The advice from financial pros: Don’t panic over Fed hike
Wealth advisers have one word of advice for clients who worry about the potential impact of the Federal Reserve’s first interest-rate increase in nine years: Relax.
Financial pros have been counselling clients that returns on stocks, bonds and other investments aren’t necessarily destined to suffer because of a modest Fed hike.
Investment returns hinge on many factors beyond a Fed rate increase — especially because the Fed stressed that its pace of increases will be gradual and that rates will likely stay historically low in the near future. And rates on mortgages and other loans likely won’t jump right away.
Exec who jacked up price of a lifesaving drug is arrested
NEW YORK (AP) — A boyish-looking entrepreneur who became the new face of corporate greed when he jacked up the price of a lifesaving drug fiftyfold was led away in handcuffs by the FBI on unrelated fraud charges Thursday in a scene that left more than a few Americans positively gleeful.
Martin Shkreli, a 32-year-old former hedge fund manager and relentless self-promoter who has called himself “the world’s most eligible bachelor” on Twitter, was arrested in a drab grey hoodie and taken into federal court in Brooklyn, where he pleaded not guilty. He was released on $5 million bail.
If convicted, he could get up to 20 years in prison. He left court without saying anything to reporters. His attorneys had no immediate comment.
US rate hike ends wait, but not uncertainty for Asia
TOKYO (AP) — The Federal Reserve’s rate hike was welcomed in Asia as a sign of strength in the U.S., one of the region’s biggest export markets. But it could complicate Chinese efforts to avoid a sharper economic slowdown and keep the yuan steady.
The U.S. central bank on Wednesday raised the Federal Funds Rate by a quarter percentage point, the first such increase in nearly a decade. The decision ended a long period of uncertainty about when the Fed would begin winding down the easy money deployed to help heal the economic damage of the 2008 financial crisis.
Asian stocks rose Thursday and some currencies weakened moderately against the U.S. dollar. Investors welcomed the Fed’s signal that interest rate increases will be gradual.
US-Cuba aviation deal allows 110 scheduled flights a day
HAVANA (AP) — The United States and Cuba have struck a deal to allow as many as 110 regular airline flights a day, allowing a surge of American travel to Cuba that could eventually flood the island with hundreds of thousands more U.S. visitors a year, officials said Thursday on the anniversary of detente between the Cold War foes.
While it will likely take months before the first commercial flight to Havana, the reestablishment of regular aviation to Cuba after half a century will almost certainly be the biggest business development since the two countries began normalizing relations last year.
Fewer Americans filed for unemployment aid last week
WASHINGTON (AP) — Fewer Americans applied for unemployment claims last week, another sign of strength in the job market.
Weekly applications for unemployment benefits fell 11,000 last week to a seasonally adjusted 271,000, the Labor Department said Thursday. The less volatile 4-week average was essentially unchanged at 271,000.
The numbers show that most American workers are enjoying job security.
Average US rate on 30-year mortgages rises to 3.97 per cent
WASHINGTON (AP) — Average long-term U.S. mortgage rates rose slightly this week in the days before the Federal Reserve announced a historic increase in its key short-term interest rate.
Mortgage buyer Freddie Mac said Thursday the average rate on a 30-year fixed-rate mortgage edged up to 3.97 per cent from 3.95 per cent a week earlier. The average rate on 15-year fixed-rate mortgages increased to 3.22 per cent from 3.19 per cent.
Despite lack of eggs, Just Mayo says it’s keeping its name
NEW YORK (AP) — Just Mayo says it will get to keep its name, a decision that caps a rollercoaster year for the vegan spread that has rattled the egg industry.
After months of discussions, Just Mayo’s maker Hampton Creek says it worked out an agreement with the Food and Drug Administration that lets the eggless spread keep its name, as long as a few changes are made to its label. The resolution comes after the FDA sent a warning letter to Hampton Creek in August saying Just Mayo was misbranded because mayonnaise is defined as having eggs.
Without providing details, the FDA said in statement it worked with Hampton Creek to address the issues cited in its letter, and that it considers the matter to be resolved.
China Southern Airlines orders 110 Boeing jets worth $10B
HONG KONG (AP) — China’s biggest airline said Thursday it’s buying more than a hundred Boeing 737 jets in a deal worth about $10 billion that comes just months after the U.S. plane maker announced plans to build a Chinese finishing plant for the aircraft type.
China Southern Airlines is buying 30 Boeing 737 Next Generation jets and 50 737 Max aircraft, the company said in a statement to the Hong Kong stock exchange. Its Xiamen Airlines unit is buying 30 of Boeing’s 737 Max jets.
The Next Generation planes have a list price of $81.2 million while the Max series aircraft sells for $96.1 million.
Cerberus taking a majority stake in Avon N. American unit
NEW YORK (AP) — Private investment firm Cerberus Capital Management is taking a majority stake in Avon’s North American division.
The companies said that they believe the partnership will help to improve Avon’s performance and boost shareholder value.
Cerberus will get an 80.1 per cent interest in Avon North America in exchange for a $170 million equity investment. The North American unit will be separated from Avon Products Inc. into a privately-held company that will include the U.S., Canada and Puerto Rico. It will be managed by New York-based Cerberus.
Apple names Jeff Williams as chief operating officer
Apple named Jeff Williams as its chief operating officer Thursday, a job that hasn’t been filled since Tim Cook left the position more than four years ago to become CEO.
Williams has worked at Apple for about 17 years and supervised the launch of the Apple Watch, which went on sale earlier this year. The company said he played a “key role” in the launch of the iPhone.
Employers applaud ‘Cadillac’ tax delay but still seek repeal
Congress delivered an early holiday present to employers this week when it proposed a two-year delay for a health benefits tax many would have had to pay starting in 2018. But businesses hope Santa will eventually leave something better under the tree.
The delay, which was reached as part of a budget deal, means companies that offer employees expensive health insurance will not have to pay the so-called Cadillac tax for those plans until 2020. But employers want the tax, which amounts to a 40 per cent levy on the cost of benefits plans above a certain amount, repealed altogether.
The Dow Jones industrial average fell 253.25 points, or 1.4 per cent, to 17,495.84. The Standard & Poor’s 500 index lost 31.18 points, or 1.5 per cent, to 2,041.89. The Nasdaq composite declined 68.58 points, or 1.4 per cent, to 5,002.55.
U.S. crude fell 57 cents, or 1.6 per cent, to $34.95 a barrel in New York. Brent crude, a benchmark for international oils, fell 33 cents, or 0.9 per cent, to $37.06 a barrel in London. The price of wholesale gasoline rose 2.9 cents, or 2.3 per cent, to $1.262 a gallon in New York. Heating oil slipped 0.7 cents to $1.105 a gallon. Natural gas, which has fallen to 16-year lows, gave up another 3.5 cents, or 2 per cent, to $1.755 per 1,000 cubic feet.