With no end in sight for the trade war between the U.S. and China, Morgan Stanley is worried that a global recession is coming. The bank said, “If talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining ~US$300 billion of imports from China, we see the global economy heading towards recession.”
Economy
Ford to cut 7,000 jobs
Ford Motor Co said on Monday it will eliminate about 10% of its global salaried workforce, cutting about 7,000 jobs by the end of August as part of its larger restructuring effort. “To succeed in our competitive industry, and position Ford to win in a fast-changing future, we must reduce bureaucracy, empower managers, speed decision making, focus on the most valuable work and cut costs,” said Ford CEO Jim Hackett.
Blacklisting Huawei could cost US companies
Following President Trump’s blacklisting of Huawei, American companies are no longer allowed to sell components to the Chinese company. This move could cost U.S. companies $11B in revenue.
Inu Manak: Is the GOP still the party of free trade? No
“The U.S. Constitution vests Congress with the authority to regulate commerce, but over the years it has ceded that authority. If the current environment does not invigorate Republican members of Congress to work to take back this responsibility, it is hard to take claims that they value trade as a benefit for Americans seriously. Meanwhile, polls suggest that most Americans support free trade, and Democrats have surpassed Republicans as its most ardent supporters. We have yet to see whether Democrats will take up the mantle of free traders, but in the meantime, the Republicans certainly can no longer claim that title, as they continue to make excuses for the president’s actions. The party of free trade? No. More like the Grand Old Protectionists.”
Trump’s steel tariffs on Canada and Mexico are lifted
The Trump administration has finally reached a deal with Canada and Mexico to lift steel tariffs, opening the door for the USMCA trade deal to be passed. U.S. lawmakers previously signaled resistance to passing the new trade deal if steel tariffs on U.S. allies remained.
A German supermarket chain is changing American shopping
The supermarket chain, Aldi, is revolutionizing grocery shopping and competing directly with the biggest names in the industry. Aldi is a super-efficient, low-price, no-frills supermarket that is continuing to grow, expecting to add 130 stores in 2019 alone.
The US is facing a major credit crisis
There is a point beyond which debt becomes a drag on growth. That means the recovery after the next recession will be even slower than the last. The U.S. seems to be quickly heading toward that point.
Daily News Ed Board: No light at the end of Trump’s trade tunnel
“To minimize the damage, Trump pushed for another $15 billion in subsidies to farmers losing out because their products now cost more. That’s above the $12 billion he authorized last year when he launched the trade war. Which means Americans pay for the tariffs not once, but twice. First, consumers lose by paying more for Chinese products. Second, taxpayers pick up the tab by bailing out ‘great patriot’ farmers who absorb economic pain for the motherland. With each new round of economic penalties, Trump tells Americans the clouds will break and the light will soon shine through. Right after they pay more, and more, and more.”
The trade war is leaving lasting effects on the markets
Investors are dealing with a painful new reality that the trade war between the United States and China could last indefinitely. That anxiety spread across the stock markets on Monday, as investors around the world tried to divine the potential fallout to economic growth and corporate profits.
Dow drops 550 points after China tariffs
Apple’s stock alone dropped nearly 5%. “Volatility is going to persist. People don’t know what to make of it,” said JJ Kinahan, chief market strategist at TD Ameritrade.
China retaliates against the US with tariffs of its own
China said it would raise tariffs on roughly $60 billion worth of U.S. imports, in response to the U.S. increasing tariffs on $200 billion worth of Chinese goods. Because China’s entire imports from the United States are considerably less than $200 billion, it has not had the option of matching the United States dollar for dollar.
Congress subpoenas Treasury and IRS heads over Trump’s taxes
Treasury Secretary Steve Mnuchin and IRS Commissioner Charles Rettig have been subpoenaed by House Ways and Means Committee Chairman Richard Neal to produce Donald Trump’s tax returns. The subpoena comes after the Treasury Department formally declined to turnover Trump’s tax returns.
Stock market on edge over tariffs
U.S. equity futures were little changed Thursday as traders nervously awaited a midnight deadline for tariffs on China to increase. Meanwhile the Nasdaq and S&P 500 dropped for the fourth day in a row.
US sanctions Iranian metals
President Trump signed an executive order sanctioning Iran’s industrial metals. Iran’s metal industry accounts for 10 percent of its export economy.
