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President Donald Trump speaks on the possibility of a government shutdown during the signing ceremony for the First Step Act and the Juvenile Justice Reform Act in the Oval Office of the White House December 21, 2018 in Washington, DC.

Win McNamee | Getty Images

President Donald Trump speaks on the possibility of a government shutdown during the signing ceremony for the First Step Act and the Juvenile Justice Reform Act in the Oval Office of the White House December 21, 2018 in Washington, DC.

President Donald Trump told reporters on Wednesday that there was a “glitch” in the stock market last month, but that equities should recover as the U.S. completes trade deals with countries like China.

The S&P 500 dropped more than 9 percent last month to notch its worst December performance since 1931. Those losses also pushed the broad stock index to its worst annual performance since 2008 — when it plunged more than 38 percent. For 2018, the S&P 500 pulled back 6.2 percent.

Equities fell sharply in December as investors grappled with fear that the Federal Reserve might be making a monetary policy mistake, worries of a possible economic slowdown and ongoing trade negotiations between China and the United States.

China and the U.S. agreed to a 90-day grace period on Dec. 1 to try and strike a permanent trade agreement. Both countries have slapped tariffs on billions of dollars worth of their goods.

This is a developing story. Check back for updates.

Watch: Stocks open the new year on a down note — Here’s what three experts say investors should watch out for

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How much does a ride cost?

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Lilium says its five-seater jets can travel up to 300 kilometers in one hour.

Lilium

Flying cars have for years been limited to the world of fiction. Now there are plenty of companies hoping to make the sci-fi dream a reality.

One such firm is Lilium, a Munich-based start-up with big ambitions for the future of transportation: a five-seater electric air taxi, due to launch commercial flights in 2025.

The main goal Lilium is hoping to achieve, according to Chief Commercial Officer Remo Gerber, is making such a service an affordable one that people can use just like they would a ride-hailing app like Uber.

Around the time Lilium was established, its founders realized they didn’t want to make a “luxury product” or “something we sell to rich individuals,” but a “service that’s affordable,” Gerber told CNBC in an interview.

To get a better idea of just how much that would cost, the executive used the example of taking New Yorkers from Manhattan to JFK Airport within six minutes for about $70.

For reference, Uber plans to take passengers in its helicopter ride-sharing service from Manhattan to JFK for a roughly $200 flight that takes around eight minutes.

Lilium says its aircraft, which takes off and lands vertically, can travel 300 kilometers in an hour after a single charge. In the U.K. that means it would be able to take someone from London to Manchester — in other words, from the South to the North of England – in one journey.

In terms of general pricing, Gerber explained that a typical short-distance ride would cost about the same as a trip with a ride-hailing firm like Uber or Lyft. Long-distance flights would cost the equivalent of traveling economy class in an airplane, he added.

With a route like London to Manchester in the U.K., Gerber said, customers would have to fork out a similar amount to what they would pay for a train ticket. According to travel metasearch engine Gopili, an average train ticket on that route costs £60 ($76).

The German start-up’s five-seater jet took to the skies for the first time last month, a key milestone for the company. Prior to that, Lilium had tested a two-seater variant in 2017.

Lilium was founded in 2015 by three friends from the Technical University of Munich. To date, it’s raised about $100 million from investors including China’s Tencent and the London-based venture capital firm Atomico.

Six years from now, Lilium will be available in “a number of cities around the world,” Gerber said.

And while Lilium’s aircraft is controlled by a pilot, the firm says it’s putting together a team of experts focused on unmanned jets. According to Morgan Stanley, the market for autonomous flying cars could be worth $1.5 trillion by 2040.

Other than Uber, Lilium faces stiff competition from major aerospace players Boeing and Airbus, as well as the German start-up Volocopter, which is also working on a vertical take-off and landing air taxi.

Watch: Uber unveiled its flying taxi prototype, which looks like a giant drone

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Extradition law may jeopardize US-Hong Kong economic arrangement

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Protesters occupy a main road and walkways during a rally against a proposed extradition law in Hong Kong, China, on June 12, 2019.

Paul Yeung | Bloomberg | Getty Images

Protests against a proposed change to Hong Kong’s extradition policy continued on Thursday as several thousand protesters demonstrated in the streets — undeterred by the tear gas and rubber bullets police fired at them a day earlier.

The mass political demonstration has already had an impact on business in the city.

Local government offices in the city’s financial district have shut down for the rest of the week after several days of protest.

