Alibaba executive chairman Jack Ma, left, with Tesla chief executive officer Elon Musk in Shanghai on Thursday.
BEIJING — Jack Ma, the Chinese tech billionaire known for arguing in favor of a 12-hour work day, sees a future in which people will have to work only 12 hours a week.
The founder of e-commerce behemoth Alibaba said Thursday that technological advancements would enable people to live longer and work far fewer hours.
“Every technology revolution, people start to worry. In the last 200 years we have worried [that] new technology is going to take away all the jobs,” he said in a discussion in Shanghai on Thursday with Elon Musk, Tesla’s billionaire founder. Tesla is building an electric-vehicle factory in the city, and the two were on the stage at the World Artificial Intelligence Conference there.
Ma has previously courted controversy with his endorsement of the “996” work practices prevalent in China’s tech industry, under which employees are expected to work 9 a.m. to 9 p.m., six days a week.
In remarks earlier this year, Ma said that the opportunity to work such hours was a “blessing” and that without this kind of working culture, China’s economy was “very likely to lose vitality and impetus.”
Another tech titan went further, declaring that the 996 culture was for slackers. Richard Liu, chief executive of rival e-commerce company JD.com, said he works “8116+8” — or 8 a.m. to 11 p.m. Monday to Saturday, then a mere eight hours on Sunday.
But speaking with Musk on Thursday, Ma said that in the future, people would be able to enjoy a much shorter workweek.
“In the next 20 to 30 years, human beings will live much longer. Life science technology is going to make people live probably 100 or 120 years,” he said. “That may not be a good thing because you get your grandfather’s grandfather still working hard.”
But it didn’t matter, he said, as the world wouldn't need a lot of jobs.
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“I think people should work three days a week, four hours a day,” he said, citing previous technological leaps like the Industrial Revolution and the use of electricity as improving work-life balance.
“The power of electricity is that we make people more time, so you can go to the karaoke in the evening, you can go to dancing parties in the evening,” he said in English.
“I think that because of artificial intelligence, people will have more time to enjoy being human beings. I don’t think we’ll need a lot of jobs,” Ma told Musk. “The jobs we need are [ones to] make people happier. People experience life, enjoy [being] human beings.”
“Ma has said previously that 996 was a blessing. How can he say now that people can work three days a week, four hours a day, and go to karaoke or dance parties in the evening,” asked one person using the nickname “Be a friend with time daily” on Weibo, the Chinese version of Twitter.
“Previously he talked in Chinese about 996. That’s for us. This time, he said ‘three days a week, four hours a day’ in English. That’s for foreigners.”
Another, using the name “Soda water,” used a Chinese saying that means two things don’t fit together: “Musk will find that this dialogue is like putting a donkey’s lips on a horse’s mouth.”
Trump's trade war with China could undermine GOP chances of holding the White House and Senate in 2020.
Republicans have sat patiently with President Donald Trump on his tariff roller-coaster ride with China. Now they’re starting to feel queasy.
Trump argues his escalating trade war will force China to the table for a deal. But his ever-rising tariffs — and his market-rattling tweets — are increasingly alarming the GOP.
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“There’s no question that trade uncertainty is contributing to the slowdown,” said Sen. Pat Toomey (R-Pa.), a leading free-trader. “We’re in a very good place. The danger is: Where are we going to be a year from now if concerns about trade continue to be an irritant to growth?”
Particularly as the global economy cools, key Republicans say new levies on almost all Chinese goods threaten to step on the president’s good news story: A growing economy, rising wages and low unemployment. And that could have outsize effects on Republicans’ tough task of defending the Senate and the White House in 2020.
“The biggest risk to the economy is the whole trade situation,” added Sen. Ron Johnson (R-Wis.) in an interview. “I think the president did a great job, we stopped doing the regulatory burden, we have a fairer tax system ... and the whole trade war has injected a huge dose of uncertainty and instability.”
