The daily business briefing: October 11, 2017
Pruitt signs withdrawal from Obama's Clean Power Plan, Alibaba announces $15 billion research effort, and more
Pruitt signs proposal to withdraw from Obama-era Clean Power Plan
EPA Administrator Scott Pruitt on Tuesday signed a measure to withdraw from the Clean Power Plan, an Obama-era strategy that set national limits on carbon pollution from power plants. Pruitt had indicated Monday at an event with coal miners in Kentucky that he would sign the proposal. Former President Barack Obama instituted the CPP in 2015 in an effort to reduce carbon dioxide pollution, but the Trump administration has said the emissions standards kill U.S. jobs and cost consumers billions. In a statement Tuesday, the EPA said rolling back the CPP will "facilitate the development of U.S. energy resources and reduce unnecessary regulatory burdens" associated with their development.
Alibaba announces doubling of research spending to $15 billion over 3 years
Chinese e-commerce giant Alibaba Group Holding announced Wednesday that it would spend $15 billion on research over the next three years, more than doubling its spending on developing next-generation technology. Alibaba plans to set up seven research labs, in Beijing, Hangzhou, San Mateo and Bellevue in the U.S., Moscow, Tel Aviv, and Singapore. It will recruit 100 researchers to work on the program, called the Academy for Discovery, Adventure, Momentum, and Outlook, or DAMO Academy. The spending increase aims to help Alibaba keep up with Amazon.com, Tencent Holdings, and other tech companies pushing new technologies. Alibaba said the effort was also key to fulfilling its promise to create 100 million jobs in 20 years.
IMF raises its projection for global economic growth, but U.S. lags
The International Monetary Fund on Tuesday increased its projection for global economic growth by a tenth of a percentage point. The IMF said in its quarterly World Economic Outlook that the world's collective gross domestic product would rise to a 3.6 percent rate in 2017 and 3.7 percent in 2018, up from just 3.2 percent in 2016. Last year's pace was the slowest since the 2008 financial crisis. The IMF revised its estimates of U.S. growth downward, suggesting the world's biggest economy would lag behind despite President Trump's promise to lead the country back to 3 percent growth by cutting taxes and regulations.
Stocks hover near record levels ahead of Fed minutes release
U.S. stocks hit fresh records on Tuesday, boosted by gains by Walmart and other consumer shares. Walmart rose by three percent after the retail giant outlined plans for hundreds of new overseas stores and lifted its guidance for 2019 sales. The Dow Jones Industrial Average gained 0.3 percent, while the S&P 500 rose by 0.2 percent and the Nasdaq by 0.1 percent. U.S. stock futures early Wednesday showed little change, with the major indexes hovering near their record levels as investors awaited the release of minutes from the Federal Reserve's September meeting and a flurry of third-quarter earnings reports.
Committee backs repeal for Chicago soda tax
A Cook County Board committee on Tuesday voted 15-1 in favor of a proposal to repeal a controversial penny-an-ounce tax on sugary sodas in the Chicago area. The full board plans to decide on the measure on Wednesday, but that vote is considered a formality. Opponents are confident they have enough votes lined up to scrap the tax, which they call "taxation without representation," and override a potential veto by Cook County Board President Toni Preckwinkle, the chief advocate for the surcharge. Preckwinkle has warned that without the $200 million per year she said the tax would generate, the board would have to cut key public-health programs and services from its budget. The tax only took effect Aug. 2, and, if repealed, it will go away on Dec. 1.