Live US Economy and Stock Market Updates: Stocks Fall as Stimulus Hopes Dim Further - The New York Times | Canada News Media
Connect with us

Economy

Live US Economy and Stock Market Updates: Stocks Fall as Stimulus Hopes Dim Further – The New York Times

Published

 on


Credit…Patrick Semansky/Pool, via Reuters

Treasury Secretary Steven Mnuchin said on Wednesday that he did not expect an economic relief package to be enacted before the Nov. 3 election as he and Speaker Nancy Pelosi of California have continued to struggle to reach an agreement on a broad package to support the economy.

Negotiators on Wednesday resumed discussions over a coronavirus relief package, even though Democrats and Republicans remain wildly divided over the scope and size of another stimulus bill.

Speaking at a Milken Institute conference on Wednesday, Mr. Mnuchin said that his conversation with Ms. Pelosi was “comprehensive” but indicated that important differences remained. He said that it was unlikely that a deal could be reached an enacted before the election.

“At this point, getting something done before the election and executing on that will be difficult,” Mr. Mnuchin said.

Ms. Pelosi and Mr. Mnuchin spoke on Wednesday for about an hour, discussing the language of the administration’s latest $1.8 trillion framework as compared to House Democrats’ $2.2 trillion stimulus plan, which Ms. Pelosi pushed through the House earlier this month.

They agreed to speak again on Thursday.

“One major area of disagreement continues to be that the White House lacks an understanding of the need for a national strategic testing plan,” Drew Hammill, a spokesman for Ms. Pelosi, said on Twitter. “The Speaker believes we must reopen our economy & schools safely & soon, & scientists agree we must have a strategic testing plan.”

The Treasury secretary suggested that the gap on the top-line cost of the bill were not that wide, but that the differences on the policies within a package remained significant. He said that the White House had already made big compromises on funding for state and local governments and that Republicans continued to want liability protections for businesses that were seeking to reopen during the pandemic.

“We continue to make progress on certain issues, on certain issues we continue to be far apart,” he said.

Mr. Mnuchin criticized Democrats for insisting on a comprehensive bill and not passing smaller bills on areas where the two sides agreed. He said that people and businesses needed immediate assistance and estimated that there was $300 billion unused relief money that could be repurposed with Congressional approval.

“Let’s not wait for the big bang and everything being perfect,” he said.

President Trump has pushed negotiators to “go big!!!” days after abruptly ending talks, but Senate Republicans remain reluctant to accept a broad sweeping bill, citing concerns about the cost of such a package after approving nearly $3 trillion in legislation earlier this year.

Senator Mitch McConnell of Kentucky, the majority leader, has said he plans to have the Senate vote to advance a scaled-back bill that would amount to a fraction of the $2.2 trillion bill Ms. Pelosi has demanded, but that is unlikely to pass without the Democratic support needed to clear the 60-vote threshold.

  • Wall Street dropped on Wednesday, turning lower after a quiet start to the day after Treasury Secretary Steven Mnuchin said it was unlikely that the White House and Democrats would be able to reach a deal on a new economic aid package before the election.

  • The S&P fell by about half a percent, a relatively small decline that reflects the fact that investors had already stopped expecting an agreement anytime soon. Still, the slide came immediately after Mr. Mnuchin made his comments at a Milken Institute conference.

  • “At this point, getting something done before the election and executing on that will be difficult,” Mr. Mnuchin said.

  • Investors have been regrouping this week after stocks surged in the first two weeks of October, in part on hopes that a stimulus deal would come together. Investors are also wary of the upcoming election — and the uncertainty that might follow a close race.

  • Also drawing investors’ attention are earnings reports from companies that offer a glimpse of how they are handling the economic slump caused by the coronavirus pandemic. Among the companies to report their results on Wednesday, Goldman Sachs rose slightly after reporting a jump in revenue from its trading business. Wells Fargo and Bank of America were both sharply lower after their results.

