Economy

Dow jumps over 400 points on US-China trade progress

U.S. stocks kicked off the final day of the week on a high note as the U.S. and China begin day two of trade talks. This after President Trump signaled that thus far the talks are going well. He tweeted as much on Friday after the opening bell. Trump is set to meet with Chinese Vice Premier Liu He at the White House later today. The Dow rose by more than 400 points in early trading. Also providing a boost was a rebound in consumer sentiment, which in October climbed to a three-month high of 96, up from 93.2 the prior month, according to preliminary data released by the University of Michigan. In stock news, General Motors shares were higher after the automaker provided fresh details on negotiations with the United Auto Workers union. GM, in a letter, outlined some revised points on its offer to the union. Investors are also eyeing Apple which hit an all-time high after a Wall Street analyst raised his price target. Wendy’s also saw a nice pop after disclosing that sales in the third-quarter were stronger than expected. In commodities, oil prices spiked around 1 percent after a rocket attack on an Iranian tanker. Global investors are also expecting to hear from Saudi oil giant Aramco as it prepares for its initial public offering. Early reports indicate the company’s valuation may around $1.5 trillion, slightly below the $2 trillion Crown Prince Mohammed bin Salman was aiming for. In Europe, London’s FTSE gained 0.3 percent, Germany’s DAX added 1.9 percent and France CAC was higher by 1.2 percent. In Asia, China’s Shanghai Composite finished higher by 0.9 percent on Friday and 2.4 percent for the week. Tokyo’s Nikkei closed up 1.2 percent and 1.8 percent for the week. Hong Kong’s Hang Seng ended the session higher 2.3 percent and 1.9 percent for the week.

Trump cheers billions of dollars’ worth of US investments from major auto companies

President Trump on Monday touted a host of new investments in the U.S. worth billions of dollars. One of the investments is a $4 billion joint venture on behalf of Hyundai, Kia and Aptiv to develop autonomous driving technologies, which the president noted would bring a lot of “great jobs” back to America. The companies said last week that the driving platform would be available for robotaxi providers and automotive manufacturers in 2022. Additionally, Trump said Navistar, a leading manufacturer of trucks and buses, would be building a $250 million truck factory in San Antonio, Texas – bringing an additional 600 jobs. Navistar recently announced plans to invest $125 million in the Huntsville, Alabama, engine plant. Trump also mentioned – as previously reported by FOX Business – that tech giant Apple will build its new Mac Pro in Austin, Texas, after it was granted exemptions from tariffs to import parts from China. “The Mac Pro is Apple’s most powerful computer ever and we’re proud to be building it in Austin,” Apple CEO Tim Cook said in a statement last week. “We thank the administration for their support enabling this opportunity.”

More great news in this Trump economy!!    🙂

Apple will build new Mac Pros in Texas amid tariffs

Apple’s insanely expensive new desktop computer will be made in the United States — not China, the company announced Monday. The $6,000 Mac Pro will be built at Apple’s Austin, Texas, plant following US trade regulators approving 10 requests for tariff exemptions filed by Apple for computer parts. “The new Mac Pro will include components designed, developed and manufactured by more than a dozen American companies for distribution to US customers,” Apple said in a statement. The Mac Pro had been assembled at the Austin plant since 2013, but Apple announced earlier this year that its new computer would be made in China — prompting furor from President Trump, who has been critical of the company’s reliance on Chinese factories. “Apple will not be given Tariff wavers (sic), or relief, for Mac Pro parts that are made in China,” Trump tweeted. “Make them in the USA, no Tariffs!” Apple at that time said “like all of our products, the new Mac Pro is designed and engineered in California and includes components from several countries including the United States.” The new Mac Pro is slated for release this fall with an entry-level price of $5,999. It’s designed to be paired with Apple’s new $4,999 Pro Display XDR monitor, which in turn is mounted on a $999 Pro Stand. That means Apple’s new supercomputer will cost at least $12,000 before boosting any of its specs. Apple shares were up 0.6 percent Monday morning, at $219.10.

Trump announces new tariffs on China

President Trump said Thursday he is slapping a 10 percent tariff on $300 billion in Chinese imports as of Sept. 1, saying President Xi Jinping failed to fulfill key promises. Mr. Trump said the levy is on top of the heftier tariffs affecting more than $250 billion in imports. In a series of tweets, the president said Mr. Jinping has failed to block shipments of fentanyl to the U.S, as he’s promised, and hasn’t purchased U.S. farm products. Mr. Trump had touted both pledges as signs of incremental progress when they occurred, though now he says he’s disappointed with Mr. Xi. The China tariff announcement immediately reversed a positive day on Wall Street, turning a 250 point-plus gain in the Dow Jones index Thursday into a loss of more than 100 points within 15 minutes of the White House announcement. Both the broader S&P 500 and the tech-heavy Nasdaq indexes also fell back sharply. Even as he slammed China, Mr. Trump held out hope for a trade deal after “constructive” talks between both sides in Shanghai this week. Mr. Trump said his new levies will take effect right as Chinese officials travel to Washington in September to resume talks. “We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!” Mr. Trump wrote.

