Closing Stock Market SummaryThe major indices closed near session highs on Friday, preserving their weekly gains in front of the Memorial Day weekend. The S&P 500 increased 0.2%, the Nasdaq Composite increased 0.4%, and the Russell 2000 increased 0.6%. The Dow Jones Industrial Average (-0.04%) finished just below its flat line.
From a sector perspective, investors leaned defensively, evident by the positive performances from the S&P 500 real estate (+2.2%), utilities (+1.1%), and consumer staples (+0.3%) sectors. The information technology (+0.4%) and communication services (+0.5%) sectors also closed higher.
The tech sector was perked up by shares of NVIDIA (NVDA 361.05, +10.04, +2.9%) after the company reported positive quarterly results and upbeat guidance. Conversely, many of the cyclical sectors closed lower, including energy (-0.7%) and financials (-0.3%). Energy stocks were clipped by the decline in oil prices ($33.25, -0.71, -2.1%).
The price action was relatively muted throughout the day, with the broader market barely reacting to positive or negative news. The S&P 500 traded lower for most of the day, so the positive finish was good to see for the bulls.
Today's negative news came out of China as reports indicated it was going to implement national security laws on Hong Kong to tighten its control over the region. The Hang Seng Index declined 5.6% on Friday, while shares of Alibaba (BABA 199.70, -12.46, -5.9%) declined 6% despite beating quarterly estimates.
Separately, NIAID Director Fauci told media outlets that he was "cautiously optimistic" about Moderna's (MRNA 69.00, +1.95, +2.9%) COVID-19 vaccine candidate and that it was possible to develop a vaccine by the end of the year.
U.S. Treasuries closed mixed. The 2-yr yield increased two basis points to 0.17%, while the 10-yr yield decreased two basis points to 0.66%. The U.S. Dollar Index increased 0.4% to 99.77.
Investors did not receive any economic data on Friday and will not receive any on Monday due to the market's closure for Memorial Day.
- Nasdaq Composite +3.9% YTD
- S&P 500 -8.5% YTD
- Dow Jones Industrial Average -14.3% YTD
- Russell 2000 -18.8% YTD
More than a tune-up
22 May 2020 By Antony Currie, Christopher Thompson
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The brouhaha about President Donald Trump not always wearing a mask while visiting a Ford Motor plant on Thursday may provide the carmaker’s embattled boss with a welcome distraction. Friday marks three years since Chief Executive Jim Hackett took the wheel from ousted predecessor Mark Fields – and he has had a rough ride: Ford has lost half its value during his tenure, plummeting to $22 billion, compared to General Motors’ 23% drop. A merger with Volkswagen could be the way forward.
The two rivals are already collaborating on electric and autonomous vehicles. It’s a decent way to share the huge costs of developing the next generation of cars. But it doesn’t solve their respective weaknesses.
The U.S. market has been $75 billion Volkswagen’s weak link for a long time. In 2019, the German automaker’s market share in light vehicles was a mere 4%, according to Jefferies, including the Porsche and Audi brands. Joining forces with Ford would give the two almost a fifth of U.S. sales, rivaling GM.
Ford, meanwhile, has struggled to turn a sustainable profit in Europe and has stumbled in China. By contrast, the latter is VW’s most significant single market, accounting for two-fifths of its global vehicle deliveries. A merger would make the new company the largest carmaker in the world by volumes sold.
A deal would be financially compelling, too. Assume a VolksFord combo can cut the same 2.4% of overall costs as Fiat Chrysler Automobiles and Peugeot are for their tie-up. That’d save nearly $10 billion a year. Taxed and capitalized, those could be worth $65 billion once restructuring costs of $14.5 billion are subtracted, equal to around two-thirds of the automakers’ current combined market value.
Both companies have convoluted family ownership, though. The Porsche-Piech families hold 53% of VW votes, while the Fords control 40% of the company thanks to supervoting stock. Resolving that to both sides’ satisfaction presents a major stumbling block to striking a deal. Were they to succeed, VW Chair Herbert Diess could end up driving a more powerful model – and Hackett will have found a graceful exit.