  • Pilgrim’s Pride, the giant U.S. poultry producer, jumped in early trading after it said it would pay more than $110 million to settle federal charges it helped fix prices on chicken. In June, the company’s chief executive and three other current and former executives at companies that supply chicken to groceries and restaurants across the United States were indicted on a price-fixing charge.

    .

Credit…Alexander Drago/Reuters

President Trump on Wednesday talked up his pre-pandemic economic record and painted a dark picture of the economy if Democrats win November’s election, suggesting he would return the U.S. back to strength in a second term.

Mr. Trump, who has accused state and local governments of holding back the recovery by restricting business activity, also argued that young and healthy people should get back to work.

In webcast remarks before the Economic Club of New York, along with clubs in Chicago, Pittsburgh, Washington, Florida and Sheboygan, Wisc., Mr. Trump warned of “crippling poverty” and a “steep depression” under Democrats, who he said would usher in “very high taxes.”

Mr. Trump’s comments come as his campaign tries to renew focus on economic issues, where the president has outpolled his Democratic rival, Joseph R. Biden Jr., despite trailing in national head-to-head matchups overall. Even after the nation’s plunge into recession amid the spreading pandemic this spring, voters continue to give Mr. Trump higher marks on the economy than any other major issue.

In his speech, the president offered a preview — but few details — of the economic policies he would pursue in a second term, should he win one. He vowed to cut taxes for the middle class, echoing a promise he made before the 2018 midterm elections, after which he did not propose a new middle-class tax cut plan. He threatened to impose tariffs on companies that move activity abroad from the United States and bar those companies from receiving federal contracts.

Part of Mr. Trump’s enduring appeal on economic issues has been his relentless cheerleading of his own performance, which he continued in the speech, often exaggerating his achievements or claiming results that are not actually true.

Mr. Trump said the administration and Congress’ economic response to the pandemic crisis had helped to fuel a rapid rebound.

While it is true that jobs have returned rapidly, the rebound has happened so quickly in large part because employers cut jobs swiftly — and temporarily — amid widespread state and local lockdowns early in the pandemic. Only about half of the 22 million jobs slashed between February and April have returned.

The unemployment rate, which declined to 7.9 percent from 14.7 percent in April, has fallen faster than most analysts had forecast. But economists warn that the improvement could slow, especially as job losses increasingly turn permanent. S&P Global economists warned on Wednesday that the unemployment rate will not reach pre-pandemic levels until 2024.

Credit…Jeenah Moon for The New York Times

Goldman Sachs had a significantly more profitable quarter than expected, lifted by continued strength in the trading of stocks and bonds and gains from certain investments.

The bank reported earnings of $3.62 billion, far higher than Wall Street analysts had projected, and revenue of $10.78 billion for the third quarter.

At a time when the markets were particularly active, Goldman continued its winning streak in trading, with significant gains from handling bond products tied to interest rates, mortgages, corporate credit and commodity prices, which together drove bond division revenue up 49 percent from the same period last year. Stock trading revenue was also higher, but by a less substantial margin.

Revenue in the firm’s asset-management division was up 71 percent, driven by investments in stocks held by Goldman.

Company shares rose nearly 4 percent in early trading.

Bank of America earned $4.9 billion in the third quarter, up from $3.5 billion in the second quarter, but down from $5.8 billion in the same period a year ago.

Revenue fell 11 percent from a year ago, to $20.3 billion.

The bank’s quarterly provision for credit losses was smaller than the previous quarter, at $1.4 billion in the third quarter, compared with $5.1 billion. The bank said it was expecting fewer losses in its consumer loans, but more in its commercial loans, particularly in industries hit hard by the coronavirus pandemic such as travel and entertainment.

Third-quarter earnings for Wells Fargo were $2 billion on revenue of $18.9 billion.

The bank’s earnings were affected by the cost of a round of layoffs — $718 million. Another expense the bank faced in the third quarter: nearly $1 billion trying to help customers struggling to repay their loans come up with new payment plans to keep them from defaulting.

Both Bank of America and Wells said robust activity on Wall Street helped strengthen their earnings.

