The daily business briefing: January 4, 2017
Ford cancels plan for Mexico plant after Trump criticism, U.S. stocks gain at start of 2017 trading, and more
Ford cancels plan for Mexico plant in victory for Trump
Ford Motor Co. said Tuesday that it is canceling plans to build a $1.6 billion factory in Mexico. Instead, the second largest U.S. automaker will invest $700 million in a Michigan factory, creating 700 jobs. The move came after President-elect Donald Trump harshly criticized Ford for its Mexico plans. Ford CEO Mark Fields said the move would allow the company to "fully utilize capacity at existing facilities." He said he had not cut a deal with Trump, but that the decision was "a vote of confidence" in Trump's plans to cut taxes and ease regulations. Trump turned his attention to General Motors, threatening a "big border tax" on vehicles made in Mexico.
Stocks gain on first trading day of 2017
U.S. stocks and the dollar started the 2017 trading year with gains on Tuesday. The dollar jumped to its highest level in 14 years against the euro and a basket of several major currencies. The Nasdaq Composite hit a record intraday high, and both the Dow Jones Industrial Average and the S&P 500 edged higher, close to record highs. "Job growth appears to be picking up, orders are picking up quite strongly, prices are increasing quite strongly as well," said Shaun Osborne, currency strategist at Scotia Capital in Toronto. "That suggests the (Federal Reserve) is going to have to remain active in this kind of environment." Global stocks were mixed on Wednesday, but S&P 500 and Dow futures edged higher before the opening bell.
Tillerson and ExxonMobil agree to sever ties
ExxonMobil and its former chairman and CEO Rex Tillerson have agreed to sever their ties to meet requirements to avoid any conflicts of interest before the Senate considers confirming him as President-elect Donald Trump's secretary of state. If Tillerson is confirmed, about $182 million worth of deferred shares in the oil giant that he would have received over the next decade will be moved into an independently managed trust, the company said. Tillerson also said he would sell his current stake of 600,000 shares if confirmed. His confirmation could be bumpy due to bipartisan concerns over his ties to Russia.
Trump picks lawyer Robert Lighthizer as U.S. trade representative
President-elect Donald Trump has chosen lawyer and trade hardliner Robert Lighthizer as head of the U.S. Trade Representative office, the Trump transition team said Tuesday. Lighthizer served as deputy trade representative under President Ronald Reagan. "Ambassador Lighthizer is going to do an outstanding job representing the United States as we fight for good trade deals that put the American worker first," Trump said in a statement. The office of the U.S. Trade Representative oversees trade negotiations, creates international trade and investment policy, and represents American interests at the World Trade Organization.
Euro-area inflation rises just above expectations
Inflation rose by more than expected in Europe last month, with consumer prices increasing by 1.1 percent from a year earlier after rising by 0.6 percent in November, the European Union's statistics office in Luxembourg said on Wednesday. Economists on average had forecast a 1 percent increase. The gains came as oil prices surged on hopes that a deal to trim output by OPEC and leading non-OPEC producers would help ease a glut that has brought down crude prices. The news also came after the European Central Bank decided to prolong its quantitative easing to boost inflation as political uncertainties weighed on euro-area economies.