Written by Econintersect
Early Bird Headlines 31 Aug 2018
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, published Monday, Wednesday and Friday, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
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​Global
- Asia markets lower following news that Trump supports supports further tariffs on China (CNBC) sia markets were largely down on Friday afternoon as Wall Street ended its four-day winning streak in the last session, following a report that U.S. President Donald Trump voiced his support for moving forward with more proposed tariffs. The U.S. dollar index was up at 94.583 as of 3:23 p.m. HK/SIN. Brent crude oil was down 0.28% at $77.55 a barrel while U.S. crude fell by 0.13% at $70.16 a barrel. Spot gold was up 0.2% at $1,202.04 an ounce at 0321 GMT.
U.S.
- Trump nixes federal pay raise (The Hill) President Trump on Thursday announced that he would cancel a scheduled 2.1% across-the-board pay increase for federal workers, as well as locality pay increases. Congress could reverse this order with future legislation. Trump wrote in a letter to the Speaker of the House and the president of the Senate:
“In light of our Nation’s fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets.”
- Trump Says He Will Pull U.S. Out of WTO ‘If They Don’t Shape Up’ (Bloomberg) President Donald Trump said he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, continuing his criticism of a cornerstone of the international trading system. A U.S. withdrawal from the WTO would severely undermine the post-World War II multilateral trading system that the U.S. helped build. Trump said last month that the U.S. is at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needs to “change their ways.” Trump said Thursday in an interview with Bloomberg News at the White House:
“If they don’t shape up, I would withdraw from the WTO.”
- Trump Accuses NBC’s Lester Holt of ‘Fudging’ Russia Interview, Provides No Proof (Daily Beast) President Donald Trump unleashed a furious attack on the media yet again Thursday morning, urging CNN to fire its president, Jeff Zucker, and accusing NBC News anchorman Lester Holt of “fudging” an interview with him.
- Originalism is at war with America (The Hill) President Trump is nominating federal judges, and Supreme Court Justices such as Judge Brett Kavanaugh, who claim to be committed to “originalism.” This approach to constitutional law requires that the Constitution be interpreted to mean today what the text was intended or understood to mean at the time it was written. But originalism conflicts sharply with American reality and American ideals, according to this Op Ed.
- Viral video of O’Rourke defending NFL player protests racks up more than 44M views (The Hill) A video of Texas Senate candidate Beto O’Rourke (D) defending NFL players who kneel during the national anthem has reportedly racked up more than 44 million views after going viral earlier this month. A spokeswoman for NowThis, the media company that produced and published the video of O’Rourke’s comments, confirmed to Vanity Fair on Wednesday that the video had garnered more than 44 million views across Twitter, Snapchat, Instagram, Facebook and YouTube as of Tuesday.
- FBI arrests man who threatened to kill Boston Globe staff for criticizing Trump (The Guardian) A man has been arrested and charged with threatening to kill employees of the Boston Globe newspaper, in messages repeating Donald Trump’s claims that journalists are the “enemy of the people” and “fake news“. Robert Chain called the Globe’s newsroom and claimed he would shoot staff members in the head, according to the FBI, which said Chain later specified that he was retaliating against the newspaper’s criticism of Trump’s attacks on the news media. Chain, of Encino, California, owns several firearms and was found to have purchased a new 9mm carbine rifle in May this year, according to US authorities.
- Trump Threatens to ‘Get Involved’ in Justice Department (Daily Beast) President Trump on Thursday threatened to “get involved” in the work of the Justice Department and FBI if the two agencies don’t “start doing their job.” Speaking at a rally in Indiana, the president railed against the ongoing Russia investigation and suggested the Justice Department and FBI had let Hillary Clinton get away with crimes.
- Ed Yardeni Says Don’t Underestimate Trump’s Economy (Think Advisor) Investment strategist and prognosticator Ed Yardeni is forever on the alert for signs of weakness in the economy: They could signal a recession and bear market looming. Here’s his bullish news: There’s no such sign, as he tells ThinkAdvisor in an interview five days before the bull market set a record for the longest run in history.
“Don’t underestimate” Trump has been his optimistic mantra ever since Donald J. Trump was elected president. In the last year and a half, he has not wavered from that faith. For example, he believes that Trump’s trade war could very well result in less protectionism as opposed to more.
- Income Expectations Far Outstrip Reality (Twitter)
EU
- Italy’s call for France and Spain to open ports to migrants is rejected (The Guardian) A call by Italy for France and Spain to offer up their ports for the disembarkation of migrants rescued in the Mediterranean has failed to garner the backing of EU member states, despite Rome’s threat to pull the plug on the EU’s Operation Sophia rescue mission. Hijacking a meeting of defence ministers in Vienna, the Italian representative, Elisabetta Trenta, called the ports where rescue ships dock to be rotated to lift the burden on her country.
- Nationalism, immigration and minorities (Pew Research Center) Western Europeans take pride in both their national identity and European identity but in all cases national pride outranks European pride.
Italy
- Italian Bonds Are Tumbling (Zero Hedge, Talk Markets) Whether it is due to contagion from the latest emerging markets sell-off, or growing concerns about Italy’s budget demands, another market that has gotten whacked on Thursday is the Italian bond market where BTP futures have reversed earlier post-auction gains, dropping to a day low as risk-off sentiment spreads across markets. As a result, the Italian curve is bear flattening, with the 2y +14bps to 1.30%.
India
- India’s World-Beating Growth Not Enough to End Jobs Drought (Bloomberg) hat may seem like an absurd description for India, an economy the International Monetary Fund expects to expand 7.3% in the fiscal year through March 2019 and 7.5% in the next. Yet the reality is that even at its current pace, India is having trouble creating enough new jobs for its massive workforce or enough wealth to broaden its middle class.
With its demographic tailwind and massive developmental needs, Asia’s third-biggest economy should be growing at double-digit rates. Holding India back are glacial economic reforms, a fragile banking sector, rigid labor laws and a spotty educational system that imparts limited skills to the 12 million young people who enter the job market each year.
China
- China reported on Friday that factory activity was higher than expected in August, with the official manufacturing Purchasing Manager’s Index (PMI) coming in at 51.3.
- The improvement was spurred by a pick-up in production, but there was also a rise in the inventories of finished goods while new export orders fell, suggesting a less rosy outlook than the headline number, said Julian Evans-Pritchard, a China economist.
- Economic data from China is being closely watched amid a trade war between Beijing and Washington.
Argentina
- In an effort to shore up its plunging peso, the Central Bank of Argentina moved to raise rates for the fifth time since April on Thursday.
- But the world’s highest benchmark rates have done little to soothe rapidly deteriorating sentiment in Latin America’s third-largest economy.
- The value of Argentina’s peso plunged more than 13 percent on Thursday, following a 7 percent slide a day earlier. This means that since the start of the year, the currency has fallen more than 108 percent against the U.S. dollar.
Brazil
- Brazil Central Bank Intervenes As Real Crashes Near Record Lows (Zero Hedge, Talk Markets) The bloodbath in Argentina and Turkey is evident in Brazil also where Bloomberg reports that the central bank just intervened for the first time since June 22.