Uber, Lyft drivers to strike in major cities ahead of Uber Wall Street debut
Uber and Lyft drivers plan to strike Wednesday in major cities around the globe in opposition to Uber’s upcoming Wall Street debut. The drivers are striking for livable incomes, job security, and regulated fares, among other demands.
Trump may redefine poverty
The Trump administration may alter the way it determines the national poverty threshold, putting Americans living on the margins at risk of losing access to welfare programs. The possible move would involve changing how inflation is calculated in the “official poverty measure,” the White House Office of Management and Budget said in a regulatory filing on Monday. The formula has been used for decades to determine whether people qualify for certain federal programs and benefits.
The Dow’s terrible, no good, very bad day
The Dow had a lousy day. It fell 473 points, tumbling below 26,000 points. What happened? Trade Rep. Robert Lighthizer and Treasury Sec. Steven Mnuchin indicated late yesterday that Donald Trump was dead serious about his tariff threat — and new import penalties will be imposed on China on Friday. So the market freaked out, falling steadily throughout the day.
Economists flee the Trump administration
Economists within the Department of Agriculture published research which showed how Trump’s trade policies hurt American farmers. This research caused the economists to receive heavy criticism from the Trump administration, which eventually led to their departure from the administration.
Trump’s tariffs and the slumping stock market
Investors are nervous as Trump continues to threaten more tariffs on Chinese goods, The Dow dropped 500 points as Trump’s trade war with China continues to escalate.
Morgan Stanley says ‘dasvidaniya’ to Russia
The American investment bank Morgan Stanley is officially leaving Russia, closing banking operations during the first quarter of 2020. Russia’s actions in Ukraine led to heavy sanctions, which made it hard for a bank like Morgan Stanley to operate in Russia. Russia’s seizing of Ukrainian territory is still negatively impacting the country and will likely do so for years.
Trump’s economy roars the most where he’s liked the least
Large, mostly Democratic-leaning, cities are becoming increasingly dominant as a result of President Trump’s economic policies. Additionally, the smaller Republican rural districts are losing people at an alarming rate – a trend that doesn’t help Trump’s reelection chances.
Mike Pompeo: ‘Reductions in sea ice’ will open up trade opportunities
Secretary of State Mike Pompeo said Monday that the Arctic, a region that has been significantly impacted by climate change, presents “opportunity and abundance” when it comes to economy and trade.
Tom Wheeler: Fast technology vs. slow democracy
“By taking action to meet the problems of the industrial era…the nation’s leaders turned technology-driven challenges into American success stories. At the heart of such success was the creation of new public interest rules reflecting new business and technology realities. The resulting policies seem second nature to us today: antitrust enforcement, consumer protection, and worker protection. These new rules did not restructure the economy nor inhibit innovation, but they did put guardrails in place to temper the instinct to excess that is inherent in unsupervised capitalism. The result was unprecedented economic growth for all. Today, we need a similar reconsideration and restructuring of the rules of economic behavior.”
Dow takes a tumble, then rebounds, over trade
Trade war fears briefly returned to Wall Street, wiping out a chunk of the stock market’s recent surge. The Dow plunged 450 points at the open Monday morning after President Trump threatened to impose higher tariffs on China in a late Sunday tweet. The sudden escalation of U.S.-China trade tensions was unexpected, as Washington and Beijing were reportedly on the verge of a trade deal. By the end of the day, the market had rallied, closing 66 points down.
Trade deal threatened over Trump’s tariffs
GOP senators are concerned that President Trump’s USMCA trade deal will not pass Congress unless Trump takes steel tariffs off allies. Trump is a self-described “tariff man” and does not appear to be willing to back down from the tariffs.
Dow futures drop over tariff threat
A sharp sell-off is expected on Wall Street this week after President Trump said on Sunday that the U.S. will hike tariffs on goods imported from China, casting doubt on recent optimism that the world’s two largest economies were close to a resolution to their trade battle. Dow Jones Industrial Average futures implied an opening decline of more than 450 points Sunday evening stateside. S&P 500 and Nasdaq-100 Index futures also pointed to declines for the two indexes at Monday’s open.
