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China leads Asian stocks higher after Trump-Kim agreement

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Mainland Chinese stocks led Asian market gains on Tuesday after the highly anticipated meeting in Singapore of U.S. President Donald Trump and North Korean leader Kim Jong Un.

Both signed an agreement that reaffirmed “unwavering commitment to complete denuclearization of the Korean Peninsula.” But the document offered few details.

The Shanghai composite climbed 0.9 percent in its best day since May 31. The index reached its highest level in two days. The Hang Seng rose 0.1 percent.

The iShares China large-cap ETF (FXI), which tracks stocks of large Chinese companies traded in Hong Kong, has climbed an average 0.9 percent in the two trading days after talks between leaders of North and South Korea that indicated improved relations, according to CNBC analysis using quantitative analytics tool Kensho. The majority of North Korea’s trade is with China, which supplies most of the rogue state’s oil.

The close relationship between the two also makes China an important part of U.S. efforts to put pressure on North Korea. However, trade tensions between the U.S. and China have increased in the last few months.

“President Xi [Jinping] of China … has really closed up that border, maybe a little bit less so over the last couple of months, but that’s OK,” Trump said during a press conference shortly after 4 a.m. ET. Trump added he would likely call Xi “very shortly” about the summit with Kim.

Japan’s Nikkei 225 closed up a third of a percent at 22,878.35, after briefly touching its highest level since May 22. The iShares MSCI Japan ETF (EWJ) was unchanged in premarket trading.

South Korea’s Kospi spiked 0.38 percent to its highest level since May 29, but erased those gains to close 0.05 percent lower. The iShares MSCI South Korea Capped ETF (EWY) is down 1.5 percent this year amid uncertainty in North Korea tensions. The ETF was unchanged in premarket trading.

“We will be stopping the war games, unless and until we see that the future negotiation is not going along like it should,” Trump said. “But we’ll be saving a tremendous amount of money. Plus I think it’s very provocative.”

However, Trump said the U.S. will not reduce military capability in the region.

North Korea would like the U.S. to remove its troops from South Korea, and made threats around U.S.-South Korea annual joint military exercises.

European stocks traded little changed as of 4:58 a.m. ET. U.S. stock index futures pointed to a flat to mildly lower open.

— CNBC’s Gina Francolla contributed to this report.



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Global stock market sell-off not an isolated event

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A trader works at the New York Stock Exchange in New York, the United States, Dec. 4, 2018. 

Xinhua News Agency | Getty Images

A trader works at the New York Stock Exchange in New York, the United States, Dec. 4, 2018. 

The latest wave of heavy selling in financial markets is a clear sign of things to come, according to a new report from the world’s oldest international financial organization.

The Bank of International Settlements (BIS), an umbrella group for the world’s central banks, warned on Sunday that a normalization of monetary policy is likely to trigger a flurry of sharp sell-offs over the coming months.

“The market tensions we saw during this quarter were not an isolated event,” Claudio Borio, head of the monetary and economic department at the BIS, said in the report.

“Monetary policy normalization was bound to be challenging, especially in light of trade tensions and political uncertainty,” Borio added.



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Fed is missing critical inflation trend, economic forecaster worries

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A veteran economic forecaster is worried the Federal Reserve and Wall Street are looking at inflation all wrong.

According to Economic Cycle Research Institute co-founder Lakshman Achuthan, they’re largely missing a critical economic trend that shows inflation is in a downturn.

“Inflation is cyclical, and I don’t think everybody really understands that — in particular, the Fed and a lot of market participants,” he said Wednesday on CNBC’s “Trading Nation.” “They’re looking at the level of inflation, and it’s generally up there around near target. But what’s really important is the direction.”

Achuthan highlighted a chart as evidence the inflation cycle is rolling over. He believes it could have market-moving consequences because it could affect the Federal Reserve’s interest rate policy.

“This is just a couple years of inflation cycles here,” he said. “We have PPI growth now and CPI growth both sitting at around 10 and 11 month lows. It’s not simply about oil. The peak in these things happened back in July.”

Achuthan, a self-proclaimed former super bull, has been bearish this year. On “Trading Nation” last April, he turned sour on economic growth because leading indicators were pointing to a slowdown that was picking up momentum.

For Achuthan to become bullish again, he said two things need to happen: The Fed must become more aware of the inflation downturn and leading growth indicators must turn up. The Fed meets on Tuesday and Wednesday to decide whether to raise rates for the fourth time this year.

“With inflation ticking lower, they should consider stopping. But fixated on a 49-year low in the jobless rate and a 9 ½-year high in wage growth, it’s not clear that they will stop just yet,” Achuthan told CNBC by email.



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Harvard professor Roland Fryer faces reports of sexual harassment

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Harvard University professor Roland Fryer speaks at the Clinton Global Initiative in New York on Sept. 25, 2008.

Ramin Talaie | Corbis Historical | Getty Images

Harvard University professor Roland Fryer speaks at the Clinton Global Initiative in New York on Sept. 25, 2008.

A prominent Harvard University economics professor is being investigated for sexual harassment, according to a new report.

Roland G. Fryer Jr., a 2011 MacArthur “Genius” fellowship recipient, is the one of the latest powerful men to get flagged amid the #MeToo movement, which took hold last year. More than 200 men have lost their jobs or major roles as a result, the New York Times said in October.

A Harvard investigator found that Fryer was involved in “unwelcome conduct of a sexual nature” with four women who worked at Fryer’s research lab, the New York Times reported on Friday. The investigator learned that one person who made an accusation about Fryer took disability leave in response to Fryer’s behavior, according to the report.

Allegations about Fryer came to light earlier this year but Friday’s New York Times article provides new details.

One woman who worked in the lab reportedly said that Fryer regularly made inappropriate comments about women, but that his reputation for being vindictive made it difficult for people to speak up. And two women told the investigator they disapproved of how Fryer had put his crotch in the face of a woman at the lab by placing his foot on her desk, the article said.

Read the full article here.



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