal some kind of divide?”
Smith and his researchers fed the locations of popular Northern and Southern chain restaurants into the kind of artificial neural network that also is used to predict the outcome of nuclear reactions. Their objective was to identify the line separating Greggs stores, a Northern favorite selling sausage rolls and steak pies, from Pret-a-Manger, a London-based chain whose menu includes vegan avocado wraps and specialty coffees.
England has been wrestling with the North-South question for generations.
George Orwell suggested the divide began to take shape during the Industrial Revolution and the rise of the great Northern factory towns of Manchester, Sheffield and Leeds.
Today, there is a wealth gap between the North and the wealthier South, where London is located. There also is a culinary divide, including in what people put on their fish and chips: the traditional salt and vinegar in London, some gravy or curry sauce further north.
The AI generated a heat map showing Northernness or Southernness. That the dividing line passed Watford Gap was uncanny, Smith said.
When it opened in 1959, Britain’s first freeway rest area was immediately seen by Londoners as the marker dividing the South from the rest of England. The phrase “north the Watford Gap” became a common reference to the North.
The Beatles and the Rolling Stones crossed paths there while touring in the early 1960s, refueling at England’s first 24-7 American-style diner. Stones guitarist Ronnie Wood recalled in a memoir that Jimi Hendrix had heard so much about it he thought it was an exclusive London nightclub.
David Lawrence, a professor at London’s Kingston University who has written about Britain’s freeways, helped produce a musical for the BBC to mark the rest area’s 50th anniversary. He said the topography of the site forms a natural gateway from the hills of the North to the plains and estuaries of the South.
“Once you go through the Gap, it does feel geographically that you’re going downhill to London,” he said.
The rest stop’s managers have placed a wrought-iron signpost outside the restaurants pointing to north and south. Some of the people passing through the Gap recently, though, weren’t buying into the notion that it was a dividing line.
“I don’t know, it’s still the bit in the middle, isn’t it?” said Nicola Whalen, who was taking a break with her young daughter while traveling north to her home in Manchester.
“You can say it’s where the South ends, but I wouldn’t call it the North,” said Pete Ward, a trucker from Birmingham. “Northerners can get very prickly about what’s Northern and what’s not.”
Some Northerners say Watford Gap — not to be confused with the town just outside the capital called Watford — simply isn’t far enough away from London. Broadcaster Stuart Maconie, who wrote a book about the North called “Pies and Prejudice,” suggests the region begins about 100 miles from the Gap, in Crewe — partly because that is where women in shops and cafes start referring to customers as “love” or “pet.”
Lawrence, the freeway specialist, said Watford Gap is what “the North thinks the South is, and it’s what the South thinks the North is.”
People who live in the central part of England, in cities including Birmingham and Leicester, said the debate ignores them entirely.
Patrick Karneigh Jr., a rapper with English band Northern Boys, said he still is annoyed at how the band got its name, noting that he isn’t Northern at all. “I’m from Sutton Coldfield, just outside Birmingham, but people called us the Northern Boys because we’re not from London,” he complained.
Smith, the physicist, says he understands the resentment because he grew up in a Birmingham suburb. He is looking to fine-tune his neural network. He wants to feed in more more data points associated with North and South, such as the location of supermarkets with a strong Northern or Southern base.
He also is working on a new AI model to settle another old debate — whether it’s better to run through a rainstorm or stoically walk, as a Northerner might.
“It’s a good way to get people interested in the science and show there are all sorts of applications for it,” he said.
(Wall Street Journal)