Burberry: check it out
The British fashion house looks well-placed to ride out the pandemic in style
When staging a turnround, timing matters. After two years of preparatory slog, Burberry boss Marco Gobbetti expected sales and profits to be accelerating by now. The pandemic, which has forced the British fashion house to close half its stores, has changed all that. On Friday, it passed its dividend and warned the first quarter would be severely hit.
The luxury industry is expected to lose as much as a third of its sales this year. Given that, the company struck a confident pose. The share price rose by as much as 5 per cent at one point on news that April sales in China and South Korea had bounced back. Those figures were flattered by the repatriation of tourist spending. Half of its Chinese clients normally buy abroad. Even so, it shows designer Riccardo Tisci’s “classic meets eccentric” vibe is getting traction.
Burberry boasts it is well prepared to navigate the coronavirus crisis, and not just because it retooled its Yorkshire factory to make medical gowns. It has enough liquidity to cope with prolonged store closures — £1.2bn in all, including £300m from the government’s commercial paper scheme.
The drop off in fourth-quarter sales led to an 11 per cent increase in inventories, one reason why free cash flow slumped to £66m from £301m last year. Still Burberry can draw comfort from its reduced reliance on wholesalers, now accounting for 18 per cent of sales, down from 50 per cent five years ago. That gives it more control over its unsold clobber, limiting the risk of damage to the brand.
The shares may have spent long enough on the discount rails. They are down 35 per cent this year, more than twice as far as sector leader LVMH. Much depends on the Chinese consumer who is expected by Bain to account for half of luxury purchases globally by 2025. She already accounts for 40 per cent of Burberry’s sales, higher than the sector average. If Burberry can build on that, its turnround will only be delayed, not derailed.
Hedge funds bet on Europe stocks as short selling bans expire
Citadel, Millennium and Marshall Wace among firms increasing short positions
US and UK hedge funds have unleashed a fresh wave of bets against continental European companies, immediately after bans on short-selling expired in six countries this week.
Citadel, Millennium Management and Marshall Wace were among funds that shorted stocks as soon as France, Italy, Spain, Austria, Greece and Belgium lifted their restrictions just before midnight on Monday.
On Tuesday and Wednesday, the proportion of regulatory disclosures in those six countries that showed an increase in a short position hit 75 per cent, its highest level this year, according to analysis from data group Breakout Point.
“It is almost as if demand that was contained for many weeks got finally unleashed,” said Breakout Point founder Ivan Cosovic.
Among stocks that funds have shorted are Air France-KLM, against which Sandbar Asset Management and Marshall Wace have raised bets, French cable maker Nexans and Spanish renewable energy firm Ence Energia Y Celulosa. US giant Millennium has increased its short position in the latter.
Marshall Wace also increased its bet against Italy’s Banco BPM to 0.83 per cent of the outstanding shares, while Citadel raised its bets against Italian energy services company Saipem and French auto parts firm Valeo on both Tuesday and Wednesday.
Marshall Wace, Millennium and Citadel declined to comment, while Sandbar did not respond to requests for comment.
News of the short positions is likely to reignite debate about whether banning such wagers is effective.
Regulators introduced the curbs in the middle of March as markets convulsed and investors struggled to assess the economic impacts of coronavirus. The one-month bans were then rolled over in April.
The executive director of FMA, the Austrian market regulator, said the restrictions had “made an important contribution to absorb the irrational overreactions of the markets”, while French regulator the AMF pointed to the “normalisation” of the implied volatility of the market index.
However, critics of the bans say short selling adds to the liquidity of the market and helps prick bubbles. They also point out that bets against a stock are often balanced out by “long” positions in another stock, often in the same sector.
