The daily business briefing: April 26, 2017
Stocks return to record territory, Trump prepares to unveil his tax plan, and more
Stocks gain on optimism over U.S. tax proposal and French vote
World stocks on Wednesday were mixed, with some markets hitting record highs after news of President Trump's promised corporate tax cut lifted U.S. shares on Tuesday. Optimism over the first round in France's presidential election, in which pro-European Union centrist Emmanuel Macron led anti-EU far-right candidate Marine Le Pen, also buoyed markets. "On top of (the French election result) we have had a very decent set of corporate earnings in the U.S. and that helped push the market further along the same direction," said Investec economist Philip Shaw. The Nasdaq Composite broke 6,000 for the first time to close at a record high of 6,036, and the Dow Jones Industrial Average gained 232 points, or 1.1 percent, while the S&P 500 index rose by 0.6 percent, although U.S. futures were broadly unchanged early Wednesday.
Trump to unveil tax plan with cuts for businesses and families
President Trump plans to unveil a broad tax proposal on Wednesday that is expected to include a sharp cut in the corporate tax rate, from 35 percent to 15 percent, as well as a child-care tax credit and increased standard deductions for individuals. Trump also will propose cutting tax rates for small businesses that file under the individual tax code. The bigger deduction would provide a modest tax cut for middle-income people, while the corporate rate cut would partially fulfill Trump's promise to cut taxes for businesses. The White House reportedly hopes that the family-friendly provisions will give Democrats a strong incentive to negotiate a deal. Trump administration officials say the tax cuts will boost the economy and employment by giving businesses and individuals more money to spend. The plan, however, could add significantly to the deficit.
Strong quarterly report sends Twitter shares soaring
Twitter shares jumped by more than 11 percent early Wednesday after the micro-blogging site reported quarterly earnings that exceeded analysts' expectations. Twitter said it earned 11 cents a share, while analysts had predicted just 1 cent a share. The company also reached 328 million monthly active users, adding 7 million more than expected and 9 million more than in the previous quarter. That marked the fourth straight quarter in which Twitter accelerated its daily usage, giving it 14 percent year-over-year growth.
Canada's Trudeau says U.S. lumber tariff will hurt both sides of border
Canadian Prime Minister Justin Trudeau warned Tuesday that President Trump's newly imposed tariff on Canadian lumber could result in a "thickening" of the border separating Canada and the U.S., hurting both of the strong longtime allies and trade partners. "There are millions of good U.S. jobs that depend on the smooth flow of goods, services, and people back and forth across our border," Trudeau said at a news conference, noting that an auto part can cross the border six times before rolling off an assembly line in a finished car. "You cannot thicken this border without hurting people on both sides of it," Trudeau said. Trump has criticized Canada for allegedly subsidizing Canadian lumber to give its companies an unfair advantage, and enacting policies to drive down milk prices, hurting U.S. dairy farmers.
Wells Fargo shareholders vent anger at board in annual meeting
Wells Fargo shareholders expressed their unhappiness with the bank's board on Tuesday, withholding what normally would be overwhelming support for the slate of directors in a vote at the end of the company's annual meeting. The three-hour meeting was repeatedly interrupted by stockholders demanding to know how bank employees were allowed to open more than 2 million fake accounts for customers without their permission, all because they felt pressure to meet aggressive sales targets. Only three directors received support from 90 percent of shareholders, which chairman Stephen Sanger said they all would normally get. Sanger got just 56 percent approval. "We recognize there is still a great deal of work to do to rebuild the trust of stockholders, customers, and employees," he said.