An earlier version of this article misstated the times for the release of reports on the Chicago and Dallas manufacturing sectors.

iStockPhoto

Markets participants have been processing a lot of info lately

U.S. stocks moved higher during the final trading session of the month and quarter after a Treasury official said there were no immediate plans to prevent Chinese companies from listing on domestic exchanges, momentarily calming a fear that buckled equities on Friday.

Market participants, however, were also keeping an eye on developments surrounding a House impeachment inquiry against President Donald Trump.

What are major indexes doing?

The Dow Jones Industrial Average

DJIA, +0.50%

 rose 99 points, or 0.4%, to 26,919, while the S&P 500 index

SPX, +0.53%

advanced 13 points, or 0.4%, to 2,975. The Nasdaq Composite index

COMP, +0.50%

gained 31 points to reach 7,970, a gain of 0.4%.

On Friday, the Dow lost 70.87 points or 0.3%, to finish at 26,820.25, while the S&P 500 index  lost 15.83 points, or 0.5%, to close at 2,961.79. The Nasdaq Composite Index gave up 91.03 points, or 1.1%, ending at 7,939.63.

For the month of September, the Dow is on pace to rise 2%, the S&P 1.6% and the Nasdaq is set to add 0.1%.

What’s driving the market?

Bloomberg News, citing Treasury spokeswoman Monica Crowley, reported that the Trump administration isn’t contemplating blocking Chinese companies from “listing shares on U.S. stock exchanges at this time.”

The Treasury officials comments come after Bloomberg reported on Friday that the White House has been discussing ways to curb U.S. portfolio inflows into China, a crackdown that could hit billions worth of investments and escalate the Sino-American trade war.

“On Saturday, the Treasury Department stated it’s not considering blocking Chinese companies from listing on U.S. exchanges ‘at this time,’ refuting the Bloomberg story from Friday, which caused the declines in stocks,” wrote Tom Essaye, president of the Sevens Report, in a note to clients. “So, given Treasury’s denial, we’re seeing those declines partially reversed.”

The reports come as Chinese negotiators are set to meet Oct. 10-11 in Washington, with Chinese Vice Premier Liu He to lead the delegation from Beijing.

Tensions between the U.S. and China on trade have been rattling global markets for the past year, because the conflict between the world’s largest economies has the potential to hurt economies around the world.

Investors are also watching the fallout from a whistleblower report released on Thursday, which alleged that Trump attempted to coerce Ukraine to produce damaging information on Democratic rival Joe Biden and his son, and that White House officials acted to conceal evidence of his actions. The controversy around the report prompted House Democrats to launch a formal impeachment inquiry.

The whistleblower is expected to testify in front of the House “very soon,” though in a way that will protect the person’s identity, according to Rep. Adam Schiff of California, the chairman of the House Intelligence Committee.

On Sunday, Trump called for Schiff “to be questioned at the highest level for fraud and treason,” arguing that Schiff misrepresented the contents of the whistleblower complaint during a hearing last week.

On the data front, The Chicago PMI, an index based on a survey of businesses in the Chicago region, fell to 47.1 in September, down from 50.4, below the consensus range of between 47.2 and 52, according to Econoday. An index measuring the health of the Texas manufacturing sector came in at 13.9, down from 17.9 in August.

Which stocks are in focus?

Blackstone Group Inc.

BX, -3.07%

 affiliate Blackstone Real Estate Partners IX said Monday it would buy Colony Industrial, the real-estate assets and industrial operating platform of Colony Capital, for $5.9 billion, including debt.

Tesla Inc.

TSLA, -1.14%

 shares could be in focus after a judge ruled late Friday that the electric-car manufacturer engaged in unfair labor practices in discouraging its employees from forming a union.

Shares of Xcel Energy Inc.

XEL, -0.12%

 fell after the firm announced that regulators denied a subsidiary’s request to purchase Mankato Energy Center.

How are other markets trading?

The yield on the 10-year U.S. Treasury note

TMUBMUSD10Y, +0.41%

 rose about 1 basis point to 1.687%.

In commodities markets, West Texas Intermediate crude oil for November delivery

CLX19, -1.31%

 fell 61 cents to $55.30 a barrel on the New York Mercantile Exchange.

Gold for December delivery

GCZ19, -1.96%

 fell $15.70 to about $1,491 an ounce, falling well below a psychologically significant level at $1,500 an ounce.