Unemployment rate falls to the lowest since 1969
U.S. job growth surged in April and the unemployment rate dropped to an almost 50-year low of 3.6 percent. “Employment gains are strong enough to dispel any immediate concerns over the health of the economy, while wage gains are not strong enough to force the Federal Reserve’s hand to tighten the policy stance,” said Harm Bandholz, chief U.S. economist at UniCredit Research.
Trump shows Moore the door
In a tweet, President Trump said that Stephen Moore was withdrawing his name from consideration for a position on the Federal Reserve Board. This comes as a shock to many, including Moore who less than an hour before the tweet said that both he and the White House were “all in”. This all comes after the Senate signaled to the White House that Moore would not have the votes to be confirmed.
Trump calls his own infrastructure plan ‘stupid’
During a meeting with Democratic Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer, President Trump on Tuesday trashed his own administration’s infrastructure plan, blaming his former top economic adviser Gary Cohn for drafting a proposal that was “so stupid.”
Dana Milbank: For Trump it’s always infrastructure week
“Poof! There goes another Infrastructure Week. For more than two years, Trump has been trying to roll out a giant infrastructure plan, as he promised during the campaign. At every step, the idea has faltered…With those and other false starts, “Infrastructure Week” has become a euphemism for the erratic nature of Trump’s presidency, which is in constant crisis but rarely gets stuff done. “
Fed likely to ignore Trump’s call to cut interest rates
The U.S. Federal Reserve, leaning back against pressure from President Donald Trump to slash interest rates, is expected to leave borrowing costs unchanged on Wednesday as it maintains the same monetary policy stance amid strong economic growth.
Stephen needs Moore votes
Sen. Joni Ernst became the first Republican senator to go on record as a “no” on Donald Trump’s Fed pick Stephen Moore today. She said it’s “very unlikely that I would support that person,” and “several” senators agree with her. She also said she shared her views with the White House. Her assessment was affirmed by Republican Sen. Tim Scott, who said Moore’s best hope was to barely squeak by.
Trump’s betrayal of Gold Star families
Under Donald Trump’s new tax plan, Gold Star families saw death benefits, which they are entitled to receive, taxed at a much higher rate. The tax on the death benefits tripled to nearly 37%.
Sen Chuck Grassley: ‘Trump’s tariffs end or his trade deal dies’
“A significant roadblock is the administration’s tariffs on steel and aluminum and retaliatory Canadian and Mexican tariffs on U.S. products. These levies are a tax on Americans, and they jeopardize USMCA’s prospects of passage in the Mexican Congress, Canadian Parliament, and U.S. Congress… If these tariffs aren’t lifted, USMCA is dead. There is no appetite in Congress to debate USMCA with these tariffs in place.”
Trump’s OPEC problem
Donald Trump’s claims to be in constant contact with OPEC leadership over oil prices appear to be in doubt. It is reported that Trump has not spoken to anyone at OPEC headquarters despite his various claims to be negotiating lower prices.
Boeing says it’s making progress on software fix for Max planes
Boeing Chief Executive Dennis Muilenburg tried to bolster shareholder confidence in the company in his first general meeting since two fatal crashes of the 737 Max. He said the company is making steady progress to certify its grounded 737 Max jets with a software update and completed a final flight test prior to official certification.
Leaving nuclear treaty one of Iran’s ‘numerous choices’
Quitting a treaty designed to stop the spread of nuclear weapons is one of Iran’s “numerous choices” after the United States tightened sanctions on Tehran, Iranian Foreign Minister Mohammad Javad Zarif said on Sunday.
US makes historic renewable energy gains in April
For the first time in American history, the renewable energy sector in the U.S. is projected to produce more electricity than coal-fired plants. This historic milestone may signal that coal’s decline is only speeding up, despite efforts to keep the energy sector alive.
US sanctions Venezuela’s minister of foreign affairs
The Treasury Department sanctioned Venezuela’s foreign minister for allegedly exploiting the U.S. financial system to support what it considers the “illegitimate” regime of Nicolas Maduro. The move is aimed at increasing pressure on Maduro and senior officials in his government, which has been widely criticized for economic collapse and undermining democracy.
China’s green push
China’s Belt and Road Initiative must be green and sustainable, President Xi Jinping said in opening remarks at a summit on his grand strategy, adding that the massive infrastructure and trade plan would deliver “high-quality” growth for all.