UK regulator the FCA said in March that there was “no evidence” that short selling had driven falls in share prices. Jack Inglis, head of global hedge fund industry body AIMA, said last week that such bans “don’t achieve their intended aims and instead damage the market and disadvantage end-investors”.
This week’s data from Breakout Point, which includes only positions taken on Tuesday and Wednesday, showed a higher proportion of short positions being increased than the roughly 60 per cent recorded for the week of March 9, when stocks were plunging at the height of fears over the pandemic.
Exchanges saw a sharp pick-up in volumes traded this week. Just over €44.7bn of shares changed hands on Tuesday, the first day after the restrictions expired, according to data from CBOE Europe. That was the highest daily total for May and also higher than the average daily volume of €39.9bn in April. Stock exchanges in Paris, Milan and Madrid, which were subject to the ban, also enjoyed their most active days of the month.
Emirates expects all its aircraft to be flying in 2 years
Airline’s head tells FT he plans to fully deploy fleet including A380 superjumbo by summer of 2022
The president of Emirates expects to have all its planes flying in two years’ time, including its fleet of A380 superjumbo jets.
Tim Clark, who heads the Dubai-based carrier, said its current fleet of A380s, which will cease to be manufactured from next year, would continue to play an important part in the airline’s future.
He said the carrier, one of the world’s largest, was planning to fully deploy all its aircraft in the summer of 2022 based on its outlook for a recovery in air travel to take up to two years.
It comes as other airlines also laid out their recovery plans this month, with British Airways owner IAG forecasting it would take three years before passenger demand returned to normal. Ryanair plans to resume about 40 per cent of its flights in July.
In an interview with the Financial Times, Sir Tim dismissed suggestions that Emirates would permanently decommission a large portion of its 115-strong A380 fleet.
“At the moment, I’ve got 115 sitting there. We’ve always known that up until that point in time . . . in 2022 there are going to be a number that will have to go into long-term storage,” he said.
“We’re not getting rid of any of them apart from I think three that are coming out and nine 777s that were scheduled to come out this year.”
He added that the A380 had a “place in the Emirates international network on the scale it has before. Albeit not today or fully next year, but the year after I think there will be a place for it and I think it is going to be extremely popular.”
Sir Tim’s comments come just days after Air France announced a €500m writedown as it said it would permanently withdraw its fleet of nine A380s.
Last year Airbus announced plans to stop making the 550-seat double-decker in 2021 following poor sales. It has eight to build for Emirates, but Sir Tim would not comment on speculation it might cancel this order although he acknowledged it was in talks with Airbus.
Emirates this week became the latest airline to tentatively restart a small number of routes, including Australia to UK, after halting its regular operations since the end of March following widespread lockdowns and travel restrictions around the world.
The Dubai-based airline, followed by Qatar Airways and Abu Dhabi’s Etihad, has disrupted the aviation industry over the past two decades with their superconnector model, linking east and west through three Gulf hubs.
But alongside its rivals, it has been hit hard by the coronavirus crisis. This month, the airline warned it would have a “huge impact” on its future financial performance as it forecast it would take at least 18 months for travel demand to return to some normality.
The government-owned airline has in the first three months of this calendar year raised Dh4.4bn ($1.2bn) in additional liquidity through term loans and other facilities and will continue to tap the bank market to cushion the impact of Covid-19 on cash flow.
Sir Tim would not comment on how many job cuts the airline will have to make. “All I will say is that the optimistic [business] scenario is driving what we do now and therefore the business has to be structured in such a way on the basis of that way forward.”
But he stood by Emirates’ hub strategy. “It’s a business model that has worked for us extremely well for the last 35 years.
“We have made money every single year bar six months of one of them and it has worked in the most horrific of trading conditions, geopolitical conditions and social economic conditions. As the world has transformed itself from 1985 to 2020, Emirates has grown with it.”