Most Republicans have resisted Trump’s protectionist tendencies for ideological reasons as well as for the hit to the economy and their own political fortunes. But they've made an exception on China given its economic rivalry with the United States. Now his tariff regime on Chinese, European and North American imports have reduced economic growth and increased household costs, according to the Congressional Budget Office.
Amid some talk by Trump of new tax cuts to juice the economy, his own political party is cool to the idea. Instead GOP senators are urging the president to conclude new trade deals with Japan and the United Kingdom and intensify the effort to push the United States-Mexico-Canada Agreement through Congress.
Republicans like Toomey are also advising the White House to embrace modest renewals of expiring tax provisions to counteract a slowdown in business investment.
And, however delicately, they are urging Trump to show more flexibility on China.
“The administration has to be prepared to take off the tariffs in order to get a good agreement,” said Sen. Rob Portman (R-Ohio), a former U.S. trade representative. “And there’s been some disagreement about that within the administration. Some are saying they should come off and others are saying we should keep them. I don’t think you’ll get a good agreement if you do that.”
Trump has largely staked his reelection on his economic prowess, so any slowdown could narrow his path back to the White House and undercut the GOP effort to hold the Senate majority.
“An economy slowing could be a political threat. If you slow down to 1 percent going into the 2020 election, that’s the same thing as a recession politically,” said Douglas Holtz-Eakin, president of the center-right American Action Forum and a former CBO director. “You grow at 1.8 percent? You’re back to Obama territory. You can’t survive that.”
For Republicans up for reelection, “at what point is it better for you separate yourself from the president as opposed to riding his coattails?” Holtz Eakin added.
White House spokesman Judd Deere said the president is merely trying to “level the playing field for American workers” and played down fears of a slump, citing the current expansion.
“It’s clear that the president’s polices of fair and reciprocal trade along with lower taxes and deregulation are working,” Deere said.
Any Trump-fueled economic drag will quickly fall on the at-risk GOP senators who hold the keys to the Senate majority. Susan Collins’ Maine has seen lobster sales to China plunging; farmers in Joni Ernst’s Iowa have had a brutal year.
“Everyone acknowledges that the economy is good, but they are still uneasy about their own circumstances,” said one Republican official working on Senate races. “I am nervous that people will lose their patience and want to start seeing results.”
The GOP is eager to give markets some semblance of certainty, and Republicans are openly brainstorming ways to stabilize the economy. Some are urging the White House to index capital gains to inflation; others are advising a singular focus on passing the USMCA.
House Speaker Nancy Pelosi (D-Calif.) has thus far resisted voting on the new North American trade deal despite support for the pact among some swing-district Democrats. It might not come to the floor at all while Trump is president given Pelosi’s demands to strengthen labor and environmental standards in the agreement.
“It would be great to get USMCA done this year. But it would not at all surprise me if it happens in the next administration,” said Rep. Don Beyer (D-Va.).
Pelosi previously stalled trade deals under President George W. Bush, but Republicans argue a repeat of those tactics would more difficult with her majority staked in large part on pro-trade Democrats.
“That’s an untenable position for them to continue to block it,” Portman said. “USMCA is practical. At some point, you’ve got to allow people to have a vote.”
Congress has taken some steps to keep the economy humming, raising the debt ceiling and passing a two-year budget deal that will likely help avoid a government shutdown at the end of September. Some Senate Republicans are also eager to pass a long-term transportation bill and members of both parties want to vote on legislation aimed at reducing health care costs.
No firm decisions about the fall agenda have been made by GOP leaders. Collins said she’s personally asked Senate Majority Leader Mitch McConnell (R-Ky.) to make a bipartisan health care package a priority and turn the Senate’s focus toward legislation, rather than nominees.
Others are diving into the geopolitics of Trump’s conflict with China. Portman is urging White House officials to develop an international coalition to isolate China, while Sen. Steve Daines (R-Mont.) is traveling to China next week to discuss trade with the country’s leaders.