In Asia, the China CSI 300

000300, -0.99%

 lost 1%, Japan’s Nikkei 225

NIK, -0.56%

 retreated 0.6% but Hong Kong’s Hang Seng Index

HSI, +0.53%

 gained 0.5%. European stocks were mostly higher, as measured by the Stoxx Europe 600

SXXP, +0.29%.

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Here’s another reason to get into the habit of looking on the bright side.

People who consider themselves optimists may be more than a third less likely to suffer from a heart attack or stroke, according to a new study published in the JAMA Network Open medical journal.

Researchers conducted a meta-analysis of data from 230,000 men and women in the U.S., Europe, Israel and Australia over 14 years. And the subjects who described themselves as optimistic experienced 35% fewer major heart complications, such as stroke, heart attack and cardiac death, than those who didn’t. What’s more, these optimists were 14% less likely to have a premature death by any cause, including cardiovascular disease, cancer, dementia and diabetes.

Professor Alan Rozanski, a corresponding author of the study and a cardiologist at the Icahn School of Medicine at Mount Sinai in New York, suggested that people with a more positive outlook may also be more inclined to live a heart-healthy lifestyle that includes regular exercise, eating a balanced diet and not smoking. “Optimism has long been promulgated as a positive attribute for living,” he wrote.

And it’s a good thing that optimists are so hopeful about the future — it appears they have a lot more of it.

People with greater optimism are more likely to achieve “exceptional longevity” and live to age 85 or older, according to a recent study from the Boston University School of Medicine.

Researchers surveyed 69,744 women and 1,429 men drawn from two longitudinal health studies to measure their levels of optimism, as well as their overall health and their lifestyle habits (such as diet, smoking and alcohol use.) And those with the most positive outlooks had 50% to 70% greater odds of reaching 85 years old, compared with the more negative groups. The biggest optimists also lived 11% to 15% longer. And these findings were consistent after accounting for demographic factors such as age, education, chronic diseases and depression, as well as lifestyle habits like exercise, diet and alcohol use.

This study didn’t detail exactly how optimism boosts longevity, although previous research suggests that looking on the bright side makes people happier, healthier and wealthier, which factors into a long, fulfilling life.

A recent study in Behavioral Medicine, for example, found that optimists tend to sleep better; they were 74% less likely to have insomnia, and were also more likely to get a solid six to nine hours of shut-eye a night. And better sleep is linked to better overall health and a reduced risk of obesity and cardiovascular disease — which translates into a smaller chance of dying from heart disease or stroke. Being upbeat has also been linked to having a healthier heart, as many optimists eat better, exercise more and have strong social support networks.

What’s more, one 2015 study found that optimists earn more money than cynics (approximately $3,000 over nine years), while another report suggested that people who wear rose-tinted glasses are promoted more, in part because they work so well with others.

Optimists are also more likely than pessimists to make smart money moves, according to a survey released by Frost Bank earlier this year. Believe it or not, those looking on the bright side were more prepared for the worst, as 61% of optimists had started an emergency fund compared with less than half (43%) of pessimists. Optimists were also far more likely to save money for a major purchase, and they were more creative in finding ways to save money.

Related: Rich people approach problems like this — and it helps explain why they’re wealthy

Unfortunately, optimism among Americans 35 and younger dropped below that of their parents’ generation for the first time last year — largely due to economic pressures like sky-high student loan and credit card debt.

Are you also struggling to be positive? Read this piece to see some tips to becoming an optimist, such as practicing gratitude and repeating empowering affirmations.

This article was previously published in August 2019, and has been updated with the new JAMA Network Open study.

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Next year’s presidential election could be bruising for the politically polarized nation.

Worker turnover because of “toxic” office cultures has already cost companies $223 billion in the past five years, up 24% from 2008 to 2012, according to findings released Wednesday from the Society for Human Resource Management (SHRM).

Those turnover costs could climb higher in today’s politically charged environment, the research adds. Toxic work culture flourishes when companies don’t address worker disagreements, SHRM says. And politics can surely spawn disagreement.

President Donald Trump pressed Ukraine’s leader to “look into” Democratic rival Joe Biden and other gripes the president had relating to the 2016 presidential election, according to a transcript of a phone call made to the Ukrainian President Volodymyr Zelensky.

‘The division we already have in the workplace now has been multiplied.’


—Society for Human Resource Management President and CEO Johnny Taylor Jr.

