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White House trade advisor Peter Navarro said media reports on the U.S.-China trade talks are not reliable, even calling stories in the Wall Street Journal “garbage.”

“My advice for investors is to be patient with the process and don’t believe anything you read in either the Chinese or the U.S. press about these negotiations unless it comes from the mouth of either the president or advisor Lighthizer,” Navarro said on CNBC’s “Squawk Box” on Friday.

“There’s just going to be a lot of garbage coming out of the Wall Street Journal and the People’s Daily and everything in between,” Navarro said. “I’ve seen this movie before… There were all sorts of stories written and they were designed to shape the negotiations and they didn’t have any insight into them,” Navarro said.

Navarro didn’t discuss any specific stories or present any evidence to back up his point. The Wall Street Journal reported on Monday that certain issues were weighing on new trade talks, including China not stepping up purchases of American agricultural products. Trump himself later confirmed that lack of the purchases were a hang up.

“We stand by our reporting,” Colleen Schwartz, a spokeswoman at The Wall Street Journal told CNBC in response to Navarro’s comment.

The People’s Daily is the official newspaper of the Communist Party in China.

As far as those trade talks, Navarro said that the trade battle was “in a quiet period,” adding that U.S. Trade Representative Robert Lighthizer will travel to Beijing with Treasury Secretary Steven Mnuchin in the near future.

President Donald Trump and Chinese leader Xi Jinping agreed to a truce at the G-20 meeting last month in Japan after both countries slapped tariffs on billions of dollars of each other’s goods. China said last week the U.S. has to lift all the existing tariffs placed on Chinese goods if there is to be a trade deal, while Trump said those tariffs will not be reduced.

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BHP earnings full year 2019



BHP Group posted its largest annual profit in five years and record full-year dividends, but its share price eased as the world’s biggest miner flagged global economic headwinds that could hit demand for its key commodities, iron ore and copper.

Both profit and dividends slightly undershot expectations as BHP kept cash in its coffers in the face of risks to global economic growth such as the Sino-U.S. trade war and as costs rise at some of its operations.

BHP shares edged down 0.4 cents to A$36.10 ($24.43) on Tuesday, while the broader Australian market was up slightly.

“As a BHP shareholder you can’t be too disappointed. It’s been a great year for the company, they have made a lot of money,” said Brenton Saunders of Pendal Group in Sydney, a fund management firm that holds shares in the miner.

“That’s in a large part a function of commodity markets and less so a function of the specifics of managing and running a business like this.”

BHP on Tuesday announced a 78 cent dividend, meaning that it will hand back $3.9 billion to investors in addition to $17 billion already announced for the financial year that ended in June.

That stemmed from the sale of its shale gas business and was helped by surging iron ore prices following supply outages in Brazil and Australia.

“Most people were thinking around this level on dividends, but a lack of any additional returns may disappoint some,” said analyst Glyn Lawcock at UBS in Sydney.

While the trade dispute between Washington and Beijing has dampened global economic growth, it has not yet affected Chinese demand for BHP’s commodities such as iron ore, copper and coal, said Chief Executive Andrew Mackenzie.

“There’s obviously been a slight cooling in appetite based on some of the concerns we have seen in the short-term for the global economy. We are not without some consideration as to what might be around the corner,” he said, in reference to BHP’s lack of special dividend.

Reports of stimulus efforts in China and Germany calmed fears of a severe downturn in the global economy on Tuesday that were stoked last week as bond yields fell.

Photographer | Collection | Getty Images

Tougher outlook

Mackenzie is six years into the top job at BHP and is expected to step down in the next year, leaving the next management team with a number of challenges. 

He said he did not expect Chinese steel demand to grow next year given already robust infrastructure spending and softening economic signals from developed economies.

He also cited rising cost pressures, which were seen in petroleum as well as BHP’s Queensland coal division where costs rose by 2% over the financial year partly due to wet weather.

“We believe capital returns from BHP have peaked for this cycle due to rising costs, gradually rising capex, lower realized prices, and a lack of proceeds from asset sales,” said Jefferies, which recently downgraded BHP to hold, in a report.

Iron ore prices have tumbled this month as global supply has normalized, after outages and strong Chinese appetite for the steelmaking raw material caused the Dalian iron benchmark to more than double in the first-half of 2019.

Mackenzie also said that BHP had its thermal coal operations under review. There has been some speculation in markets that the company could look to sell these operations.

Underlying profit for the 12 months ended June 30 rose to $9.12 billion from $8.93 billion a year earlier, but still undershot expectations of $9.4 billion from a Vuma consensus of 18 analysts.

Underlying profit is a measure of the company’s core performance excluding one-time gains and losses.

But the company recorded $1 billion in productivity losses for fiscal 2019 on disruptions to production at its copper and iron ore operations.

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Italy’s return to political chaos leaves investors in wait-and-see mode



Italian Vice Premiers Luigi Di Maio and Matteo Salvini with Prime Minister Giuseppe Conte on January 24, 2019.

Simona Granati | Corbis News | Getty Images

A furious global hunt for yield has helped to spark a significant repricing of fixed-income markets.