S&P 500, Nasdaq hit record highs as Google, McDonald’s, 2Q GDP lift stocks

Stocks Opens a New Window. soared Friday, with the S&P 500 and tech-heavy Nasdaq Composite notching record highs, as an important economic growth report Opens a New Window. came in better than expected while McDonald’s and Google turned in robust quarterly reports. The U.S. economy grew at a 2.1 percent pace, faster than Wall Street Opens a New Window. expected during the second quarter, driven by consumer spending. That topped the estimate for 1.8 percent growth, but slowed compared to first-quarter growth of 3.1 percent. The Department of Justice Opens a New Window. on Friday approved the long-awaited $26 billion merger of T-Mobile US Inc. Opens a New Window. and Sprint Corp., cutting a deal with a number of state attorneys general who had sued to block the deal and setting the stage for faster implementation of 5G service. Under terms of the department’s approval, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. Markets are also being helped by earnings from several companies, overcoming the disappointment of the European Central Bank’s hinting at future interest rate cuts, but not acting immediately. McDonald’s topped quarterly sales expectations helped by the 2 for $5 Mix and Match offer, sending shares higher. Amazon shares fell after the company reported its first profit miss in two years. The company also forecast lower income in the current quarter due to costs associated with one-day delivery. Shares of Google’s parent Alphabet’s shot higher after quarterly revenue and earnings came in far stronger than expected, easing growth concerns. Revenue rose 19 percent to $38.94 billion. Twitter shares jumped on better-than-expected second-quarter revenue, plus more users saw ads on the site. Almost 40 percent of the companies in the S&P 500 have reported earnings and so far the results are better than expected, with three-quarters beating profit forecasts and nearly two-thirds topping revenue estimates. A deal that had been talked about this week was finally made official as Apple purchased the majority of Intel Corp.’s modem business in a deal valued at $1 billion. Oil prices rose on Friday and were on track for a weekly increase. U.S. crude is heading toward a weekly gain of 1.1 percent. The yield on the 10-year Treasury slipped to 2.07 percent, and the price of crude oil rose 0.36 percent to $56.22 per barrel.

Great news in this Trump economy going into the weekend!!     🙂

Steve Forbes: Trump deregulation boosting our economy – Here’s one example

Two big things have been propelling the U.S. economy forward in impressive fashion: the 2017 Trump tax cuts and the president’s relentless drive to reduce unnecessary regulations, which are another form of taxation. One example of the president delivering his deregulation promise came in late May when the U.S. Department of Transportation and Federal Railroad Administration abandoned a costly regulatory proposal issued by President Barack Obama. The measure would have forced private freight railroad carriers to continue operating with two people in a locomotive cab. This proposed Obama, anti-business mandate was always wrongheaded, and its revocation carries important lessons for how best to regulate. It is also a positive development for the sake of a U.S. economy, whose strength is increasingly connected to the efficient movement of goods. E-commerce will only continue to grow as businesses fiercely compete, and America needs a multimodal transportation system to support this. Despite years of analysis, the federal government did not have data to show that two-person railroad crews – the standard operating model currently for big freight carriers like BNSF or CSX – are any safer than one-person crews used by many smaller freight carriers, like Indiana Railroad, or almost all passenger railroad systems throughout the U.S. The Obama proposal was not a serious attempt at promoting safety. Rather it was featherbedding pure and simple at the behest of unions. Ditching the proposal underscores the fact that regulators should embrace outcomes – such as reducing rail accidents – instead of prescriptions when writing rules. Rather than bow to narrow labor interests, regulators would be better served stating the goals and letting industries figure out the best ways to achieve them. This would encourage innovation and avoid the constant problems of regulators always being behind the curve when it comes to newer and better practices. The Trump Transportation Department deserves immense credit for turning rhetoric into action. A nanny-ish, we-know-best mentality on a decision better left to the private market is simply unneeded as railroads continue to set all-time safety records – a result of private investments averaging $25 billion in recent years. Indeed, as the American Action Forum outlined, “regulators should not impose specific and costly mandates when lacking evidence they will solve a problem. Regulators should also be mindful of the implications today’s regulatory decisions will have on future innovation, particularly when evidence suggests those innovations could improve safety.” Consumers should welcome this news too, as railroads now have a greater incentive to develop technology that will allow them to better compete for freight business. After all, truckers are feverishly working to reduce labor costs by employing autonomous technologies, and drones don’t need pilots to fly them. Instead, with action from the Transportation Department, trucks and railroads, along with the rest of the freight market, can let the market decide what works best. This is deregulation done right. Ironically, excessive government regulation came close to destroying the rail system; deregulation in the early 1980s saved it. Modernizing operations in the future – free from senseless dictates – will be critical for future U.S. economic growth.

Agreed 100!!   Thanks to Steve Forbes for that outstanding op/ed. Steve is Chairman and Editor-in-Chief of Forbes Media. His latest book, “Reviving America: How Repealing Obamacare, Replacing the Tax Code, and Reforming the Fed will Restore Hope and Prosperity”.  Excellent!!     🙂

China’s economy growth cools further amid US tariff war

The tariff war showed another sign of impacting the Chinese economy. China’s economic growth sank to its lowest level in at least 26 years in the past quarter, adding to pressure on Chinese leaders. The world’s second-largest economy grew 6.2 percent over a year ago. That’s down from 6.4 percent in the prior quarter, according to government data. President Trump Opens a New Window. hiked tariffs on Chinese imports to pressure Beijing over its technology development tactics and he tweeted about the results. Now, economists say the slowdown might extend into next year. Trump and Chinese President Xi Jinping agreed last month to resume negotiations. The two sides still face the same number of disputes that caused talks to break down in May. Weaker Chinese activity has global repercussions. China is the biggest export customer for its Asian neighbors and a major market for global suppliers of food, mobile phones, industrial technology and consumer goods. The International Monetary Fund and private sector economists have cut this year’s Chinese growth forecast to as low as 6.2 percent, a further marked decline after last year’s three-decade low of 6.6 percent.

Bottom line..  Trump’s tariff’s ARE working “big time!”  And, given China’s poor economic situation, NOW is the time to keep that pressure on so we get that better “deal” which hopefully will include addressing American intellectual property rights, etc