This week, House Speaker Nancy Pelosi launched an official impeachment inquiry into the president.

“The division we already have in the workplace now has been multiplied,” SHRM President and CEO Johnny Taylor Jr. said Wednesday, speaking a day after House Speaker Nancy Pelosi announced an impeachment inquiry into President Donald Trump.

Mounting political polarization is forcing HR managers to venture into new territory and affecting employees’ ability to do their jobs.

“We have to manage that [political division] at work, and in the past, HR would never do that. We’d just say ‘don’t talk about that at work.’ They’re talking about it. Who isn’t talking about it? We’ve got to figure that out,” Taylor told MarketWatch. He says managers should bring workers together and let them discuss the issues, but with clear rules about being respectful and civil.

A survey last year from the staffing company Robert Half International

RHI, +2.00%

  found 22% of workers got into a “heated discussion with a co-worker” during the last presidential election. Another 15% said their productivity slipped because of the water cooler political talk.

There have been three times the number of calls related to politics this year compared to last on one HR hot line.

More human resource professionals are grappling with how to handle workers who talk politics on the job. It may be a politically fraught time, but it’s also an extremely tight job market where many companies are working hard to ensure workers don’t leave for another position.

The SHRM hot line already received 916 queries this year on how to handle politics in the workplace, up 195% on 310 politics-related calls the previous year, said Alexander Alonso, the professional association’s chief knowledge officer. The hot line receives 600,000 calls every year.

In fact, calls on politics are coming in at a much higher rate than questions about sexual harassment, even as the #MeToo movement gains steam. In fact, calls on politics are coming in at a much higher rate than questions about sexual harassment, even as the #MeToo movement gains steam. The hot line receives around 24,000 calls (4% of all calls) on the matter, a 150% increase on 2016, he said.

Don’t miss: In the #MeToo era, 60% of male managers say they’re scared of being alone with women at work

“It’s like nothing we’ve seen,” Taylor said of the sharp uptick in calls over politics. “The level of toxicity in the environment is at an all-time high,” he added.

Federal and state laws let workers discuss job conditions, practices and pay while they’re at work. Yet there are very few laws protecting employees from being punished for talking about politics, especially private sector workers, according to Workplace Fairness, an employee advocacy organization.

See also: Think twice before talking about Trump at work—it could hurt your chances of promotion

Broader political disagreements can sometimes bleed into workplace complaints. For example, the National Labor Relations Board recently settled a case with Google, saying the company had to post notices about worker rights to talk about pay and safety conditions.

A former employee, Kevin Cernekee, filed the complaint. He alleged he was fired from Google

GOOG, -0.50%

 for his conservative-leaning comments on a company chat forum. The company previously said it terminated him for allegedly downloading secret company documents to a personal device.

The NLRB settlement does not discuss political activity, a spokesperson for Google

GOOGL, -0.53%

told MarketWatch. The tech giant’s employee guidelines state, “while sharing information and ideas with colleagues helps build community, disrupting the workday to have a raging debate over politics or the latest news story does not.”

More from MarketWatch

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The interior of an American Airlines 737.

Josh Noel | Chicago Tribune | MCT | Getty Images

Rising concern about commercial flying’s impact on the environment will act as a brake on passenger growth and reduce jet sales from the likes of Boeing and Airbus, according to a new report from UBS.

A survey of more than 6,000 people has revealed that a growing number of travelers in Europe and America have already reduced the number of flights they took over the last 12 months because of heightened environmental awareness.

Around one in four flyers in France, Germany and the U.S revealed to UBS that they had reduced flights. A smaller number of Brits (16%) admitted that climate change had forced them to forego at least one trip.

Chief author of the report’s findings and UBS’s Head of European Industrials Equity Research, Celine Fornaro, added in the note Monday that around 27% of respondents were now “thinking about it,” when asked if climate worries could affect travel plans.

That figure marked a rise from a similar survey taken by UBS in May which came out at 20%.

Slowing growth and sales

Moves are afoot from European governments to discourage flying. France is to soon introduce a 1.50 euro levy on domestic tickets, rising to 18 euros ($20) on long haul travel.

Germany is to double its taxes for flights originating from Germany from January next year and Switzerland is another country proposing a flight tax.

UBS’s model predicts that the upshot of personal concern allied to increased cost will reduce intra-European traffic growth over the next 20 years to 1.5% per year versus the 3% per year currently estimated by Airbus.