Trump has toggled between calling Chinese President Xi Jinping the “enemy” to showing “great respect” for him. He’s ordered U.S. companies to move out of China before backtracking and saying a few days later that he’s likely to “have a deal” with Beijing.
And some Republicans say the fight with China is worth the short-term pain.
“Do I like tariffs as a matter of policy on any given day? No. What other alternatives do you have to rebalance what has now been 30 years of cheating, lying, stealing and unfairness on behalf of the Chinese?” said Sen. Marco Rubio (R-Fla.).
For months, Republicans have agreed that Trump is right to take on China even as they opposed his tariffs on allies. But their patience isn’t endless.
Some blame White House trade adviser Peter Navarro, who’s pushed a hard-line approach toward China and asserted the economy will remain strong.
“I don’t think Peter Navarro understands the instability of what he promotes. [And what] his trade war, is injecting into the economy,” Johnson said.
The worry among free-traders is that China’s one-party system can wait out Trump and avoid political consequences. That’s something that the White House and Republicans simply can’t do with an election 14 months away.
“I give the president credit for confronting China on the very bad behavior they’ve engaged in. I’m not sure these are the best tactics,” Toomey said. “The Chinese have the capacity to hold out for a very long time.”
Alibaba Group Chairman Jack Ma and Tesla CEO Elon Musk at the World Artificial Intelligence Conference in Shanghai, China, Thursday. Photo: VCG/VCG via Getty Images
Alibaba Group Chairman Jack Ma told the World Artificial Intelligence Conference in Shanghai Thursday that artificial intelligence should enable people to work 4 hours a day, 3 days a week, Bloomberg reports.
Why it matters: It's a remarkable demonstration of Ma's faith in AI, given he's known for endorsing the Chinese tech sector's standard "996" schedule, which consists of a 72-hour workweek: 9 a.m. to 9 p.m., six days a week.
The big picture: Ma appeared onstage at the event with Tesla CEO Elon Musk, with whom he had a disagreement on whether humans can be outsmarted by computers.
U.S. stock index futures turned positive Thursday morning, after China said it wished to resolve its protracted trade dispute with the world's largest economy with a "calm" attitude.
At around 04:00 a.m. ET, Dow futures rose 184 points, indicating a positive open of more than 197 points. Futures on the S&P and Nasdaq were both slightly higher, reversing earlier losses.
When asked about its ongoing trade war with the U.S., China's commerce ministry reportedly said Thursday that it was opposed to escalating trade tensions.
The comments appeared to soothe investor concerns at a time when many are worried about the possibility of a global recession.
On Wednesday, the rate on the benchmark 30-year Treasury bond sank to an all-time low, while the U.S. yield curve inverted even further.
The closely-watched spread between the 10-year Treasury yield and the 2-year rate briefly fell to negative 6 basis points in the previous session. The move extended losses from earlier in the week, when the spread registered its lowest level since 2007.
A 10-year rate below the 2-year yield is viewed by fixed income traders as an important recession prognosticator, marking an unusual phenomenon as bondholders receive better compensation in the short term.
U.S. bond yields hovered marginally above record lows on Thursday morning.
Data, earnings
On the data front, the latest weekly jobless claims, a second reading of second-quarter GDP (gross domestic product) and advance economic indicators for July are all scheduled to be released at 8:30 a.m.
Pending home sales for July will follow slightly later in the session.
NEW YORK (Reuters) - U.S. Treasury debt yields fell on Wednesday, with 30-year yields setting all-time lows, as fears about a recession and trade tensions between China and the United States stoked unrelenting demand for low-risk government debt.
A specialist trader works at his station on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 2, 2019. REUTERS/Brendan McDermid
Inversion is spreading across the U.S. yield curve, where short-dated yields are running above long-dated ones, which has also unsettled investors as yield curve inversion often precedes a recession.
