The daily business briefing: June 30, 2017
The U.S. sanctions Chinese bank over North Korea ties, Nike shares soar after Amazon plans confirmed, and more
U.S. hits a Chinese bank with sanctions over North Korea ties
The Trump administration on Thursday announced that it was imposing sanctions on a Chinese bank, the Bank of Dandong, which the Treasury Department has accused of laundering money for North Korean companies. The U.S. also targeted a Chinese company and two Chinese individuals with the sanctions, which are part of an effort to cut off funding for North Korea's missile and nuclear weapons programs. "We will follow the money and cut off the money," Treasury Secretary Steven Mnuchin said in a briefing at the White House. The move came after the death of Otto Warmbier, a U.S. student who died after being imprisoned in North Korea for more than a year, and as President Trump reportedly grows impatient with China after he personally pressed President Xi Jinping to step up pressure on North Korea to curb its weapons programs.
Nike shares soar on strong profits and plans to sell shoes via Amazon
Nike shares jumped by nearly 7 percent in premarket trading after the athletic apparel company reported better-than-expected quarterly profit, and confirmed a plan to sell shoes directly through Amazon.com. Nike, the world's largest footwear maker, said its pilot program on Amazon would start out with a limited assortment of products. The company's comments confirmed earlier reports that Nike was looking into selling shoes directly rather than through third-party stores. "We're looking for ways to improve the Nike consumer experience on Amazon by elevating the way the brand is presented and increasing the quality of product storytelling," Nike Chief Executive Mark Parker said after the earnings report.
U.S. futures point to modest rebound
U.S. stock futures suggested a modest rebound on Friday, the last trading day of the second quarter, following Thursday losses that were fueled by a tech sell-off and rising concerns that central banks were preparing to unwind years of easy money policies designed to stimulate economic growth. European shares edged higher on Friday after their sharpest drop in nine months. The Stoxx Europe 600 gained 0.3 percent. In the U.S., Dow Jones Industrial Average futures gained 0.2 percent, S&P 500 futures rose by 0.3 percent, and Nasdaq-100 futures were up 0.4 percent, pointing to a higher open. Bonds, which have been under pressure this week, also showed signs of stabilizing.
China demands U.S. cancel arms sale to Taiwan
The Trump administration on Thursday announced that it was selling $1.42 billion worth of arms to Taiwan. State Department spokeswoman Heather Nauert said the sale shows "support for Taiwan's ability to maintain a sufficient self-defense capability," but does not mean there will be any change in the "one China" policy. The U.S. supports Taiwan, which China still claims as a province, but only officially recognizes China. The package includes technical support for early warning radar, as well as anti-radiation missiles, torpedoes, and missile components. China reacted angrily on Friday, demanding that the U.S. cancel the sale, which it said would pose a threat to China's security and harm Sino-U.S. relations.
CBO: GOP bill would cut Medicaid spending by 35 percent over 20 years
Senate Republicans' proposal to replace ObamaCare would slash Medicaid spending by 35 percent over the next two decades, the nonpartisan Congressional Budget Office said Thursday. The report, requested by Democrats, provided a longer-term forecast of the effects of the bill, the Better Care Reconciliation Act. Senate Majority Leader Mitch McConnell (R-Ky.) plans to send the CBO a revised proposal on Friday after a version released earlier this week failed to win over enough support to pass. The current proposal caps per-person Medicaid spending and phases out ObamaCare's expansion of the program, which provides health coverage for low-income people. As a result, the CBO said, the plan would reduce Medicaid spending from 2 percent of gross domestic product to 1.6 percent in 2036.