What's going on?

The leader of Hong Kong�s government announced on Wednesday it would withdraw the controversial legislation that sparked a summer of protests � and (perhaps prematurely) relieved investors sent the region�s stocks up 4%.

What does this mean?

Hong Kong�s pro-democracy protests sprang up in response to the introduction of a controversial law that could�ve seen those accused of crimes sent to mainland China. In an attempt to placate protesters, that bill will now be withdrawn � satisfying one of their five key demands.

The prospect of an end to business disruption means Hong Kong�s stock market has recovered at least some of its 2019 gains. Shares of under-pressure property developers as well as local airline Cathay Pacific � walloped by Chinese political pressure and airport-occupying protesters � both bounced 7%. But that came too late for Cathay�s chairman, who has now followed the carrier�s CEO in parachuting out.

Why should I care?

For markets: It�s not over yet.
Hong Kong�s stock market performance this year remains well below that of other developed regions. Data out on Wednesday showed private sector (i.e. non-government) activity in August shrank by the most since 2009: retail sales plunged and orders from China dropped off at a record rate, even as services sector activity across the Sham Chun River picked up. But with four demands still unmet, the protests are likely to continue � and China, for whom a more closely integrated Hong Kong is key to future economic growth, is unlikely to back down either.

Zooming out: A slightly lower-stakes standoff across the Pacific.
Shares of ride-hailing rivals Uber and Lyft fell to the lowest level of their short stock market lives on Tuesday. That was due to the progression of another controversial local government bill, this time in California. The proposed law would force Uber and Lyft (among others) to treat Californian contractors as employees with the right to a minimum wage and paid vacations � and other US states could soon follow.