Airbus also predicts air traffic within the U.S. will grow 2.1 percent each year through to 2038 but UBS trims that to 1.3% as people look for alternatives to taking a plane.

China is tipped to soon be the world’s largest aviation market but while Chinese respondents were not asked, the Swiss bank’s researchers put forward the possibility that huge investment in train travel across China will slow the expected boom in flights.

Airbus’s most recent forecast says almost 11,000 new small jets will be needed to serve European and U.S. demand over the next two decades, but UBS believes that number should shrink by 7%.

The bank says that in Airbus’ case that could mean a reduction in revenue of almost 3 billion euros each year.

Future options

Around three-quarters of respondents said they would be happy to fly in an electric or hybrid plane but only one in four said they would feel comfortable in a smaller self-piloted aircraft as a means of travel.

A partially-electric regional plane is predicted by some in the industry to be around ten years away, but UBS believe battery technology may not develop to the point that can power larger craft.

The researchers consider alternative biofuels as the most realistic option for long haul flights and noted efforts by California and Oregon to set new rules on carbon fuel standards for the transport sector.

UBS noted however that while “alternative fuels” generate fewer emissions while being produced, once in the sky they emit similar levels of CO2 to traditional jet fuel.

Now watch: How do airlines price tickets?

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White House trade advisor Peter Navarro on Monday characterized recent reports that the U.S. is considering restrictions on Chinese companies as grossly inaccurate.

“That story, which appeared in Bloomberg: I’ve read it far more carefully than it was written,” Navarro told CNBC. “Over half of it was highly inaccurate or simply flat-out false.”

Multiple news outlets, including CNBC, on Friday reported that the White House is in the early stages of weighing restrictions on U.S. investments in China. Such measures could include a block of all American investment in the country, a person familiar with the talks told CNBC.

Bloomberg News first reported last week that President Donald Trump’s administration is considering limits to U.S. investors’ portfolio flows into China, including delisting Chinese companies from American stock exchanges.

“It was really irresponsible journalism and the problem we have here … these bad stories push out the good,” Navarro said Monday on “Squawk Box.” “And what happens is as soon as Bloomberg puts it out there, there’s pressure from others to put it out there.”

“This story was just so full of inaccuracies and in terms of the truth of the matter, what the Treasury said I think was accurate,” he said. Despite claiming that over half of the original Bloomberg story was inaccurate, Navarro refrained from disputing any specific claim within the report.

A Treasury spokeswoman over the weekend, however, said “the administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time.” A spokesperson for Bloomberg did not have comment immediately available on Monday.

Reports of White House discussion on restrictions to U.S.-China investments come as the administration looks for additional levers of influence in trade talks, which resume Oct. 10 in Washington.

Both countries have slapped tariffs on billions of dollars worth of each other’s goods over the last two years, with the U.S. imposing fresh taxes of 15% on Chinese goods starting Sept. 1. Those tariffs affect clothing, tools and electronics; a retaliatory round of Chinese tariffs on U.S. goods impacted soybeans, oil and pharmaceuticals.

Navarro, a known hawk among Trump’s trade counselors, said earlier this month that he was certain that Congress would ratify the administration’s landmark United States-Mexico-Canada Agreement before the end of 2019.

The importance of the accords within the USMCA, he argued at the time, guaranteed that House Speaker Nancy Pelosi would make the agreement’s approval a priority before the end of December. Since those comments, however, House Democrats have launched an impeachment inquiry into Trump over his conversation with Ukrainian President Volodymyr Zelensky.

The impeachment proceedings, Trump warned on Sept. 25, cast doubt on whether Pelosi will either be able to gather enough support to grant the president a political win or find enough time to take a vote.

“I don’t know if Nancy Pelosi’s going to have any time to sign it,” Trump said Wednesday, adding that he believes the House leader is wasting her time on a “manufactured crisis.”

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There are many benefits to being able to access almost anything from the touch of your phone. There is also a downside.

“This instant gratification in the financial world can be risky,” said Shelle Santana, a professor of business administration at Harvard Business School.

The reality is that more than 75% of all full-time workers are living paycheck to paycheck, according to a report from CareerBuilder.

While household income has grown over the past decade, it has failed to keep up with the increased cost of living over the same period.

From payday advances to layaway loans, there are new ways to access money to bridge the gap, easier and cheaper than ever before.

