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President Trump delivers his second State of the Union address



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President Donald Trump will address the nation Tuesday night to deliver the State of the Union, his third address to a joint session of Congress while in office.

Trump is expected to tout his economic record and make a plea for bipartisanship as he addresses lawmakers and their guests as well as several justices of the U.S. Supreme Court.

Investors will be watching for any news on ongoing trade talks with China, as well as whether the president discusses drug pricing or plans for new infrastructure spending.

The address comes shortly after the conclusion of the longest partial government shutdown on record, which ended with a stopgap spending measure and no resolution of the president’s demands for billions of dollars in funding for his proposed border wall.

The Democratic response to the president’s address will be delivered by Stacey Abrams. Abrams lost her bid to become the first black female governor of Georgia last year and is being floated as a possible contender for the state’s U.S. Senate seat held by David Perdue, a Republican.

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SoftBank Vision Fund invests $110 million in Energy Vault



Masayoshi Son, CEO of SoftBank.

Adam Jeffery | CNBC

SoftBank’s Vision Fund announced its first investment in an energy company on Thursday, marking a shift for the $100 billion fund that has made its name pouring money into big tech companies like Uber, WeWork and Slack.

The Vision Fund said it completed a $110 million investment in Swiss start-up Energy Vault, which creates renewable energy storage products. Energy Vault’s system uses recycled concrete blocks built into a tower that can store and release energy.

“Energy Vault solves a long-standing and complex problem of how to store renewable energy at scale,” Akshay Naheta, managing partner for SoftBank Investment Advisers said in a press release.

SoftBank’s Vision Fund, which launched in 2017, has disrupted the venture capital model by injecting billions of dollars into start-ups, driving up their valuations. The Fund said last week its operating profit had jumped 66% year-on-year in the last quarter, thanks to valuation increases companies like food delivery platform Doordash and Indian hotel-booking firm Oyo. It said its $66.3 billion investment in 81 tech firms is now worth $82.billion.

The Vision Fund’s portfolio has so far been weighted heavily toward tech companies focused on transportation and logistics like Uber and its Southeast Asian rival Grab, as well as enterprise firms like Slack and “frontier tech” names like British chip designer Arm. In July, SoftBank launched a $108 billion-Vision Fund 2 that will target companies developing artificial intelligence.

Energy Vault CEO and co-founder Robert Piconi said Thursday the company is “thrilled to partner with SoftBank Vision Fund as we expand our global presence.”

Energy Vault did not disclose its valuation as part of the latest investment. The firm said it would use the $110 million to “accelerate global deployment” of its storage technology. Andreas Hansson, partner for SoftBank Investment Advisers, will join Energy Vault’s board of directors as part of the investment.

– CNBC’s Ryan Browne contributed reporting

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Bonds, US-China trade, currencies in focus



Shares in Asia were set to trade lower at the open on Thursday after the main yield curve in U.S. Treasurys inverted overnight, triggering fears over the state of the U.S. economy.

Futures pointed to a sharply lower open for Japanese stocks. The Nikkei futures contract in Chicago and Osaka were both at 20,100, as compared to the Nikkei 225’s last close at 20,655.13.

Stocks in Australia were also poised to see an opening drop, with the SPI futures contract at 6,400.0, as compared to the S&P/ASX 200’s last close at 6,595.90.

Investors will be watching the bond market today, after the yield on the benchmark 10-year Treasury note briefly broke below the 2-year rate overnight, an odd bond market phenomenon that has historically been a reliable indicator of economic recessions. The yield on the 30-year Treasury bond was also sent to a new record low on Wednesday.

The yield on the 10-year Treasury note was last at 1.5826%, as compared to the 2-year rate at 1.5812%.

Banks in Asia will also be in focus today, with financials seeing a rout overnight stateside amid the market turmoil on Wall Street.

Markets in South Korea and India are closed on Thursday for holidays.

Asia-Pacific Market Indexes Chart

Overnight stateside, the Dow Jones Industrial Average plunged 800.49 points to close at 25,479.42 — its worst percentage drop of the year and fourth-largest point drop of all time. The S&P 500 fell 2.93% to finish its trading day at 2,840.6, while the Nasdaq Composite closed 3.02% lower at 7,773.94.

The moves came amid rising fears over the global economy, with China reporting weaker than expected industrial output for July and Germany posting a negative gross domestic print for the second quarter.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 97.987 after surging from levels below 97.8 yesterday.

The Japanese yen, widely viewed as a safe-haven currency, traded at 105.83 against the dollar after strengthening sharply from levels above 106.5 in the previous session. The Australian dollar changed hands at $0.6749 after dropping from levels above $0.676 yesterday.

Here’s a look at some of the data due today:

  • Australia: Employment data for July at 9:30 a.m. HK/SIN
  • China: Residential building sales for July at 9:30 a.m. HK/SIN
  • Hong Kong earnings: Ping An Group, Vanke

— CNBC’s Yun Li contributed to this report.

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Trump suggests ‘personal meeting’ with China’s President Xi over Hong Kong crisis



Chinese President Xi Jinping shakes hands with U.S. President Donald Trump as he is accompanied by China’s first lady Peng Liyuan during a dinner at the start of a summit between President Trump and President Xi at Trump’s Mar-a-Lago estate in West Palm Beach, Florida, April 6, 2017.

Carlos Barria | Reuters

President Donald Trump in a tweet Wednesday suggested a “personal meeting” with China’s President Xi over the ongoing Hong Kong crisis, as investors remained on edge about the trade tensions between the U.S. and China.

“I know President Xi of China very well,” Trump tweeted. “He is a great leader who very much has the respect of his people. He is also a good man in a ‘tough business.’ I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it. Personal meeting?”

Hundreds of thousands of people in Hong Kong have taken to the streets since early June, spurred by opposition to a bill that would allow people in Hong Kong to be extradited to mainland China. That proposal has been suspended — though not fully withdrawn.

Demonstrations have since evolved into a movement calling for autonomy, full democracy and the ousting of the embattled leader Carrie Lam.

Beijing has responded saying Hong Kong is facing its worst crisis since the handover from the United Kingdom in 1997, and the communist government has used increasingly pointed language to describe the protests.

Trump also warned in another tweet that if China wants to make a trade deal, they should respond “humanely” to Hong Kong.

“Good things were stated on the call with China the other day. They are eating the Tariffs with the devaluation of their currency and “pouring” money into their system. The American consumer is fine with or without the September date, but much good will come from the short deferral to December. It actually helps China more than us, but will be reciprocated. Millions of jobs are being lost in China to other non-Tariffed countries. Thousands of companies are leaving. Of course China wants to make a deal. Let them work humanely with Hong Kong first!”

This week, Trump decided to delay tariffs on certain Chinese goods while outright removing some items from the tariff list, a move to avoid any negative impact on the holiday shopping season. The announcement sent the Dow rallying more than 300 points on Tuesday. Those gains were lost in the big sell-off Wednesday.

The deferral “helps China more than us, but will be reciprocated,” Trump said Wednesday.

— CNBC’s Grace Shao and Yun Li contributed to this report.

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