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.
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!! 🙂
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!! 🙂
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
The June number will be closely watched after a surprisingly poor showing in May, when the U.S. economy was initially reported to have added just 75,000 jobs. That number was revised even lower on Friday, to just 72,000. April’s number was revised down to 216,000 from 224,000. Economists surveyed by Econoday had been looking for a gain of 165,000 for June and for unemployment to remain steady at 3.6 percent. The June number will also be looked to as a barometer for the Federal Reserve’s monetary policy. Last month, the Fed signaled that it was ready to cut rates if the economy continued to show signs of slowing and inflation remained low. The stronger than expected number may create some hesitancy to cut rates. While the economy has continued to grow in the second quarter, it has shown signs of slowing from the rapid 3.1 percent rate of growth in the first three months of the year. Manufacturing has been a weak spot while consumer spending and the labor market have been strong. Economic weakness around the globe may also be weighing on the U.S. economy by reducing demand for U.S. exports. And uncertainty around trade may also be making businesses hesitant to invest and hire. With unemployment near 50-year lows, job growth has slowed. Employment growth has averaged 172,000 per month thus far this year, compared with an average monthly gain of 223,000 in 2018. But wage gains have gone the opposite direction. In June, average hourly wages were 3.1 percent above the year-prior level. Manufacturing jobs showed renewed strength, adding 17,000 jobs after four months of coming in flat. Construction jobs rose by 21,000. Transportation and warehousing added 24,000 jobs. Employment in health care increased by 35,000. Professional and business services added 51,000 jobs.
The U.S. broke its record for time without an economic recession Monday as it began the 121st consecutive month of gross domestic product (GDP) growth since the 2008 recession. The recovery, which began in July 2009, turned 10 years old Monday, marking the longest stretch of economic expansion in modern U.S. history. After unemployment peaked at 10 percent in October 2009, the decadelong recovery drove the unemployment rate down to near record lows — 3.6 percent as of June. The economy has added jobs in every month since October 2010, while GDP growth has stayed solid, if not always remarkable, throughout the past 10 years. But even though the U.S. boasts strong top-line numbers after 10 years of expansion, millions of workers in hundreds of communities across the country have failed to feel the full benefits. The Federal Reserve sought to stimulate the economy with near-zero interest rates and billions in bond purchases after the 2007 financial crisis kicked off the recession in 2008. The Fed’s efforts are widely praised by left-leaning economists for stabilizing and rebooting the U.S. economy. But the Fed’s cheap money policies may have also driven income inequality to record levels. Low interest rates helped fuel a stock market rally and spikes in home prices that provided little income for those who lost their homes and savings in 2008, analysts say, but a boon for those who weathered the recession without dire costs. Wage growth has also lagged behind the sharp drop in unemployment, even as job openings outnumber available workers by close to 1 million, according to Labor Department estimates. And while the U.S. has added millions of jobs since the recession, they have primarily been positions in the service sector, doing little to lift communities that depended for decades on lost manufacturing jobs.
An interesting assessment from the “left-leaning” The Hill publication.
Stocks rallied on Thursday, led by strong gains in tech and energy shares, as Wall Street cheered the possibility that the Federal Reserve will cut interest rates next month. The S&P 500 surged 1% to 2,954.18, a record close. The broad index also hit an intraday record of 2,958.06. The Dow Jones Industrial Average closed 249.17 points higher at 26,753.17. The Nasdaq Composite gained 0.8% to end the day at 8,051.34. The yield on the 10-year Treasury fell below 2% for the first time since November 2016. Investors cheered the decline in the benchmark for mortgage rates and corporate bonds. The energy sector rose more than 2% to lead all 11 S&P 500 sectors higher as oil prices jumped. Tech gained 1.4% after shares of Oracle surged more than 8% on stronger-than-forecast earnings. General Electric’s 2.8% rise pushed the industrials sector up more than 1.6% on the day. “Markets are based on numbers and perception. If the perception is rates are getting cut, that’s going to drive markets higher,” said Kathy Entwistle, senior vice president of wealth management at UBS. “UBS’ stance up until yesterday was we wouldn’t see any rate cuts this year. Now we see a much larger chance of a 50-basis-point cut.” The Fed said Wednesday it stands ready to battle growing global and domestic economic risks as they took stock of intensifying trade tensions and growing concerns about inflation. Most Fed policymakers slashed their rate outlook for the rest of the calendar year by approximately half a percentage point in the previous session, while Chairman Jerome Powell said others agree the case for lower rates is building. Policymakers also dropped “patient” from the Fed’s statement and acknowledged that inflation is “running below” its 2% objective. Market participants viewed the overall tone from the U.S. central bank as more dovish than expected. Traders are now pricing in a 100% chance of a rate cut next month, according to the CME FedWatch tool. With Thursday’s gains, the market has now erased the steep losses recorded by the major indexes in May, which were sparked by trade fears.
Such great news in this Trump economy! 🙂