More from Invest in You:
Here’s how to invest like Warren Buffett
Tips from people who didn’t save till their 40s or 50s
You’ll probably regret that timeshare, car payment

But any incentive to loosen the purse strings is also a slippery slope, particularly as the pain from the last recession — now a decade behind us — subsides.

“The more that we are allowing consumers to have control over their finances and commit to healthy financial behaviors is a useful development,” Santana said.

However, “it could spur more spending than what consumers are capable of or what would be healthy for them to take on,” she added.

Payday advances

A growing number of companies, including Walmart, are giving advances by offering what’s now called “accelerated pay.” Through an app, workers have real-time access to earned wages ahead of payday. Like an ATM, there is a flat transaction fee but no interest charges.

To be sure, accelerated pay is not the same as a payday loan, which is generally considered the absolute worst way to borrow money in a pinch. Often offered through storefront payday lenders or even online, those short-term loans, generally for $500 or less, can come with an interest rate that easily runs into the triple digits — in addition to a “finance charge” or service fee.

As a perk, roughly 12% of companies include accelerated pay as another way of luring job candidates as wages remain relatively stagnant across the board, according to Michelle Armer, chief people officer at CareerBuilder, although that number is expected to grow.

Layaway loans

At the same time, installment payments are shaking up how consumers finance purchases — on everything from sneakers to skin care.

Increasingly, merchants are teaming up with start-ups such as Afterpay and QuadPay, which let shoppers break their payment into installments without interest or fees — as long as they don’t miss a payment. Unlike the old form of layaway, you receive your purchase after your initial payment rather than once you have paid in full.

John Brecher | NBC News

The idea is that shoppers, particularly millennials, will be drawn to the payment method, now called point-of-sale loans, and the retailers that provide it.

It’s similar to credit cards in that these companies charge the merchant, rather than the consumer, a processing fee. This phenomenon, however, is putting some pressure on purveyors of plastic, which have been reaping the benefits of a strong jobs market and low unemployment for years.

Credit cards

Meanwhile, the total number of credit cards in circulation continues to grow, which is up to more than 437 million, according to the most recent quarterly report by credit monitoring firm TransUnion.

That number peaked at just more than 496 million in the second quarter of 2008, and fell sharply during the global financial crisis by 24% to about 379 million in the third quarter of 2010, according to data from the Federal Reserve Bank of New York.

Since the Great Recession, the number of Americans relying on credit cards has only increased.

Because originations are a key driver of growth for the industry, card issuers have been upping the ante with better rewards and sign-up bonuses to attract new customers. As a result, credit card originations were up 5.56% year over year, according to TransUnion’s latest data.

In addition to the rising number of card accounts, credit card balances are also steadily creeping higher among all risk tiers.

Outstanding balances reached a record $795.5 billion as the average debt per borrower grew to $5,645 in the second quarter of 2019, up 2% from last year, according to TransUnion.

Together, U.S. consumers added $35.6 billion in new credit card debt during the second quarter of 2019 — a near record, according to a separate study by personal finance site WalletHub.

“Our over-leveraging problem has been trending in the wrong direction for some time now, and the latest data indicate we’re truly entering dangerous territory,” said WalletHub CEO Odysseas Papadimitriou.

Subscribe to CNBC on YouTube.

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A private gauge of China’s factory activity showed an expansion for the second straight month in September, thanks to higher production and new orders from home, contrasting with official data indicating a contraction for the fifth consecutive month.

The Caixin China manufacturing purchasing managers index rose to 51.4 in September from 50.4 in August, Caixin Media Co. and research firm Markit said Monday. The reading stayed above the 50 mark that separates expansion in activity from contraction.

While total new orders grew at a faster rate in September, new export orders reported a further reduction as the protracted China-U.S. trade dispute continued to damp foreign sales, Caixin said.

“The recovery in China’s manufacturing industry in September benefited mainly from the potential growth of domestic demand,” Zhengsheng Zhong, director of macroeconomic analysis at CEBM Group said.

Faster construction of infrastructure projects, better implementation of upgrading the industrial sector, and tax and fee cuts are likely to offset the effects of subdued overseas demand and soften the downward pressure on China’s economic growth, said Mr. Zhong.

He also said trade conflicts have a marked impact on China’s exports, production costs and business confidence.

