(07 AUGUST 2020)DAILY MARKET BRIEF 1:Asian equities fall as US extends attack on Chinese tech.

S equity indices gained for the fifth day on hope that an additional fiscal stimulus package would soon be signed, or extra measures including enhanced benefit payments, payroll-tax holiday and student loan repayment relief would be forced by President Donald Trump if the deadlock among Congressional politicians persists.

But investors in Asia got cold feet this Friday, as Trump prohibited US firms from doing business with the most popular Chinese tech companies TikTok and WeChat due to national security issues. But these actions also aim to curb China’s rising tech power and escalate the cold war between the two countries.

Trump’s growing attack on Chinese tech sent Asian stock indices lower on Friday, as the escalating tensions between the US and China also threatens the trade agreement that the two countries spent two years getting signed.

The Nikkei (-0.71%) edged lower, the ASX 200 (-0.67%) slid. The Hang Seng (-2.27%) and Shanghai’s Composite (-1.45%) fell. The tech companies led losses as the WeChat provider Tencent’s share price slumped as much as 10% at the open.

Activity in stock futures hint that the European indices could extend Thursday’s loss into the weekly closing bell.

Tencent’s most popular WeChat is known as the Chinese WhatsApp, but it is more than that. The platform allows messaging, but is also the most used social media and online payment platform in China and is home to a huge amount of online shops offering an unlimited range of products and services. But the messages are not encrypted, and WeChat’s unfolded ecosystem is said to allow the government watchers to retrace its users’ activities giving all the good reasons to Donald Trump to curtail the platform’s growing influence beyond the Chinese borders.

Data-wise, the US jobless claims rose less than 1.2 million last week, the lowest since the beginning of the pandemic, versus 1.4 million penciled in by analysts, The data suggests a continuous improvement in the US jobs market, although investors know that there is still a long way to go before reaching the pre-crisis levels.

The US July nonfarm payrolls data is due today. Analyst expect the US economy added 1.6 million nonfarm jobs last month, versus 4.8 million printed a month earlier. But the investors are prepared for a much higher, or a much lower figure as expectations remain blurry and mostly inaccurate due to the extraordinary economic conditions. A fairly positive read should keep investors optimistic about the future: a lower-than-expected positive number would enhance the chances of getting the additional fiscal stimulus passed, while a better-than-expected figure would boost the idea of a solid economic recovery. A negative number, however, would come as a warning that the stimulus measures remain stuck in the financial markets and are not being conveyed to the real economy. The latter could dampen the mood, at least momentarily.