Economics And Business
The Economics and Business Section of IR Insider publishes breaking news reports and analysis regarding developments relating to the U.S. Economy. Topics covered in the Science and Technology Section may include the U.S. national debt, changes in policies affecting interest rates, inflation, and unemployment rates. Updates on U.S. foreign trade, international trade, transnational trade deals, and ratification of economic treaties and sanctions may be further addressed. Additionally, news and data on world financial markets and leading banking institutions will be discussed. Our writers Shraman Sen, Angie Lin, Audrey Ren produce weekly. Our section editor is Ritika Pathak.
Tuesday’s midterm election results have shown that Democrats will take control of the House of Representatives for the first time since 2010, while the Senate will maintain a Republican majority. What could this combination of a Republican President and a split Congress mean for the economy? Main areas of reconsideration include infrastructure, healthcare, the minimum wage, and tax cuts.
President Trump signed the "Tax Cuts and Jobs Act" into law on Dec. 22., 2017, bringing sweeping changes to the tax code. Generous incentives in the Trump tax are meant to persuade people to work through business challenges, but financial advisers now have a new way to deliver impact investing to wealthy clients — one that comes with substantial tax benefits — according to the fledgling federal tax law.
On Friday, chain store retailer Five Below Inc. opened its newest location in Manhattan. Its first outpost in New York City spans 11,000 square feet and is located on Fifth Avenue, between 44th and 45th Streets. Five Below has opened 67 new stores in 2018 so far and plans to reach 750 by the end of the year, almost quadrupling the number of stores since its initial public offering in 2012.
Goldman Sachs forecasts the yuan reaching 7.1 against the dollar in the next six months, breaching the psychologically important barrier of 7. MK Tang, a senior China economist at Goldman in Hong Kong, said that "we see good economic reasons arguing for a weaker yuan, especially in the coming months," Tang said. "It’s only a matter of time for the yuan to hit 7."
On Tuesday, Italy’s 2019 fiscal budget was rejected by the European Union Commission. The European Union Commission’s vice president, Valdis Dombrovskis, stated that rejecting the budget plan was the only viable option they had. The budget goes against the requirements of the Stability and Growth Pact, which is essentially a set of rules and regulations established to ensure countries part of the European Union are making financially safe decisions and are properly coordinating their respective fiscal policies.
Automotive company Tesla Inc. reported its surprising third-quarter earnings of $311.5 million, its first profit in two years and its third quarterly profit ever. The automaker earned $22 million in the third quarter of 2016 and $11.2 million in the first quarter of 2013 and has yet to report an annual profit.
The European Union has sent the Italian budget back to Rome with a failing grade, the first time such a request will have been made of an EU member state. The Commission is worried about the impact of higher spending on already high levels of debt in Italy, the eurozone's third-biggest economy and Italy will have to back down or face fines.
Despite the uproar which followed the demise of journalist Jamal Khashoggi, the investment conference (named the Future Investment Initiative) at Saudi Arabia still took place and was attended by international leaders. Prime Minister Imran Khan, chairman of Pakistan’s Tehreek-e-Insaf, was one of the invited speakers. Khan did not shy away from delineating grave economic crises which the country has encountered.
Walmart Inc. has reached an agreement with Hollywood studio Metro-Goldwyn-Mayer in which MGM will create original video shorts to stream on Vudu, an on-demand streaming service that Walmart bought in 2010. This deal is an attempt by Walmart to push its way into the online entertainment industry and to compete with rivals such as Amazon Prime Video, Netflix, and Hulu.
Last Thursday, the Dow Jones and S&P 500 — two barometers for how well the US stock market is doing — dropped by more than 2 percent. The US share market, indeed, has begun its worryingly decline that the Dow dropped more than 800 points in one of the worst sell-offs since Feb. as investors worried that sharply rising interest rates would constrain the nation’s historic economic expansion.
President Donald Trump’s distaste for China’s economic schema is not recent news. Ever since his presidential campaign in 2016, President Trump did not shy away from criticizing the Asian country’s economy. However, the situation is becoming more grave as the economic ties between the US and China seem to have encountered a dead end.
In a joint press conference in Tokyo on Thursday, Toyota Motor Corp. and SoftBank Group Corp. announced a venture in which the two companies will work together to develop self-driving technology. The $17.5 million joint venture is expected to be formed by the end of March, with 50.25% owned by SoftBank and 49.75% owned by Toyota. The new company Monet Technologies Corp., short for “mobility network,” will use driverless-car technology to offer services such as ride-hailing, meal delivery with food prepared en-route, hospital shuttles with on-board medical examination services, mobile offices, and mobile convenience stores by the late 2020s.