China’s official manufacturing PMI, a competing gauge, released earlier Monday, edged up to 49.8 in September from 49.5 in August, thanks to recoveries in production and total new orders.

The Caixin PMI more closely tracks small, private manufacturers, while the official index focuses more on large, state-owned firms. The official PMI has a larger sample base, surveying 3,000 manufacturers nationwide, while Caixin polls 500 companies.

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Shares were mixed in a narrow range in Asia on Monday, with markets in China heading into a national holiday.

Chinese manufacturing data was slightly better than analysts’ estimates, helping to boost sentiment. But the downbeat mood on Wall Street on Friday carried over into Monday’s trading.

Nikkei

NIK, -0.82%

  fell 0.8%, while Hong Kong’s Hang Seng Index

HSI, +0.65%

  rose 0.5%. The Shanghai Composite

SHCOMP, -0.13%

 slipped 0.4% while the Shenzhen Composite

399106, -0.27%

  declined 0.6% ahead of the National Day holiday, which will shut Chinese markets until Oct. 8. South Korea’s Kospi

180721, +0.56%

  rose 0.5% while benchmark indexes in Singapore

STI, -0.18%

  and Indonesia

JAKIDX, -0.57%

  declined. Australia’s S&P/ASX 200

XJO, -0.01%

  was flat.

Hong Kong got a boost from reassuring comments by the chief executive of its monetary authority.

Norman Chan Tak-lam, who is stepping down, said that despite the past several months of political protest, “the monetary system that means the exchange rate, the banking system and the financial system, have remained stable, and they have been continue to function normally and smoothly.”

Two gauges of Chinese factory activity improved in September ahead of a round of trade talks with Washington.

Surveys released Monday by an industry group and a business magazine both showed improvement, though the gains were small.

Demand for Chinese goods has been hurt by weakening domestic and global economic growth as well as U.S. tariff hikes in a fight over trade and technology. Negotiators are due to meet next month in Washington but there has been no sign of progress toward ending the dispute.

China said Sunday that its top trade negotiator, Vice Premier Liu He, will travel to Washington on October for renewed trade negotiations with the U.S. An exact date for the talks was not announced, but a senior Chinese official said “The two sides should find a solution through equal dialogue in accordance with the principle of mutual respect, equality and mutual benefit,” the Associated Press reported.

On Friday, reports emerged about possible White House plans to restrict U.S. investment in Chinese companies. U.S. Treasury officials on Saturday denied any plans to do so “at this time,” but also did not rule them out, leaving analysts and investors to wonder if it was a negotiating tactic or a signal of a much harder line by the Trump administration.

Among individual stocks, SoftBank

9984, -2.92%

  fell in Tokyo trading, along with Toyota

7203, -2.29%

 and Screen Holdings

7735, -3.65%

 . In Hong Kong, PetroChina

857, +2.27%

  and China Mobile

941, +1.72%

  rose, and Budweiser APAC — the Asian spinoff from beer-maker Anheuser-Busch InBev — opened higher in its massive initial public offering. LG Electronics

066570, +1.20%

  and SK Hynix

000660, +0.49%

  gained in South Korea, while Rio Tinto

RIO, +1.80%

  gained in Australia.

Wall Street capped a choppy week with a second straight weekly loss for the S&P 500 Friday as worries about a potential escalation in the trade war between the U.S. and China erased early gains.

Technology companies led the broad slide as investors weighed reports about possible White House plans to restrict U.S. investment in Chinese companies. U.S. Treasury officials on Saturday denied any plans to do so “at this time,” but also did not rule them out, leaving analysts and investors to wonder if it was a negotiating tactic or a signal of a much harder line by the Trump administration.

Uncertainty over the long-running trade war has fueled volatility in the market and stoked worries that the impact of tariffs and other tactics employed by the countries against each other is hampering U.S. economic and corporate profit growth.

The possibility that the U.S. is weighing another way of applying pressure on China dampened investors’ already cautious optimism that the world’s two biggest economies might make progress as their representatives resume their negotiations.

The S&P 500 index

SPX, -0.53%

 fell 0.5% to 2,961.79. The benchmark index finished the week with a 1% loss. Even so, it remains 2.1% below its all-time high set in July.

The Dow Jones Industrial Average

DJIA, -0.26%

 dropped 0.3% to 26,820.25. The Nasdaq

COMP, -1.13%

 , which is heavily weighted with technology stocks, lost 1.1% to 7,939.63.

