The daily business briefing: February 27, 2017
Treasury secretary says Trump's budget will boost economy, Buffett says stocks aren't in "bubble territory," and more

- 1. Treasury secretary says Trump budget won't touch entitlement programs
- 2. Buffett says stocks 'not in bubble territory'
- 3. London Stock Exchange braces for rejection of its merger proposal
- 4. Walmart conducts price tests in battle with Aldi
- 5. Latest French presidential polls ease market fear of Le Pen victory

1. Treasury secretary says Trump budget won't touch entitlement programs
Treasury Secretary Steven Mnuchin said in a Fox News interview released on Sunday that President Trump's budget will focus on cutting taxes to boost economic growth, leaving alone entitlement programs such as Social Security and Medicare. "We are not touching those now," Mnuchin said. The administration aims to lift economic growth by 3 percent through a mix of tax and regulation cuts, and Mnuchin said that President Trump would address tax reform in his speech to a joint session of Congress on Tuesday. "This is all about creating growth," he said. Trump also reportedly plans to ask for a sharp increase in military spending.
2. Buffett says stocks 'not in bubble territory'
Billionaire investor Warren Buffett on Monday told CNBC that stocks "are not in bubble territory" despite an extended rally since the November presidential election that has pushed major U.S. indexes to record after record. Buffett, who has put $20 billion into the market since November, said U.S. stocks remain "on the cheap side" as interest rates remain near historically low levels. "If interest rates were 7 or 8 percent, then these [stock] prices would look exceptionally high," said the chairman and CEO of Berkshire Hathaway, who published his closely watched annual letter to shareholders over the weekend.
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3. London Stock Exchange braces for rejection of its merger proposal
The London Stock Exchange said Sunday that European regulators probably would reject its proposed merger with Deutsche Borse. The London exchange said that European Commission regulators have said it would have to sell its majority stake in the MTS electronic bond trading platform as a condition for such a massive merger, but the exchange could not accept such a "disproportionate" condition. "Taking all relevant factors into account and acting in the best interests of shareholders, the L.S.E.G. board today concluded that it could not commit to the divestment of MTS," the London exchange said. "Based on the commission's current position, L.S.E.G. believes that the commission is unlikely to provide clearance for the merger."
4. Walmart conducts price tests in battle with Aldi
Walmart has launched a price-comparison test in at least 1,200 Midwest and Southeast stores in a price war with German-based discount grocery chain Aldi and other rivals, Reuters reported on Monday, citing sources familiar with the matter. Groceries account for 56 percent of Walmart's revenue, and price competition in the industry is tough. Walmart also reportedly held meetings last week at its Bentonville, Arkansas, headquarters, where it demanded that food and consumer products vendors, including Procter & Gamble, Unilever, and Conagra Brands, reduce costs by 15 percent.
5. Latest French presidential polls ease market fear of Le Pen victory
French market jitters eased on Monday after new polls showed independent French presidential candidate Emmanuel Macron gaining strength, and narrowing the gap with far-right National Front leader Marine Le Pen. The yield on the 10-year French government bond fell to 0.88 percent early Monday, its lowest level in a month, after the release of the two polls, which showed that Macron had opened his biggest lead yet over Republican candidate Francois Fillon. Macron's strength is seen as an indication that Le Pen will lose the run-off in a two-round vote in April and May. A Le Pen victory "would be the horror scenario for the markets and the EU given her radical euro-exit policies," said Jan Randolph, head of sovereign risk at IHS Markit.
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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