For their part, major international banks including Standard Chartered, Bank of China and DBS said they had suspended branch services in the city’s central business district area until further notice. For many financial firms based in the Central district, it was business as usual — but many offered staff the option of working from home.

Meanwhile, Hong Kong’s equity benchmark, the Heng Seng Index, slid 1.5% in early trade on Thursday, extending losses from Wednesday afternoon as tensions escalated.

Beyond just the effects of this week, the mass political demonstration has raised long-term concerns about the future of doing business in the territory.

Concerns for the local business community

The Hong Kong General Chamber of Commerce released a statement in March indicating its distress about the city government’s proposal to allow extradition to several places — including mainland China — where it does not currently have obligations to send those accused of crimes.

While such a system may not sound like a problem for companies, many have expressed concern that it will undermine Hong Kong’s rule of law, and subject those doing business in the city to Beijing’s whims.

Those “new arrangements,” according to the chamber, “will reduce the appeal of Hong Kong to international companies considering Hong Kong as a base for regional operations.”

Such an overt opposition surprised some because the American Chamber of Commerce, and the local business community more generally, tends to avoid direct statements criticizing mainland China and Hong Kong’s relationship.

When asked for comment on the latest developments in the city, the Chamber of Commerce said Thursday it has nothing to add beyond its March statement.

Joseph Cheng, co-founder of Power for Democracy, a pro-democracy political group based in Hong Kong, said the chamber of commerce adopting “a public position against the Chinese authorities” is not only “rare,” but also very “significant” for the local business community.

That sentiment was echoed by Ho-Fung Hung, a professor in political economy at Johns Hopkins University. Speaking with CNBC’s “Street Signs” on Thursday, he said an amendment to the extradition policy could jeopardize not only the territory’s reputation as a financial center but also its special economic status with Washington.

“What is practically worrying me is that Hong Kong always enjoyed a special trading status according to U.S. law, which is the U.S.- Hong Kong Policy Act, that separates Hong Kong from mainland China in many economic and diplomatic issues,” he said.

For one, U.S. Speaker of the House Nancy Pelosi suggested that Hong Kong may, if the extradition changes are made official, no longer be “sufficiently autonomous” to justify a special trade arrangement between the territory and the United States.

What makes Hong Kong companies different from Chinese companies, he added, is that they have more access to U.S. and other countries’ markets due to the special agreement.

International responses to the protests

The demonstration has attracted international attention.The European Union said in a statement that it shared many of the concerns raised by citizens of Hong Kong regarding the proposed extradition reforms and called for an in-depth inclusive public consultation to move forward.

“This is a sensitive issue, with potentially far-reaching consequences for Hong Kong and its people, for EU and foreign citizens, as well as for business confidence in Hong Kong,” it said.

Protesters cheer and make way for other demonstrators pushing a ladder cart outside the Legislative Council during a protest against a proposed extradition law in Hong Kong, China, on June 12, 2019.

Bloomberg | Getty Images

Meanwhile the United States Consul General in Hong Kong, Kurt Tong, described worries in the foreign community, including businesses, as “palpable” in an interview shown in May on public service broadcaster RTHK.

“We sense real concern about this, “ Tong said, adding that unease is compounded by a lack of “careful explanation.”

But Bruce Lui, senior lecturer at Hong Kong Baptist University said that the local government and Chinese government wont budge on this and the bill will be “definitely be passed in weeks.”

“The Beijing policy in Hong Kong is trying to weaponize law as a means to have total control in Hong Kong,” Lui told CNBC, adding that the proposed extradition changes are fundamentally a “test of the authority” of Chinese leader Xi Jinping.

– Kelly Olsen and Reuters contributed to this report.

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Oil jumps on reports of tanker incident in Gulf of Oman off Iran coast

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This satellite image shows the Strait of Hormuz, between the Persian Gulf and the Gulf of Oman. The Strait of Hormuz runs between Iran and United Arab Emirates.

StockTrek | Photodisc | Getty Images

Brent crude spiked 3% on Thursday morning on reports of tanker explosions in the Gulf of Oman.

United Kingdom Maritime Trade Operations, a division of the U.K. Royal Navy, said it is currently investigating what it has called an “incident” in the Gulf near the Iranian coastline. It has urged “extreme caution” amid mounting tensions between Iran and the U.S.  

Iranian state media has reported that two oil tankers were targeted in explosions, without providing evidence.

A spokesman for the US Navy’s 5th Fleet in Bahrain told the Associated Press that his command was “aware” of the incident and was seeking further details.

Brent crude is currently trading at $61.77 a barrel.

This is a breaking news story, please check back for more.

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