U.S. President-elect Donald Trump on Tuesday blasted U.S. carmaker General Motors and threatened to impose a “big border tax” for making its Chevy Cruze model in Mexico.
“General Motors is sending Mexican made model of Chevy Cruze to U.S. car dealers-tax free across border. Make in U.S.A. or pay big border tax!” Trump said in a post on Twitter.
… GM responded with its version of the facts, according to which all Cruze sedans are built in the US, while the Mexican-produced Chevy Cruze hatchback is built for global markets, “with a small number sold in the US”
General Motors manufacturers the Chevrolet Cruze sedan in Lordstown, Ohio.
All Chevrolet Cruze sedans sold in the U.S. are built in GM’s assembly plant in Lordstown, Ohio.
GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the U.S.
Now we await Trump’s counter response.
Trump chooses protectionist-leaning trade representative Appointment of Robert Lighthizer signals expected shift in US trade policy
Robert Lighthizer, who has been leading the Trump transition team’s meetings on trade with the Obama administration, served as deputy US trade representative in the administration of Ronald Reagan at a time when the office was renowned for its trade battles with Japan. He has long represented the US steel industry in trade cases as a partner at law firm Skadden Arps and in recent years has been a vocal advocate for a protectionist shift in the Republican party. (…)
“I am fully committed to President-elect Trump’s mission to level the playing field for American workers and forge better trade policies which will benefit all Americans,” Mr Lighthizer said. (…)
“Modern free traders . . . embrace their ideal with a passion that makes Robespierre seem prudent,” Mr Lighthizer wrote in a 2008 New York Times op-ed. (…)
China’s Debt Boom Looks Eerily Familiar The International Monetary Fund says Beijing must act with urgency to fix the problem before it becomes too late.
(…) Without an immediate rollout of an aggressive, comprehensive strategy, the IMF says the country is at risk of a credit crunch that could stall growth in the Asian giant and hit the global economy with another bout of damaging headwinds.
“Risks appear high but manageable if the problem is addressed promptly,” fund economists warn in a new blog post. But the window is closing quickly, the IMF adds. “China urgently needs to tackle its corporate-debt problem before it becomes a major drag on growth.” (…)
Many economists point out the government has large foreign-exchange reserves it can use to buffer against a credit crunch and the state balance sheets offer plenty of fiscal room to absorb shocks. But the central bank has burned through nearly a quarter of its foreign-exchange reserves over the last two years trying to keep the yuan’s value from plummeting. And state balance sheets don’t reflect the government’s total liabilities, including from government-owned companies. (…)
- Short-term rates in China remain elevated and highly volatile – below is the 7-day repo rate. Economists believe Beijing is attempting to reduce speculative activity and leverage. (The Daily Shot)
- Elsewhere in Asia, Singapore’s GDP growth shocked to the upside, with a 9% quarter-over-quarter growth, apparently due to improvements in manufacturing.
Earnings Recovery Set to Propel Stocks Higher in 2017 It is corporate earnings, not Donald Trump’s election, that is most likely to help sustain U.S. stocks’ march in 2017.
(…) Earnings for companies in the S&P 500 grew 3.1% in the third quarter from a year earlier, according to FactSet, entering positive territory for the first time since the first quarter of 2015, when they grew 0.5%. Analysts polled by FactSet expect the rebound to continue, and are estimating a 3.2% growth rate in the fourth quarter of 2016. (…)
Corporate earnings are projected to grow by double digits through 2017. Analysts polled by FactSet expect earnings to grow 11% in the first quarter, 11% in the second quarter, 9.1% in the third quarter and 14% in the fourth. (…)
A group of 15 Wall Street strategists expect the S&P 500, on average, to finish the year at 2356.
That is good for only about a 5% gain, the least optimistic this bunch has been since 2005, according to Bespoke Investment Group. (…)
Within the consensus forecast is a telling trend: Few strategists are willing to deviate much from the pack.
The gap between the most optimistic and pessimistic forecasts is just 9%, the smallest on record dating back to 1999, according to Jason Goepfert, founder of Sundial Capital Research. (…)
There is a bright side: Strategists are coming off a surprisingly accurate year. At the beginning of 2016, they forecast the S&P 500 would finish at roughly 2200, just below where it ended Friday.
That is rare; since 2000, they have predicted the S&P 500 would gain about 10% a year, grossly overshooting the market’s actual performance. And, on average, the consensus always has predicted annual gains, missing all five down years in that stretch. (…)
A study by CXO Advisory Group collected more than 6,500 forecasts from 68 so-called market gurus.
More were wrong than right. And an accuracy rate as high as 70% was “quite rare,” says Steve LeCompte of CXO. (…)