Business This Week | The Economist
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Janet Yellen, Secretary of the United States Treasury, has given her strongest warning yet about the potential consequences of not raising the federal rate debt limit, saying it would be “catastrophic”. The Treasury estimates it will be cash-strapped by Oct. 18 unless the cap is raised to allow the government to continue borrowing. Even with an interim resolution to avoid a government shutdown, the question of lifting the debt ceiling remains. Ms Yellen said the uncertainty was eroding investor confidence.
As if the signal …
Stock markets had their worst day in months on September 28. The S&P 500 fell 2% and the Nasdaq fell 2.8%, its biggest drop in six months. European and Asian stock markets also fell. The prospect of a government shutdown was only one factor destabilizing investors. Markets are also digesting measures taken by central banks to curtail their stimulus programs, which has led to a massive sell-off of bonds.
Natural gas prices have remained volatile, but are still rising sharply in Asia and Europe, and to a lesser extent in America. Who fed oil markets, as some industries turn to commodities to keep the lights on. The price of Brent crude climbed to $ 80 a barrel for the first time in three years.
Evergrande, China’s second-largest real estate developer, sold part of its stake in a bank to a public investment group, raising $ 1.5 billion. The bank demanded that Evergrande, which rocked the markets by warning of a default, use its proceeds to pay off a loan. It won’t make a big dent in the company’s $ 300 billion liability. Still, the fact that the stake was sold to a state-owned investment company was seen as a sign that the government is working behind the scenes to prevent the collapse of Evergrande.
Battle lines have been drawn in the US Senate over a possible second term for Jerome Powell as chairman of the Federal Reserve. Elizabeth Warren, a left-wing Democrat, has become the first senator to publicly oppose Mr Powell’s retention in power due to her past support for financial deregulation. She called him “a dangerous man”. Joe Biden is expected to announce his decision on who should head the central bank in the coming months.
Ford announced an $ 11 billion plan to build three factories that will produce batteries for electric vehicles and another factory to manufacture its F-Electric pickup truck series. The investment is in partnership with SK Innovation, a South Korean company; the automaker is providing $ 7 billion. Along with rivals Detroit, General Motors and Stellantis, Ford is committed to a greener automobile and wants 40% of its global sales to be electric by 2030.
Voters in Berlin backed a referendum proposal to expropriate apartments owned by business owners, the most visceral reaction to date in a major European city to real estate speculation that has cost most families dearly. The vote is not binding and can end up in the German Constitutional Court.
With one of the toughest vaccination warrants In U.S. affairs, United Airlines reported that 96% of staff in the United States had been gibbed to protect themselves against covid-19, but were preparing to lay off nearly 600 who had not done so before. the September 27 deadline. They had a few days of leeway to comply. About 2,000 employees requested a religious or medical exemption.
In Great Britain the leave plan introduced at the start of the pandemic in March 2020 has ended. During its roll-out, the program covered 11.6 million workers, paying up to 80% of their wages, although by July 2021 that figure had fallen to 1.6 million. The government has spent nearly £ 70 billion ($ 94 billion) on its support. In the meantime, revised figures have shown that the british economy rose 5.5% in the second quarter, a faster pace than a first estimate suggested. GDP is now just 3.3% below its pre-pandemic level at the end of 2019.
A leading indicator of house prices in America grew at a record pace for the fourth consecutive month. The S&P The national CoreLogic Case-Shiller Index jumped 19.7% in July from the same month a year ago, with the biggest increases reported in Phoenix, San Diego and Seattle. The company said it needed more data to find out whether the price spike was due to a move to suburbs in the wake of the pandemic.
Trade in bricks of another kind, Lego reported first half net profit of DKK 6.3 billion ($ 1 billion), up 140% from the same period in 2020.
What could go wrong
Amazon launched its first robot for home, which will sell for under $ 1,000. Astro, a mobile device connected to the Internet, has a periscope camera that its owner can access remotely. A nod to privacy concerns, it can be programmed to stay out of intimate spaces, such as the bedroom or bathroom.
This article appeared in the The World This Week section of the print edition under the headline “Business This Week”