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Pre-Market Primer: Anti-Japanese Protests in China Could Hurt Global Economy

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Obama is also banging the trade-war drums.

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MINYANVILLE ORIGINAL Anti-Japanese protests in China turned violent this weekend. Protests over the Japanese government's claim to what the Chinese call the Diaoyu Islands resulted in riots. Factories that do business with Japan were shuttered for safety concerns. As Chinese trashed stores and destroyed Toyota (TM) vehicles, shares of Japanese stocks sold off in Chinese markets on fears that Beijing might also retaliate against Japanese manufacturing interests. China and Japan enjoyed $345 billion in two-way trade last year, which could be in jeopardy.

Chinese stocks didn't fare much better in Asian trading today. Citigroup analysts cut cut their growth forecast for China on Friday. The bank lowered its GDP forecast for the country to 7.6% from 8%. It also came out that US President Barack Obama will launch a trade complaint in the WTO over the Chinese government's backing of the auto industry. The complaint says that China imposes $3 billion in tariffs on US auto imports and unfairly subsidizes its domestic industry.

Stock futures pared last week's gains today. Dow (^DJI) futures fell 0.24% to 13,485. Down from a five-year high, S&P 500 (SPY) futures are down 0.30% to 1,454.60. Nasdaq (^IXIC) futures slipped 0.18% to 2,845.25.

The rally in commodities spurred by the Federal Reserve's announcement of open-ended stimulus might have been overplayed. Copper futures fell in London. Freeport-McMoRan (FCX), the biggest publicly traded copper company, fell 1.03% in pre-market trading. Freeport's share price went from $35.25 on September 5 to over $43 on Friday.

The European Union's trade surplus narrowed from a revised 9.3 billion euros to 7.9 billion euros in July. The surplus was still larger than the average for the second quarter of the year, but most surveys are not pointing to much optimism.

Just as JPMorgan (JPM) shares returned to their pre-London Whale levels, the Office of the Comptroller of the Currency has launched an investigation into possible money laundering at the bank. The regulator says that the bank did not monitor transactions well enough, making it easy for criminal behavior to take place.

AT&T (T) released a press statement which said that the Apple (AAPL) iPhone 5 is the fastest-selling iPhone ever.

Microsoft (MSFT) CEO Steve Ballmer said that the upcoming Surface tablet will be priced at "probably $300 to about $700 or $800." This may or may not sway customers away from the iPad, but Ultrabook makers should take heed of the lower price point for the lightweight computer.

Electronic Arts (EA) is currently in the process of suing Zynga (ZNGA) for intellectual property violations. Late on Friday, Zynga countered with a suit of its own, claiming that EA is in an illegal scheme to prevent Zynga from poaching employees from EA. If these allegations are true, it would run afoul of antitrust laws. EA shares were off more than one percent this morning.

Twitter: @vincent_trivett
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
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