The daily business briefing: May 4, 2017
House Republicans schedule Thursday vote on new health bill, Hulu launches live TV streaming service, and more
House schedules Thursday vote on GOP health plan
House Republican leaders said Wednesday that they had lined up enough support to pass their revised health-care bill, and scheduled a vote for Thursday. GOP lawmakers and the White House failed in their first attempt to replace key elements of ObamaCare, and their second attempt appeared bogged down over concern among moderates that changes made to win over hardline conservatives would threaten coverage for people with pre-existing conditions. House Republican leaders scheduled the vote after winning over some holdouts by adding $8 billion to help cover insurance costs for people with pre-existing conditions. "We have enough votes," House Majority Leader Kevin McCarthy (R-Calif.) said Wednesday night. "It'll pass."
Fed holds interest rates steady
The Federal Reserve held interest rates steady in the 0.75 percent to 1 percent range as expected on Wednesday. At the end of a two-day meeting, central bank policy makers said they were a bit concerned about how "economic activity slowed," growing by just 0.7 percent in the first quarter. Financial markets had priced in low odds of a hike this month, but put the likelihood of a rate increase in June at better than 50-50. In its statement, the Fed said it did not expect the economy's weakness to last, suggesting its plan to raise rates a couple more times this year remains unchanged. That confidence helped lift U.S. stock futures, pointing to opening gains. "The language was just really to acknowledge some of the slowdown and weakness that has been seen, but also to send the message that it's not enough to deter them from their plans," said Craig Bishop, lead fixed income strategist at RBC Wealth Management.
House approves deal to avoid shutdown
The House voted 309-118 to approve a $1.1 trillion spending deal that would keep federal agencies funded beyond Friday, averting a government shutdown. The bill includes some Republican priorities, including an extra $15 billion in defense spending and $1.5 billion for tighter border security. To satisfy Democrats, the legislation includes a prohibition against using the border security money for President Trump's promised wall on the Mexican border. The measure also includes nearly $5 billion in domestic spending increases, including $295 million Democrats wanted to help Puerto Rico make Medicaid payments. The deal came after weeks of high-stakes negotiations that became easier after Trump withdrew his insistence on including money for his wall. The Senate is expected to vote on the bill Thursday, and then send it to Trump for his signature.
Tesla reports bigger quarterly loss, but strong sales
Tesla reported a widening quarterly loss on Wednesday, but said sales grew rapidly and it remained on target to launch its first mass-market electric car, the Model 3, this summer. Tesla shares fell by 2.4 percent in after-hours trading following the announcement, but they were still up 46 percent in 2017 so far. Many analysts remained bullish, citing the potential for the Model 3 to boost Tesla's sales further, although the stock was down a bit more in pre-market trade on Thursday.
Hulu launches live TV streaming service for cable cord-cutters
Hulu launched its $40-per-month television streaming service in public beta Wednesday, offering subscribers more than 50 live TV channels as well as access to its streaming catalog. Hulu enters a crowded market for cord-cutters, competing against Google's YouTube TV, AT&T's Direct TV Now, Dish Network's Sling TV, and Playstation Vue. Hulu's service is twice as expensive as Sling TV, but it offers more channels. Hulu TV subscribers also can watch channels including CNN, ESPN, TNT, and TBS and store up to 50 hours of DVR content for free. Some analysts said Hulu TV could help cord-cutting providers reach critical mass. "Now you bring in convenience, maybe some cost savings and you bring in news and sports and you start to get to that new world that we've been talking about for years," said 7Park Data analyst Christopher Coby.