The consequences of last week’s major market moves were by turns high-profile and obscure; one oxymoron-inclined senior White House advisor to President Donald Trump insisted the inverted curve that appeared briefly in U.S. Treasury yields was in fact “flat,” while the Austrian 100-year bond continued to trade at more than twice its face value.

But only the most charitable investor would argue there were many fundamental factors behind the downward march of potential borrowing costs for Italy’s troubled government.

Last March, a national election yielded no outright political winner in Rome, but sizeable and unprecedented vote shares for anti-immigrant and anti-establishment parties immediately prompted hand-wringing among investors in the world’s eighth largest economy.

Those two political groupings, known as Lega and the Five Star Movement (M5S), eventually struck a deal to form an unlikely coalition government. But their combined campaign promises of higher spending and lower taxes frightened both the market and the European Commission, which has closely monitored the Italian economy and its expensively-serviced debt pile since the euro zone crisis.

This fear has continued to mean that “I Buoni del Tesoro Poliennali” — the Italian name for multi-year government bonds, typically shortened to BTPs — have frequently ended up as the whipping boys of Europe’s sovereign credit markets.

And as the coalition crumbles further this week, potentially transitioning from confrontational inaction to outright collapse with a no-confidence vote in parliament widely mooted, Italian politics enters its latest crisis chapter thanks to these unnatural bedfellows.

Originally a separatist movement that sought to build a new nationalist and pro-business economy from the rump of Italy’s northern industrial heartland, Lega only recently switched from criticizing southern Italians to demonizing immigrants.

Meanwhile, M5S won many of its early adherents during the financial crisis and for years has railed against government austerity and low unemployment, winning much of its support in the impoverished south.

What both shared was a skepticism of the European Union and its institutions, which had worked in concert with previous technocrat-led governments in Rome to try to reform Italy’s creaking fiscal architecture and retool inefficient aspects of the frequently stagnating economy.

Several of the ambitious objectives the two coalition partners agreed to in their government contract had placed them on collision course with Brussels, where the European Commission was focused on reducing Rome’s overall debt pile and tamping down its annual deficit.

But the failure to implement many of those targets, and the fact that the country’s economy did not respond positively to the admittedly circumscribed stimulus efforts, has helped to heighten intra-government rancour.

And after poll numbers continued to shift in favor of Lega and its leader Matteo Salvini, he announced earlier this month that the coalition was no longer functional. In response, M5S’s leadership said he was untrustworthy.

And now investors must once more wait to see if a fragmented parliament and the Italian President Sergio Mattarella can find an exit strategy that will, at the very least, provide some certainty about the country’s immediate future.

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Carrie Lam speaks about economic impact, Shenzhen



Protesters walk along a street during a rally in Hong Kong on August 18, 2019, in the latest opposition to a planned extradition law that has since morphed into a wider call for democratic rights.

Manan Vatsayayana | AFP | Getty Images

Hong Kong leader Carrie Lam on Tuesday painted a bleak picture of the city’s economy amid weeks of protests, but expressed hope that dialogue with peaceful demonstrators could provide “a way out” for the Asian financial hub.

Lam, the territory’s Beijing-backed chief executive, said she was willing to talk to peaceful protesters to narrow current differences.

“We will immediately start the work to establish a platform for dialogue,” she said Tuesday, during her weekly press conference on the ongoing protests. “This dialogue, I hope, will be based on mutual understanding and respect and find a way out for today’s Hong Kong.”

Hong Kong, a former British colony that was returned to China in 1997, has been plagued by weeks of unrest as hundreds of thousands took to the streets in protest against a now-suspended extradition bill which would have allowed suspects in Hong Kong to be sent to mainland China for trial.

The frequently violent rallies have since spilled over into issues of democracy amid rising concerns that civil rights and freedoms under Beijing were being eroded.

Lam reiterated on Tuesday that the extradition bill was “dead,” and there were no plans to revive it.

Impact on Hong Kong economy

On Tuesday, Lam also emphasized that Hong Kong’s economy will be impacted from the months-long protests and said the situation may be worse than what numbers have shown so far.

“The Hong Kong economy is facing the risk of downturn,” Lam said. “We can see this from the data in the first half. Actually, I think the data in the first half has not fully reflected the seriousness of the problem.”

Hong Kong’s government last week lowered its 2019 GDP growth forecast to between 0% and 1%, from the original range of 2% to 3%.

Various sectors have reportedly been affected, and markets are said to be hit hard as demonstrations turn increasingly violent. Most notably, the airline, retail, and real estate sectors have seen their sales decline. Hong Kong’s International Airport, one of the world’s busiest, cancelled flights earlier this month and cited disruptions by anti-government protesters. The city’s public transit system has also been disrupted on multiple occasions.

Lam also said that Shenzhen’s development will be good for the city, especially in terms of technology innovation, while stressing that Hong Kong still has unique advantages in attracting international companies.

Her comments come as China’s state council called for greater development of Shenzhen, a Chinese city which borders Hong Kong and is turning into a major hub for China’s manufacturing and technology sectors.

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

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