Taxes? Trade? How Trump could affect key areas of economy
Donald Trump won the presidency by pledging to restore a vanished and golden economic era, when growth roared, factory jobs flourished and America sat unchallenged atop the global economy.
Trump has said he’d slash taxes, strong-arm U.S. trading partners, end commitments to environmental rules and make it easier to drill for oil.
He’d lift federal regulations, void President Barack Obama’s health care law and curb immigration. And, of course, build a wall on the Southern border — and force Mexico to pay for it.
Those steps, Trump says, would turbocharge the economy. Yet many economists warn that his plans could spike the national debt, ignite trade wars and perhaps cause a recession.
The economy that Trump inherits: Durable but sluggish
WASHINGTON (AP) — Donald Trump inherits a much sturdier economy than the one Barack Obama carried into his second term four years ago. Back then, the scars of the Great Recession were still fresh. Joblessness was near 8 per cent. Pay was flat. Europe faced a grave debt crisis that threatened to spread across the Atlantic.
Now? The job market, with steady hiring and just 4.9 per cent unemployment, has proved durable. Pay is finally accelerating. Auto sales are near a record pace. Housing is stronger. Europe’s financial plight has stabilized.
Yet the economy’s long-standing shift toward workers with college degrees left people without them stuck with dimmer job opportunities and stagnant wages — a trend for which Trump blamed trade deals that he said led manufacturers to move overseas. The Americans who elected Trump are longing not just for change but for a reversal of the Obama era — one that will ignite growth, slash taxes, restore lost factory jobs and curb most federal regulations.
Problem is, the economy’s most vexing problems — from an aging workforce to listless productivity to weak corporate spending — defy quick fixes. Trump has pledged an economic renaissance yet has avoided the broad policy prescriptions widely seen as necessary for managing a government.
US stocks mixed overall as Dow sets record high; oil slumps
Banks and other financial companies led U.S. stocks mostly higher Thursday, propelling the Dow Jones industrial average to a record high.
The Standard & Poor’s 500 index, a broader measure of the stock market, also eked out a gain, adding to a big rally the day before following Donald Trump’s presidential election victory. The Nasdaq composite closed lower, weighed down by a slide in technology companies. Bond prices slumped again, sending yields higher.
Investors flee emerging markets after Trump victory
NEW YORK (AP) — Investing in Mexico, China and other emerging markets has never been for the fainthearted. Big swings have been a hallmark, caused by everything from the 1994 “tequila crisis” where Mexico devalued the peso to Russia’s default on its debt in 1998.
Here’s the latest addition to the list: Donald Trump’s victory on Tuesday, which some analysts are calling an “orange swan” event for emerging markets. Trump’s election was unexpected, and investors were unprepared for it — the kind of event that economists liken to seeing a black swan for the first time — and it has caused stock markets to tumble from Mexico City to Seoul. As investors try to piece together what a Trump presidency will mean for stocks, a growing consensus is that emerging markets will be some of the biggest losers, at least in the short term.
Funds devoted to emerging market-stocks tumbled after the election, even while stocks in the United States were surging.
Applications for US unemployment aid fall from 3-month high
WASHINGTON (AP) — Fewer Americans sought unemployment aid last week, the latest sign that companies are holding onto their workers.
The Labor Department said Thursday that weekly applications for jobless benefits fell 11,000 to a seasonally adjusted 254,000. That’s down from a three-month high in the previous week. The four-week average, a less volatile measure, ticked up 1,750 to 259,750. Just over 2 million people are receiving unemployment aid, up 18,000 from the previous week.
Applications, which are a proxy for layoffs, have remained below 300,000 for 88 straight weeks, the longest streak since 1970.
Average US 30-year mortgage rate rises to 3.57 per cent
WASHINGTON (AP) — Long-term U.S. mortgage rates rose this week for a second straight week.
Mortgage giant Freddie Mac said Thursday the average for a 30-year fixed-rate mortgage increased to 3.57 per cent from 3.54 per cent last week. Rates remain near historically low levels, however. The benchmark 30-year rate is down from 3.98 per cent a year ago. Its all-time low was 3.31 per cent in November 2012.
The rates reflect the mortgage market in the week prior to Republican nominee Donald Trump’s election as president. On Wednesday, the day the result became known, bond prices fell sharply. That sent yields higher.
Macy’s says clothing sales strong, gives better outlook
NEW YORK (AP) — Macy’s raised its sales outlook for the year after it said business improved in the third quarter, and cited stronger clothing sales that spanned the men’s, women’s and children’s sections.
The department store chain also said it struck a deal with a real-estate investor that involves redeveloping some properties. That sent its shares up more than 5 per cent Thursday. Still, the company’s third-quarter earnings missed Wall Street expectations and a key revenue measure fell for a seventh straight quarter.
Macy’s had been a stellar performer after the recession but has seen sales growth slow in the past year and a half as it and other traditional department store chains face competition from online and off-price rivals. Kohl’s shares also rose Thursday as the company reported better-than-expected profit as it controlled its inventory — but sales fell.
Disney embraces streaming as ratings sag
NEW YORK (AP) — As more and more people get their favourite TV shows and movies online, Disney is also learning to embrace the stream.
The Walt Disney Co. once resisted offering channels like ESPN directly over the internet, preferring old-fashioned cable subscriptions. Its investors are fretting over ratings as more people cut the cord and cancel cable or satellite service. NFL game viewership is also down, and the contentious election drew viewers away from Disney networks like ABC to cable news networks.
Disney stock was down 9.6 per cent for the year, at Thursday’s closing. And a weaker-than-expected earnings report, which showed a drop in ESPN revenue, drove shares down in extended trading.
But Disney, which owns Marvel, Star Wars and its own Pixar and Disney Studios, is forging ahead with new streaming deals involving Netflix, Hulu and others.
FCC concerned about AT&T exempting DirecTV from data caps
NEW YORK (AP) — Federal regulators say that they are concerned that AT&T’s exempting its DirecTV unit from cellphone data caps could hurt competition.
AT&T lets customers watch video on DirecTV apps on their AT&T cellphones without eating into monthly data allotments. It’s expected to do the same with an upcoming, $35-a-month TV streaming service called DirecTV Now.
The Federal Communications Commission, in a letter to AT&T dated Wednesday, said that practice may disadvantage video providers that aren’t owned by AT&T, ultimately hurting consumers. The agency asked that AT&T reply to its concerns by Nov. 21.
GM may find jobs for laid-off workers at other factories
DETROIT (AP) — The head of the United Auto Workers union says about 2,000 General Motors factory workers who face layoff in January could be placed at other company factories.
GM announced Wednesday it would indefinitely lay off third-shift workers at two car factories in Ohio and Michigan due to falling demand. But there may be more jobs available at truck and SUV factories where sales are growing.
GM confirmed it’s talking to the union about jobs for laid-off workers but says nothing is finalized.
The Dow climbed 218.19 points, or 1.2 per cent, to 18,807.88. The S&P 500 index added 4.22 points, or 0.2 per cent, to 2,167.48. The tech-heavy Nasdaq lost 42.28 points, or 0.8 per cent, to 5,208.80.
Benchmark U.S. crude fell 61 cents, or 1.3 per cent, to close at $44.66 a barrel in New York. Brent crude, used to price international oils, lost 52 cents, or 1.1 per cent, to close at $45.84 a barrel in London. Wholesale gasoline slid 2 cents to $1.34 a gallon. Heating oil fell a penny to $1.44 a gallon. Natural gas lost 6 cents, or 2.2 per cent, to $2.63 per 1,000 cubic feet.