Gapping down
In reaction to disappointing earnings/guidance:
- SSL -7.1%, HPE -6.5%, AGYS -5.7%, FL -4.8%, ROST -3%, CHUY -2.5%, PRSP -2.2%, INTU -1.6%, BKE -1.6%
Other news:
- GERN -27% (prices 107,049,375 shares of its common stock and pre-funded warrants to purchase 8,335,239 shares of common stock)
- CFRX -15.6% (prices offering of 11,797,752 shares of common stock and related warrants to purchase 8,848,314 shares of common stock with an exercise price of $4.90 per share, in exchange for consideration equating to $4.45 for one share of common stock and a warrant to purchase 0.75 shares of common stock)
- SNDX -14.6% (announces receipt of final results of E2112 trial; primary endpoint was not achieved)
- HOTH -11.7% (prices 1,818,182 shares of common stock at $2.75 per share)
- AMRN -10.7% (announces trial to evaluate effects of VASCEPA on patients with COVID-19)
- DVAX -9% (prices 14 mln shares of its common stock at $5.00 per share)
- PAE -5.9% (awarded $158 mln US Air Force contract)
- FIVN -1.6% (prices offering of $650 mln of 0.500% convertible senior notes due 2025)
Analyst comments:
- ACB -7.8% (downgraded to Underperform from Hold at Jefferies)
- ROKU -2.8% (downgraded to Equal-Weight from Overweight at Stephens)
- ZTO -2.2% (downgraded to Neutral from Overweight at JP Morgan)
- AINV -2.1% (downgraded to Sell from Neutral at Citigroup)
- OKE -2% (downgraded to Neutral from Overweight at JP Morgan)
- GLMD -1.7% (downgraded to Neutral from Buy at B. Riley FBR)
Gapping up
In reaction to strong earnings/guidance:
- PLUS +7.1%, PANW +7.1%, RAMP +6.9%, ELF +6.7%, A +6.2%, SPLK +6.1%, CRMT +4.9%, DE +3%, DECK +2.5%, NVDA +1.7%, PDD +1.6%
Other news:
- TLSA +13.4% (intends to demerge its StemPrintER genomics-based personalized medicine business as a separate listed company )
- AQST +12.8% (announces advancement of monetization strategy for APL-130277)
- OSUR +7.4% (OMNIgene ORAL saliva collection device included in FDA Administration Emergency Use Authorization granted to P23 Labs)
- XENE +3.1% (provides clinical update; has received recent FDA feedback on XEN496 program, co believes it can initiate a Phase 3 trial later this year)
- CDXC +3% (files for 1,225,490 share common stock offering by selling shareholders)
- BBBY +1.9% (announces plans to re-open stores and expand store fulfillment services)
Analyst comments:
- CVTI +2% (upgraded to Overweight from Equal-Weight at Stephens)
- CCI +1.3% (upgraded to Outperform from Perform at Oppenheimer)
Early premarket gappers
- Gapping up:
- PLUS +7.1%, RAMP +6.9%, PANW +6.3%, ELF +5.3%, A +5.3%, AQST +5.2%, TLSA +4.9%, CRMT +4.9%, SPLK +3.9%, CDXC +3%, DECK +1.5%, DE +1.5%, XENE +0.9%
- Gapping down:
- GERN -20.4%, SNDX -19.5%, CFRX -13.7%, HOTH -13.2%, DVAX -11.1%, HPE -6.9%, PAE -5.9%, AGYS -5.7%, ROST -3%, ANF -1.6%, FIVN -1.6%, PRSP -1.6%, AZN -1.5%, CHUY -1.3%, LULU -0.9%, PDD -0.8%, BSX -0.5%
China’s Hong Kong Crackdown Could Put Trump in an Unwelcome Spot
A proposed new security law has senators calling for sanctions. But the president is reluctant to jeopardize his ties to President Xi Jinping.
WASHINGTON — China’s plans to impose sweeping new security powers over Hong Kong could inflict even more damage on already fraught relations between Washington and Beijing, and force President Trump into uncomfortable decisions about whether to maintain his self-described friendly ties with the Chinese president, Xi Jinping.