Credit…Jason Henry for The New York Times

A group of tech, finance, media and other executives are calling on Americans to stay cool during a heated election season. “The health of our economy and markets depends on the strength of our democracy,” the LinkedIn co-founder Reid Hoffman said in a statement signed by more than 50 business leaders, published first in Wednesday’s DealBook newsletter.

The group, convened by the Leadership Now Project, also includes Eddie Fishman, the chief operating officer of D.E. Shaw; Seth Klarman, the chief executive of Baupost Group; Lisa Lewin, the chief executive of General Assembly; Marissa Mayer, the former Yahoo and Google executive; and Alan Patricof, the founder of Apax and Greycroft.

The executives expressed support for three principles:

“America has successfully held elections through previous challenges, like the Civil War, World Wars I and II, and the 1918 flu pandemic,” the statement concludes. “Now, it is our turn.”

The statement is a testament to the times. “Nothing about 2020 is usual,” said Michael Porter of Harvard Business School, who advises the Leadership Now Project. He said there was “an essential role for business in addressing political dysfunction,” citing recent data showing that political gridlock is causing a “disastrous decline” in the United States’ competitiveness.

A contested election is a big worry for business. If recent market moves are any indication, businesses are making peace with the possibility of higher taxes under a Biden administration as a trade-off for a definitive election result. Some Wall Street advisers have been preparing clients for the possibility of a contested election, as President Trump repeatedly casts doubt on mail-in ballots and is noncommittal on what he will do if he loses the vote.

That’s why some executives, like the group putting their names to the Leadership Now missive, may feel the need to state what was once obvious.

Credit…Tom Jamieson for The New York Times

For some companies, the only response to the pandemic has been to hunker down and try to avoid running out of cash before their customers can return.

Pret, the 37-year-old British sandwich and coffee chain that’s ubiquitous in central London, is now clearly willing to try anything, Eshe Nelson reports:

  • Pret wants to sell its food in supermarkets, and has already begun selling coffee beans on Amazon.com.

  • It has signed up to all the major food delivery platforms to bring its sandwiches, soups and salads to its work-from-home customers.

  • It opened a so-called dark kitchen in North London to prepare its food strictly for delivery, modeled on the success of Sweetgreen and Shake Shack, and hopes to open another dark kitchen in either New York or New Jersey soon.

  • It is devising a special menu of hot evening meals for delivery, such as a Chipotle Chicken Burrito Bowl​.

  • And then there is the coffee subscription, an effort to drive people back to the stores: Five drinks a day made by a barista (coffees, teas and smoothies) for £20 a month. On the face of it, it could be an extraordinarily good deal. With two lattes a week, a subscriber will break even. And the first month is free. (Small print: You can’t order five drinks at once — there must be 30 minutes between each drink order.)

Credit…Gabriela Bhaskar for The New York Times

Starbucks announced new commitments to inclusion, diversity and equity on Wednesday, following up on pledges the company made to fight racism in June after the killing of George Floyd in police custody.

The company said it would achieve representation of Black, Indigenous and people of color of at least 30 percent at all corporate levels and at least 40 percent at all retail and manufacturing roles by 2025. Starbucks also released diversity data that showed that its work force is 69 percent female and 47 percent Black, Indigenous and people of color.

The coffee chain also said it would incorporate “measurements focused on building inclusive and diverse teams” into executive compensation programs starting in 2021.

In 2018, two African-American men were arrested at a Starbucks in Philadelphia, leading the company to apologize in full-page newspaper ads and to require companywide anti-bias training.

Let’s block ads! (Why?)



Source link

Continue Reading

Economy

Minimum wage to hire higher-paid temporary foreign workers set to increase

Published

 on

 

OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

Published

 on

 

OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.

However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.

The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.

Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.

The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.

The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.

This report by The Canadian Press was first published Oct. 17, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Economy

Statistics Canada says levels of food insecurity rose in 2022

Published

 on

 

OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.

In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.

The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.

Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.

In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.

It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.

This report by The Canadian Press was first published Oct 16, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version