Investors also shifted money out of smaller company stocks, pulling the Russell 2000 index

RUT, -0.84%

 down 12.85 points, or 0.8%, to 1,520.48.

Benchmark crude oil

CLX19, -0.14%

  rose 13 cents to $56.04 per barrel in electronic trading on the New York Mercantile Exchange. It lost 50 cents on Friday to $55.91 a barrel.

Brent crude oil

BRNZ19, -0.11%

 , the international standard, picked up 13 cents to $61.17 a barrel.

The dollar

USDJPY, -0.12%

 slipped to 107.95 Japanese yen from 107.97 yen. The

EURUSD, -0.0366%

 strengthened to $1.0935 from $1.0934.

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Republican Rep. Adam Kinzinger blasted President Donald Trump on Sunday night after the president quoted a Fox News contributor who warned of possible civil war if he is impeached.

The Illinois congressman, who is an Iraq War veteran, was the highest-profile Republican to criticize Trump, who Sunday night tweeted a quote by Pastor Robert Jeffress earlier in the day on Fox News: “If the Democrats are successful in removing the President from office (which they will never be), it will cause a Civil War like fracture in this Nation from which our Country will never heal.”

….If the Democrats are successful in removing the President from office (which they will never be), it will cause a Civil War like fracture in this Nation from which our Country will never heal.” Pastor Robert Jeffress, @FoxNews

— Donald J. Trump (@realDonaldTrump) September 30, 2019

Trump actually misquoted Jeffress, who said on Fox News: “I’m afraid it will cause a Civil War-like fracture.”

Kinzinger was outraged by Trump’s tweet. “I have visited nations ravaged by civil war. @realDonaldTrump I have never imagined such a quote to be repeated by a President. This is beyond repugnant,” he said.

I have visited nations ravaged by civil war. @realDonaldTrump I have never imagined such a quote to be repeated by a President. This is beyond repugnant. https://t.co/a5Bae7bP7g

— Adam Kinzinger (@RepKinzinger) September 30, 2019

Many on social media expressed similar concerns, and said Trump’s tweet was dangerous, tantamount to threatening violence if he is impeached.

Trump spent much of his day tweeting about the impeachment proceedings, claiming he’s been framed, lashing out at the whistleblower and calling for Democratic Rep. Adam Schiff to be investigated for treason.

Jeffress is a pro-Trump megachurch pastor from Texas with a record of controversial and offensive comments, including calling climate change “imaginary,” calling Mormonism “a cult” and saying Jews will go to hell.

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Is the White House’s reported plan to restrict U.S and Chinese investment a negotiating ploy in Trump’s efforts to get a trade deal, or a symptom of a multiyear struggle between China as a new superpower and America in its determination to maintain control of the international economic order it helped create after World War II?

According to reports on Friday, the White House may now be looking to restrict capital flows into China and to limit Chinese companies from trading on U.S. exchanges.

The news sent the U.S. benchmark S&P 500 index

SPX, -0.53%

and the Dow industrials

DJIA, -0.26%

down on Friday, with the MSCI China Index off 1.6%, and stocks closed lower for a second straight week, Chinese internet giants listed in the U.S. were hit hard. Alibaba

BABA, -5.15%

fell 5% and Baidu

BIDU, -3.67%

lost nearly 4%.

See: What investors need to know about a potential White House effort to block U.S. investment in China

Even though “trade wars are good, and easy to win” according to President Trump in March 2018, the White House now feels the need to widen the struggle with China from a dispute about traded goods and intellectual-property rights into a whole new arena involving potential capital controls.

The move comes at a sensitive time for U.S.-China relations, as the two countries seek a resolution of the trade dispute in talks in Washington on Oct. 10-11, with a Chinese delegation led by Vice Premier Liu He.

For Chinese investors Monday will be the last chance to react to the new risk before a five-day market closure until Oct. 8 to mark the 70th anniversary of the Communist Party’s taking power in 1949.

On Saturday the U.S. Treasury denied there was any plan “at this time” to go ahead with investment restrictions, but the risk remains as two bipartisan bills have already been introduced to Congress aimed at pushing U.S.-listed Chinese companies to comply with auditing rules in the U.S. If those companies failed to submit to regulatory oversight, they would face de-listing.

U.S. investment in China’s domestic markets is limited, with residents holding only about $203 billion of mainland financial assets as of June, according to the U.S. Treasury, though this month China removed another hurdle to foreign investment in its stock and bond markets.