The proposal announced in Beijing on Thursday provoked outrage in Congress, where bipartisan support grew quickly for new sanctions on Chinese officials and entities that Mr. Trump — who has shown limited interest in Hong Kong’s plight and a continued desire to carry out terms of a trade deal with Beijing — may not welcome.
Giving the government broad new powers to crack down on pro-democracy activists could effectively end Hong Kong’s limited independence and crush a protest movement that has agitated for nearly a year against China’s authoritarian Communist Party.
“This move by Beijing would rip away the remaining veneer of ‘one country, two systems.’ It would precipitate a crisis in U.S.-China relations,” said Evan Medeiros, a senior Asia director at the National Security Council under President Barack Obama and a professor at Georgetown University.
“Nationalist voices in the U.S. and China would have a party with this; 2020 is beginning to feel more and more like 1948 when the first crises of the Cold War broke out over Berlin,” Mr. Medeiros said, predicting that the United States and China would probably impose sanctions or other punishments on each other.
The Chinese government, which announced the move, is likely to put it in place by fiat during the National People’s Congress, which begins on Friday. How Mr. Trump will react is unclear.
Leaving the White House for a trip to Michigan on Thursday, he told reporters that he did not know “what it is,” but added, “If it happens, we’ll address that issue very strongly.”
The White House otherwise had no comment.
When mass demonstrations against Beijing took place in Hong Kong last summer, Mr. Trump — who has shown little interest in issues of democracy and human rights generally — had a muted response despite bipartisan pressure to show more support for a protest movement with open sympathies for the United States.
And even as he has lashed out at China’s government for its handling of the winter coronavirus outbreak in Wuhan, helping to prompt the sharpest downturn in relations with Beijing in decades, Mr. Trump has taken care not to insult or offend Mr. Xi. Because of the pandemic’s economic toll, China has yet to meet purchasing demands outlined in a January trade agreement between the two nations. Mr. Trump and his economic advisers would like to see the deal fulfilled to aid his re-election prospects.
But in recent months the Trump campaign has increasingly focused on its message of China as a villainous threat to American economic and security interests, while portraying Mr. Trump’s Democratic opponent, former Vice President Joseph R. Biden Jr., as too conciliatory toward Beijing. Mr. Trump has repeatedly muddied that message with his deferential tone toward Mr. Xi.
“Any effort to impose national security legislation that does not reflect the will of the people of Hong Kong would be highly destabilizing, and would be met with strong condemnation from the United States and the international community,” Morgan Ortagus, a State Department spokeswoman, said in a statement on Thursday.
“We urge Beijing to honor its commitments and obligations in the Sino-British Joint Declaration — including that Hong Kong will ‘enjoy a high degree of autonomy’ and that people of Hong Kong will enjoy human rights and fundamental freedoms — which are key to preserving Hong Kong’s special status in international affairs and, consistent with U.S. law, the United States’ current treatment of Hong Kong,” she said.
Secretary of State Mike Pompeo has said the State Department has yet to issue to Congress a mandatory report examining the autonomous status of Hong Kong in order to gauge continuing actions from Beijing before coming to a conclusion. The department might recommend that the United States no longer give Hong Kong preferential treatment as a territory that has autonomy under China.
By midday Thursday, Senators Patrick J. Toomey, Republican of Pennsylvania, and Chris Van Hollen, Democrat of Maryland, announced that they would propose legislation to impose sanctions on Chinese officials and entities that enforce the planned national security laws.
The measure would also impose sanctions on banks that do business with entities deemed to violate the Basic Law, a legal document that is supposed to guarantee Hong Kong significant autonomy until 2047.
“The communist regime in Beijing would like nothing more than to extinguish the autonomy of Hong Kong and the rights of its people,” Mr. Toomey said in a statement. “In many ways, Hong Kong is the canary in the coal mine for Asia. Beijing’s growing interference could have a chilling effect on other nations struggling for freedom in China’s shadow.”