“A deeper inversion is sending a stronger statement that a meaningful slowdown is coming,” said Brian Rehling, co-head of global fixed income strategy at Wells Fargo Investment Institute in St. Louis, Missouri. “A recession is a possibility in the next 12 to 18 months, but it’s not a done deal.”
Investors added to their safe-haven holdings of Treasuries as UK Prime Minister Boris Johnson sought to limit parliament’s opportunity to derail his Brexit plan by suspending the House of Commons for around a month, starting in mid-September.
Treasury prices pared their gains as Wall Street rose, reversing earlier losses.
While some fund managers view Treasuries as expensive, they are hard pressed to make a case to sell them given the uncertain outcome of the trade developments between Beijing and Washington.
“It’s hard to see where the endgame is with the trade tensions,” said James Barnes, director of fixed income at The Bryn Mawr Trust Co. in Devon, Pennsylvania.
The Federal Reserve is also monitoring the trade tensions in its economic outlook.
Interest rates futures implied traders fully expect the U.S. central bank to lower key borrowing costs by at least a quarter point at its Sept. 17-18 policy meeting, following up on its first rate cut since 2008.
Meanwhile, the Treasury Department sold $18 billion in two-year floating-rate notes and five-year fixed-rate debt to solid demand.
It will complete this week’s $113 billion of fixed-rate government note supply with a $32 billion sale of seven-year debt on Thursday.
In late Wednesday trading, the yields on 30-year government bonds were 1.939%, down 2.2 basis points from late Tuesday. They hit an all-time low of 1.905% earlier Wednesday.
The 30-year yield is below 3-month T-bill rates, which has not happened since 2007.
As for the rest of the yield curve, the spread on three-month T-bill rates over 10-year yields widened to as much as 55 basis points, a level not seen since March 2007, while the premium on 2-year yields above 10-year yields increased to as high as 6.5 basis points, according to Refinitiv and Tradeweb data.
GRAPHIC: Biggest monthly fall in 30-year USTs since 2011 - tmsnrt.rs/2zrV0MJ
Additional reporting from Dhara Ranasinghe in London; editing by Jonathan Oatis and Chris Reese
Traders signal offers in the Ten-Year Treasury Note Options pit at the Chicago Board of Trade.
Scott Olson | Getty Images
Bond yields are heading south, and there appears to be no stopping them for now.
The benchmark 10-year Treasury note yield, which influences everything from business loans to home mortgages, has been hugging three-year lows and was at 1.45% Wednesday. That's below the 2-year yield of 1.5%, and the move has been signaling recession.
The 30-year Treasury bond yield fell to an all-time low 1.91% Wednesday as yields around the world, which move opposite price, slid to multi-year or record lows. U.S. rates followed a global move lower, with the Japanese 10-year yield falling to a new negative three-year low and the German 10-year bund yield sliding to its own record, minus-0.72%.
"This is one big trade," said Gregory Faranello, head of U.S. rates at Amerivet Securities. "The momentum and trends that are in place right now are pretty steadfast. There's nothing glaring to me that will change the dynamics right now. We're in the latter stages of the summer months. Liquidity is definitely an issue. When you look at it globally right now, it encompasses a lot of different, diverse things. Today we have the headline from the U.K.; you have this ongoing trade war, and this global yield structure just continues to unfold."
Strategists said the bond market has been caught between a number of forces and is now a vortex sucking in investors who have to buy yield, which keep getting lower as bond prices move higher. In the past several days, investors have begun to believe that there's a very good chance the trade wars between the U.S. and China could continue for a very long time, and possibly until after the presidential election.
Fear factors
The global economy is slowing, and increasingly there are warning signs that make it appear Europe could enter a recession. China's slowdown has sent a chill across emerging market economies, which have seen a decline in exports.
Then there is political uncertainty, which got even murkier in the U.K. on Wednesday, after Prime Minister Boris Johnson pushed back the reopening of Parliament until mid-October, limiting the amount of debate time and increasing the chances of a no-deal Brexit. Sterling fell and the 10-year gilt yield dropped to its lowest level in three years.
