Economic twilight zone: Bonds that charge you for lending
FRANKFURT, Germany (AP) — Imagine lending money to someone and having to pay for the privilege of doing so. Or being asked to invest and informed of how much money you'll lose. Sounds absurd, but increasingly that's the global bond market these days. A rising share of government and corporate bonds are trading at negative interest yields — a financial twilight zone that took hold after the financial crisis and has accelerated on fear that a fragile global economy will be further damaged by the U.S.-China trade war.
Powell may signal future rate cuts, but would they matter?
WASHINGTON (AP) — When Jerome Powell delivers the keynote speech Friday to an annual gathering of global central bankers in Jackson Hole, Wyoming, the Federal Reserve chairman may signal to the world what the Fed will do — or can do — to help the economy and restore confidence. The question, though, is: Would a rate cut — or even multiple rate cuts — really matter?
Trump flip-flops on tax cuts, citing 'strong economy'
WASHINGTON (AP) — A day after considering cutting taxes to promote economic growth, President Donald Trump has now changed course and says he'll abandon the idea because the nation already had "a strong economy." Trump's flip-flop comes after recent market volatility and economic uncertainty, and amid a debate about whether the United States is heading for a slowdown that would imperil his reelection chances.
Beijing appeals to US to 'meet China halfway' on trade
BEIJING (AP) — Beijing is appealing to Washington to 'meet China halfway' and end a tariff war after President Donald Trump said Americans might need to endure economic pain to secure longer-term benefits. A foreign ministry spokesman expressed hope the United States can "get along" with China and restore "mutually beneficial" trade. Trump and President Xi Jinping agreed to resume negotiations but neither side has indicated a willingness to compromise.
Fed officials widely divided on rates at July meeting
WASHINGTON (AP) — Federal Reserve officials were widely divided at their meeting last month when they decided to cut rates for the first time in a decade, with some arguing for a bigger rate cut while others insisted the Fed should not cut rates at all. The minutes of those discussions showed two officials believed the Fed should cut its benchmark policy rate by a half-percentage point, double the quarter-point reduction the central bank eventually agreed upon.
Retailers' results show sharp divide between losers, winners
NEW YORK (AP) — The divide between retail winners and losers is widening. That became even more evident Wednesday with the latest batch of earnings reports: Big-box stores and off-price retailers have been responding faster to shoppers' increasing shift online with expanded deliveries and better merchandise. But many mall-based clothing chains and department stores continue to suffer weak sales.
US home sales rose 2.5% in July, aided by low mortgage rates
WASHINGTON (AP) — U.S. home sales increased 2.5% in July. It's a sign that lower mortgage rates have produced a spurt of home-buying. The National Association of Realtors says homes sold last month at a seasonally adjusted annualized rate of 5.42 million units. Average interest rates on 30-year mortgages have fallen to 3.60%, the lowest in nearly three years.
Germany's Merkel dangles possibility of negotiated Brexit
BERLIN (AP) — German Chancellor Angela Merkel raised the possibility that a negotiated departure of Britain from the European Union might still be possible even as the clock is ticking on a deal that would satisfy both sides. Speaking alongside U.K. Prime Minister Boris Johnson ahead of bilateral talks in Berlin, Merkel indicated that a solution for the Irish border issue might yet be found before the Oct. 31 exit date.
US has 501,000 fewer jobs than first reported
WASHINGTON (AP) — The U.S. job market isn't quite as strong as originally believed. Revised figures showing that the economy had 501,000 fewer total jobs this March than initially reported. The Labor Department says that nearly two-thirds of the downward revision came from the retail and leisure and hospitality sectors, the industries most associated with consumer spending.
Report shows US deficit to exceed $1 trillion next year
WASHINGTON (AP) — The Congressional Budget Office says the federal budget deficit is expected to balloon to more than $1 trillion in the next fiscal year. The nonpartisan office's projections are the first to take into account the big budget deal that President Donald Trump and Congress reached this summer. The return of $1 trillion annual deficits comes despite Trump's vow when running for office that he would not just balance the budget but pay down the entire national debt.
US stocks climb after major US retailers post solid earnings
NEW YORK (AP) — Strong earnings reports from several big retailers helped drive stocks broadly higher on Wall Street Wednesday as the market bounced back from its first loss in four days. Target notched its biggest-ever gain, while Lowe's had its best day in more than a year. Traders had a muted reaction to the afternoon release of notes from the Federal Reserve's policymaking meeting last month. Bond prices fell, sending yields higher.
The S&P 500 rose 23.92 points, or 0.8%, to 2,924.43. The Dow Jones Industrial Average gained 240.29 points, or 0.9%, to 26,202.73. The Nasdaq added 71.65 points, or 0.9%, to 8,020.21. The Russell 2000 index of smaller company stocks picked up 11.84 points, or 0.8%, to 1,509.85.