China’s attempted crackdown on Hong Kong has been a rare cause for unity between the parties, with both liberals and conservatives rallying to the cause of democracy and condemning Mr. Xi’s increasingly authoritarian impulses.
“The USA cannot let this stand,” Senator Josh Hawley, Republican of Missouri and a staunch Trump ally and China hawk, wrote on Twitter. Mr. Hawley said he would introduce a Senate resolution “condemning this attempted crackdown” and calling on “all free nations to stand with” Hong Kong.
“This proposed legislation is a sign of Beijing’s weakness, not its strength,” said Representative Eliot L. Engel, Democrat of New York and the chairman of the House Foreign Affairs Committee. “Hong Kong’s special status is a benefit to China and the world. I don’t understand why Beijing continues to imperil that status with proposals such as this.”
Mr. Trump’s China policy has long been a battleground for dueling camps, usually featuring economic officials who favor a more conciliatory relationship and national security policymakers, led by Mr. Pompeo and senior National Security Council aides, who view China as a dangerous strategic rival that must be checked.
At the height of Mr. Trump’s trade negotiations with China in 2018 and 2019, the economy-centric view seemed to prevail and helped to explain Mr. Trump’s repeated fulsome praise of Mr. Xi as a “brilliant leader” and a “great man.”
How many people have lost their jobs due to coronavirus in the U.S.?
Over 38 million people have filed for unemployment since March. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
What are the symptoms of coronavirus?
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
How can I protect myself while flying?
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Is ‘Covid toe’ a symptom of the disease?
There is an uptick in people reporting symptoms of chilblains, which are painful red or purple lesions that typically appear in the winter on fingers or toes. The lesions are emerging as yet another symptom of infection with the new coronavirus. Chilblains are caused by inflammation in small blood vessels in reaction to cold or damp conditions, but they are usually common in the coldest winter months. Federal health officials do not include toe lesions in the list of coronavirus symptoms, but some dermatologists are pushing for a change, saying so-called Covid toe should be sufficient grounds for testing.
Can I go to the park?
Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.
How do I take my temperature?
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
Should I wear a mask?
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
What should I do if I feel sick?
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
How do I get tested?
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
How can I help?
Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities.
But the emergence of the coronavirus from Wuhan, and the Chinese government’s initial efforts to conceal it, enraged Mr. Trump, who saw his re-election imperiled as a result, and in recent weeks the hawkish camp has pressed the sinister theory, with no evidence, that the virus escaped from a Chinese lab.
On Wednesday, the National Security Council released a White House strategy document detailing a “competitive” American approach devised in part to “to compel Beijing to cease or reduce actions harmful to the United States’ vital, national interests and those of our allies and partners.”
The same day, the Trump administration angered Beijing by approving as much as $180 million in torpedo sales to Taiwan, whose de facto independence mainland China rejects but which the Trump administration strongly supports.
Mr. Trump did not give any indication on Thursday how he will react to the congressional effort to impose sanctions.
After Congress passed legislation last fall, Mr. Trump was noncommittal about whether he would sign the measure. But he eventually did on the evening before Thanksgiving, ensuring it gained minimal publicity.
This time his conservative allies are more adamant than ever that Mr. Trump must not look the other way. “I think this has absolutely got to be a line in the sand,” said Stephen K. Bannon, a former Trump White House strategist who now devotes much of his time to rallying conservatives to fight China’s communist leadership.
Regardless, experts said Beijing’s move would inevitably worsen a relationship that many already believe has become a kind of new Cold War.
“Beijing seems to have made the calculation that there is no financial price it won’t pay in order to eliminate the sight of millions of Chinese clamoring for democracy on a daily basis,” said Elizabeth Economy, the director for Asia studies at the Council on Foreign Relations.
“The Trump White House, unfortunately, has little leverage and even less influence with the Xi administration at this point,” she added. “Relations between the United States and China are essentially in a free fall.”