U.S. Considers Broad Curbs on Chinese Imports, Takeovers
The Trump administration is considering clamping down on Chinese investments in the U.S. and imposing tariffs on a broad range of its imports to punish Beijing for its alleged theft of intellectual property, according to people familiar with the matter.
An announcement following an investigation by the U.S. Trade Representative’s office into China’s IP practices is expected in the coming weeks, potentially handing President Donald Trump further cause to impose trade restrictions. (…)
Under the most severe scenario being weighed, the U.S. could impose tariffs on a wide range of Chinese imports, from shoes and clothing to consumer electronics, according to two people familiar with the matter who spoke on condition of anonymity because the discussions aren’t public.
The Trump administration could combine the tariffs with restrictions on Chinese investments in the U.S., which are reviewed for national-security risks by Treasury’s Committee on Foreign Investment in the U.S., the people said. The new measures being considered by the administration could go beyond even domestic security considerations. (…)
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Trump promises U.S. friends ‘flexibility’ as trade war warnings rise
U.S. Factory Orders Reverse Course
Manufacturers’ orders declined 1.4% (+6.6% y/y) during January following a 1.8% December rise, revised from 1.7% reported initially. Total factory orders excluding transportation improved 0.4% (6.5% y/y), the weakest rise since June. Durable goods orders slumped 3.6% (+7.0% y/y), revised from -3.7% in the advance report, following a 2.7% gain. (…)
Will soaring consumer confidence boost consumption?
The divergence between “hard†and “soft†data continues. (The Daily Shot)
Source: Capital Economics
U.S. Consumer Credit Usage Slackens
ECB Unexpectedly Dials Back Stimulus Pledge as Economy Improves
“Unexpectedly� Be serious, Europe is booming.
S&P 500 companies expected to buy back $800 billion of their own shares this year
(…) J.P. Morgan notes that buybacks will be a support for stocks and recommends that investors continue to buy the dips. Analysts are expecting a combination of improving economic growth and lower taxes to contribute $100 billion of buybacks. Repatriation is expected to contribute about $200 billion. (…)
Fed’s Brainard Sees Rate Rises as Appropriate as Inflation Firms Federal Reserve governor Lael Brainard said she has become more confident inflation will hit the central bank’s target, allowing officials to continue raising interest rates gradually.
(…) Ms. Brainard in recent years was one of the Fed’s most vocal advocates for patience in raising interest rates, noting that inflation remained subdued despite a strong labor market. (…)
West Virginia Teachers Strike Ends With 5% Pay Raise
Global Inflation Stalled in January Inflation in the world’s largest economies was unchanged for a third straight month in January, while it fell in rich countries, according to figures released by the OECD.
Inflation in the world’s largest economies was unchanged for a third straight month in January, while it fell in rich countries, according to figures released Tuesday by the Organization for Economic Cooperation and Development. (…) It said consumer prices across the Group of 20 largest economies, which account for most of the world’s economic activity, were 2.5% higher in January than a year earlier. That annual rate of inflation was the same as in November and December.
The OECD said that across its 35 members—which are mostly rich countries—the annual rate of inflation dipped slightly to 2.2% in January from 2.3% December, having also fallen in the earlier month. That drop wasn’t solely due to volatile items such as food and energy, since the core rate of inflation dipped to 1.8% from was 1.9%. (…)
China’s household debt problem
A lot of the increased debt is tied into housing. China’s house prices are a very important to watch.
China’s property market accounts for a significant share of economic growth—as much as a third, according to Moody’s Investors Service—sending ripples outward into the global economy. The property boom stoked imports of housing materials, cars, appliances and other products. UBS called Chinese property one of the major engines of global growth in 2017. (WSJ)