"The disaster scenario is if yields fall dramatically from here," said Michael Schumacher, director rates at Wells Fargo. "Hypothetically, if the trade situation intensifies, if maybe Hong Kong goes badly and Brexit seems like it results in a hard exit ... then what you probably get is a massive rally again in Treasurys."
"Anyone who is handing you a hard forecast in that scenario is throwing darts," he said. After the 10-year yield broke through the psychologically important 1.50% level Tuesday, Schumacher said investors are looking for the next target on the benchmark note at the record low it reached in the weeks after the U.K. voted for Brexit, or to leave the European Union.
"People seem to be fixated on 1.35%," he said.
For investors, he said a good place to hide might be in very short-term Treasurys. For instance, the 1-month Treasury bill was yielding 2.06%, well above other securities. "Why be a hero?" he said.
Many strategists do not expect U.S. bonds to follow the rest of the world into negative yields, but they concede it could happen. The other side of the falling yield story is that bond yields could quickly snap higher, if for instance there was significant progress in the trade situation. But strategists are skeptical that will happen any time soon.
"Clearly, the trade war is such a big piece of this and it remains so incredibly unpredictable. Most people feel like it's elevated to such an extent that it's highly unlikely to get anywhere," said Ralph Axel, rates strategist at Bank of America Merrill Lynch. He said people are wondering why China would sign a long-term deal with President Donald Trump ahead of the election.
Sinkhole of global yields
Another major factor driving yields lower is the fact that more than $16 trillion in bonds around the world now have negative yields, and the U.S. Treasury market has been a magnet for investors looking for yield, as well as safety.
Axel said he has a 1.25% target on the 10-year, and he also expects the 30-year yield to be at that level by the second quarter of next year.
Faranello said yields move lower because buying forces in more buyers as investors look to lock in yield. The question is will the consumer, who has been holding up the U.S. economy, begin to react to what's scaring markets.
"If you're a U.S. consumer, you see volatility in markets. You don't understand it. They see negative interest rates. You see the inverted yield curve, which consumers don't understand, and there's talk of recession," Faranello said. "This could be self-fulfilling at some point, and the Fed has to keep an eye on it."
Data in the next week could be important since it includes the monthly employment report next Friday and also ISM manufacutring and PMI, two indicators that have been signaling a slowdown in manufacturing
"The yield curve is telling us essentially that we're looking at zero percent GDP growth next year. That's what the front end of the curve would imply. The question is will the yield curve win out or will policy makers be able to support the data enough," Faranello said. "I have no idea how it's going to play out, but there's very incredible fear and focus on a recession."
Central banks behind the curve
Central banks around the world have been driving rates down as their economies slow, and the worry is that they are in a race to the bottom as they defend their currencies. Another worry is they don't have the ammunition they once had before the financial crisis since so many embarked on extraordinary easing efforts or already have super low rates. They also failed in the decade since the financial crisis to do much to spark inflation.
The Fed is widely expected to cut rates by a quarter point when it meets on Sept. 17 and 18.
"I think the Fed needs to go 50 [basis points]. The Fed, I think, has to change the tone globally. Heading into September, they need to hit it. They need to hit it 50. They need to change the tone and psychology of the market. Right now, we're in a vice," Faranello said.
Even before the Fed meets, the European Central Bank is meeting on Sept. 12, and it is expected to take action, including its already negative rate and possibly announcing asset purchases.
"We'll see what the ECB does. They have a lot of bad choices," Faranello said. "They're probably going to do several different things but the market is not convinced they have much power to turn the economy around now, and you're going to have to start thinking about fiscal boosts, but that's a sticky process when you have a [political] union. The big issue is central banks globally are just out of bullets, just at the same time tings are moving south...You feel like the central bank puts are less powerful.
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