President Donald Trump ended talks with Democratic leaders on a new stimulus package, hours after Federal Reserve Chair Jerome Powell’s strongest call yet for greater spending to avoid damaging the economic recovery.
“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump said Tuesday in a tweet.
…request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business. I have asked…
Stocks tumbled after Trump’s posting called an end to months of hard-fought negotiations between the administration and Congress. Democrats had most recently pushed a US$2.2 trillion package that failed to garner Republican support in the House, while the White House had endorsed US$1.6 trillion.
The S&P 500 Index closed down about 1.4 per cent, after having risen earlier in the day in the wake of Powell’s mounting pressure on policy makers to act.
House Speaker Nancy Pelosi continued to insist on US$2 trillion or more in stimulus, according to a Republican familiar with the negotiations, while the GOP lacked votes for such a large package.
The legislation that the House passed last week with only Democratic support also had measures opposed by Republicans, including government-funded health coverage for abortions and stimulus checks for undocumented immigrants.
Pelosi repeatedly invoked the Fed chair in her calls for Republicans to move toward the Democrats’ more comprehensive bill. Some recent economic data, along with a resurgence in coronavirus counts in some states, also suggested to many analysts that government assistance was becoming more pressing.
“Even if policy actions ultimately prove to be greater than needed, they will not go to waste,” Powell told a virtual conference hosted by the National Association for Business Economics Tuesday morning. “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.”
Pelosi said in a statement, “Clearly, the White House is in complete disarray.” The speaker said, “Walking away from coronavirus talks demonstrates that President Trump is unwilling to crush the virus, as is required by the Heroes Act.”
The speaker and Treasury Secretary Steven Mnuchin, who had sat down in person for negotiations last week for the first time since August, spoke at 3:30 p.m. Tuesday and the secretary confirmed that the talks had been halted, according to Drew Hammill, Pelosi’s spokesman.
Nancy Pelosi is asking for US$2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of US$1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their…
— Donald J. Trump (@realDonaldTrump) October 6, 2020
Pelosi remarked to Democratic lawmakers on a call that Trump’s thinking might be affected by steroids he’s taken to treat his coronavirus infection.
A day after returning to the White House from Walter Reed National Military Medical Center, Trump conferred by telephone with Senate Majority Leader Mitch McConnell and House Republican leader Kevin McCarthy, along with Mnuchin, before his tweets put an end to talks for now.
Pelosi earlier told her Democratic colleagues that she and Mnuchin disagreed on assistance to state and local authorities, spending to address the coronavirus and getting aid to ordinary Americans remain, according to a House official.
Trump has disparaged Democrats’ push for almost US$1 trillion in assistance to state and local authorities as a hand-out to poorly run, mainly Democratic states. The Democrats cut that amount in half in their latest offer.
But on Saturday he said that the country “wants and needs” another round of relief. “Work together and get it done,” he tweeted from Walter Reed.
State Aid
Even so, the Fed chief in his remarks Tuesday highlighted that analysis after the Great Recession a decade ago showed that tight budgets at the state and local level had held back the economic recovery.
“Nancy Pelosi is asking for US$2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19,” Trump said in his tweets Tuesday. “We made a very generous offer of US$1.6 Trillion Dollars and, as usual, she is not negotiating in good faith.”
McConnell has been clear publicly that Senate Republicans weren’t interested in a bill with a US$2.2 trillion price tag, and also opposed a bailout for state and local governments. His caucus favored a bill offering US$650 billion in aid last month that was blocked by Democrats as insufficient.
The consequences of the withdrawal of federal fiscal support are tangible and immediate. American Airlines Group Inc. and United Airlines Holdings Inc. said they would start laying off 32,000 workers, blaming expiring government aid. Walt Disney Co. is slashing 28,000 jobs while Allstate Corp., the fourth-largest U.S. car insurer, is cutting 3,800, roughly 8 per cent of its workforce.
Americans’ incomes fell by 2.7 per cent in August as supplemental insurance benefits from the first round of stimulus expired, threatening to sap consumer spending.
“The economy has been moving more or less sideways since mid-summer,” Mark Zandi, chief economist for Moody’s Analytics, said in a recent note to clients. With prospects fading for more federal relief, “odds that the recovery will come undone are rising.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