China also recently launched the so-called Star board in Shanghai with looser trading rules to encourage China’s startups to list on local exchanges rather than in the U.S. or Hong Kong. For now though major Chinese companies depend on raising capital in the U.S. The total market capitalization of Chinese companies listed on U.S. exchanges is about $1.2 trillion, according to a report from the U.S.-China Economic and Security Review Commission.

Citigroup described the proposed legislation as the most extreme potential American move against China in the escalating face-off between the world’s largest two economies: restricting access to U.S. financing. The bills could “have a profound impact” on the more than 200 Chinese companies trading on U.S. exchanges, Citigroup economist Cesar Rojas wrote in a report earlier this month.

If the White House were to go through with the plan to restrict U.S.-China capital flows, “it would be an unmitigated disaster,” Stephen Roach, currently at Yale University and former chairman of Morgan Stanley Asia, said in a CNBC interview on Friday. “Open access to each other’s markets is really important, especially with China likely to be the biggest consumer market in the world in the first half of this century,” he said.

“With the global economy really weakening, recession likely in Europe, downside in Japan and throughout east Asia, the American consumer has really been the only thing that’s held the [U.S.] economy afloat,” Roach said. “But with businesses in the U.S. turning cautious on capital spending, the same businesses that make decisions on hiring, if they pull the plug on job growth, then consumers are in trouble.”

U.S. consumers already had cited trade policy as a negative factor, slowing U.S. economic progress, in a Conference Board survey last week.

Given Trump’s accusation that China is manipulating its currency, Friday’s report also raises the risk of widening the U.S.-China struggle over trade and capital flows still further into a currency war. China is promoting the global use of the yuan in competition with the U.S. dollar as the world’s reserve currency. For now though, in a Friday note Goldman Sachs analyst Zach Pand is keeping a near term forecast for the yuan

CNYUSD, +0.0141%

USDCNH, -0.2088%

to drop to 7.2 per dollar, “in light of renewed uncertainty around portfolio flows,” along with the expectation that the U.S. proceeds with the next round of tariff hikes as scheduled on Oct. 15.”

The bigger picture

The bigger picture here though is that Trump’s trade war is driven by U.S. anxiety over China’s rise in a single generation to become the second largest economy in the world, rather than by economic rationality, argues Koichi Hamada of Yale University and a special adviser to Japanese Prime Minister Shinzo Abe. Japan has seen this movie before in its own struggles with the U.S. over trade policy in the 1980s.

Indeed, the U.S.-China trade dispute reminds historians and foreign-policy analysts of what is called the “Thucydides Trap,” in which a series of trade and shipping disputes between ancient Athens and Sparta in the 5th century B.C. escalated into the 27-year-long Peloponnesian War, which ultimately destroyed both of the regional superpowers of the day.

As for economic rationality, as Robert Barro, an economics professor at Harvard University, has noted, the reason that countries participate in international trade is to get imports of consumer goods and capital equipment in exchange for exports. Exports are simply the goods that Americans are willing to part with to acquire something they want or need. As economists have observed for two centuries, international trade also boosts the size of the overall economic pie, because it means that countries can focus on doing whatever it is that they do best, producing goods in areas where they are relatively more productive.

But by embracing a primitive mercantilist model in which exports are “good” and imports are “bad,” Trump and his trade adviser Peter Navarro have reversed this long-held economic logic, Barro argued. In a mercantilist model, an excess of exports over imports or a trade surplus, such as China runs with the U.S., increases China’s national wealth at the expense of America. In reality China’s trade surplus with the U.S. of about $500 billion per year has been reinvested in U.S. Treasury bonds, helping to fund the U.S. federal budget deficit.

While it is true that China imposes costs on foreign investment, often by forcing foreign businesses to transfer technology to their Chinese partners, and sometimes via outright theft of intellectual property, imposing import tariffs only disrupts global manufacturing supply lines and undermines growth in both economies.

The favorable short-term impact on U.S. economic growth from the Trump administration’s 2017 tax cuts is now fading, and Trump has tried to pin the blame on the Federal Reserve, but it now seems likely that the U.S. is faced with an ongoing trade war, implying long-term costs for American consumers and businesses that could push the U.S. economy into recession.

Read on: A manufacturing downturn could still hurt the broader U.S. economy, but not trigger a recession as in the past

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