Infrastructure Leasing and Financial Services (IL&FS), one of India’s significant non-banking financial institutions, has recently defaulted on its assets worth almost $13 billion sparking concerns over India’s financial market.
A 109-year-old corporation operating in 150 countries, L’Oréal is the world’s largest cosmetics company with €4.68 billion operating profit in 2017. The company’s leading diverse product portfolio has ensured its continued growth in the €200 billion worldwide cosmetics market. Since it was founded over a century ago, global acquisitions and subsidiaries are a fundamental part of L’Oréal’s strategy, allowing it to reach horizontal and vertical integration to increase market shares, product offerings, and distribution channels.
The United States Federal Reserve recently evinced contractionary monetary policy, by increasing the target interest rate by 25 basis points. The revised range for the target interest rate is now 2 percent-2.25 percent. There are two sides to the argument on whether the Fed should persist with such a contractionary move, which is likely to be repeated prior to the conclusion of this year. While the Chair of the Fed supports this move, others are worried about the potential decline in investment.
The month of Aug. has witnessed a tremendous depreciation of Turkey’s currency, the lira. To be precise, the lira has lost more than 34 percent of its value against the dollar. In an effort to combat this downward spiral, Turkey’s central bank bolstered interest rates to a staggering 24 percent. Economic theory proves that high-interest rates lure foreign investment which in turn increases the demand and value of the domestic currency. The gain in value, however, was minimal as the lira is still 38 percent down percent down against the dollar.
About ten years ago, due to rising fuel costs, U.S. airlines began charging passengers to check baggage in. Since then, airlines have also started charging fees for seat selection, early boarding, flight changes and cancellations, among other services.
This past Wednesday Apple held its annual product showcase at the Steve Jobs Theater in Cupertino, CA. New products discussed at the showcase included three new iPhones - the iPhone XR, the iPhone XS, and the iPhone XS Max - as well as an updated version of the Apple Watch, the Apple Watch Series 4.
Once spreading across the globe with command-and-conquer rapaciousness, Uber, in recent years, is on the journey of executing broad retrenchment in Asia’s major ride-hailing markets. After being bailed out in Russia in 2017 and selling off its operations in China in 2016, the ride-hailing startup announced that it has sold its business in eight countries across Southeast Asia to Grab, a rival based in Singapore.
In just two years, Noticias Aguila (News Eagle) has accumulated over 20 million users and in 2017 rose to the top of Google Play’s Mexico store. The founder, Tang Xin, simply watched the success from afar with his development team based in Shenzen, China.
Whether the eggs handed out this past Easter Sunday were tri-coloured, deviled, hard-boiled or plastic, they signified the big bucks paid each year to maintain the tradition of backyard Easter egg hunts.
As technology becomes increasingly used in every aspect of our world today, fashion brands are moving to join the trend as well. Most clothing retail stores have websites that customers can order new items from to be delivered or to be picked up in store. However, Zara is taking it one step further by utilizing robots in its stores to speed up the process of customers collecting orders. A third of Zara’s global online sales are now being collected in person; however, queues build up quickly in some cities due to the wait time needed for store attendants to find and hand out packages to everyone. That’s why earlier this year, Zara announced its plan to introduce robots into stores to help customers retrieve their online orders.
The Indian classical system of music shares many similarities with its Middle Eastern counterpart, and maritime trade also prospered between the two regions as Arabic sailors frequently transported goods from the Middle East to India in exchange for spices and other trademark Indian commodities.
As online media becomes more and more prominent, and traditional television spirals downward, news networks are beginning to follow the trend in hopes of reaching more people through the Internet. By the end of the year, Fox News is expected to launch its online streaming service, Fox Nation.
Indian lenders have been grappling with rising bad loans and insufficient capital for years. However, after the 1.3 trillion bailout from the government and the introduction of a new bankruptcy law that protects them from recalcitrant borrowers, Indian bankers had begun to feel an unfamiliar sensation: optimism.
Implementation of the Russian Direct Investment Fund in Saudi Arabia is on its way to greatly improving the two nations’ bilateral relations.
“There will always be soda, but I think the era of it being acceptable for kids to drink soda all day long is passing, slowly,” said Marion Nestle, a professor of nutrition at New York University.
Though President Trump has always maintained an “America First” policy, many economists have questioned its validity, especially when it was announced that the President harbored plans to abandon trade relations with significant economic powers, in particular China.
Despite its dismissal by leading authorities across the world, cryptocurrency is now being described by many as “unstoppable” and “incredible hulk.”
Experts predict that President Trump’s new tax initiatives may prompt American companies to open more production sites on foreign soil in pursuit of higher profits.