The daily business briefing: October 16, 2017
Spanish stocks drop as Catalan leader leaves secession question unanswered, oil prices rise as Iraq tries to take Kirkuk from Kurds, and more
Spanish stocks fall as Catalan leader defies deadline to clarify secession position
Spanish stocks fell by 0.7 percent on Monday, sapping strength from a key European index, after a statement by Catalonia's leader, Carles Puigdemont, failed to clarify whether he had declared independence from Spain. Spanish Prime Minister Mariano Rajoy threatened to take control of the Catalan government unless Puigdemont made it clear by Monday morning that Catalonia had not broken with Spain. Rajoy also said Puigdemont would have until Thursday to change his mind if he had declared independence. Puigdemont said only that he wanted two months of talks to discuss the wealthy northeastern region's independence. "We still don't know how this political conflict will end, but it will no doubt create downside risk to the single currency," said Hussein Sayed, chief market strategist at FXTM.
Oil prices rise as Iraq operation in Kirkuk raises supply fears
Oil prices jumped on Monday as Iraqi forces entered the Kurdish-held oil city of Kirkuk, escalating the crisis that erupted between Baghdad and the Kurdish Regional Government after Kurds voted for independence in a Sept. 25 referendum that the central government called illegal. Iraq launched the operation to take over Kirkuk and its oil fields on Sunday. International Brent crude futures were up by 58 cents to $57.75 per barrel by mid-morning, after trading as high as $58.13. The U.S. benchmark, West Texas Intermediate, was up 50 cents at $51.95 a barrel, after going as high as $52.22. "The escalation in Northern Iraq is the main driver," Commerzbank analyst Carsten Fritsch told the Reuters Global Oil Forum. "Oil supply from this region is at risk."
U.S. stocks edge up ahead of key earnings reports
U.S. stock futures edged up early Monday, giving the Dow Jones Industrial Average and Nasdaq Composite shots at fresh all-time highs ahead of key earnings reports. Netflix reports its quarterly results after Monday's close. Markets got a boost from Federal Reserve Chair Janet Yellen, who said Sunday that the U.S. economy remained strong despite a slowdown in inflation. She said that strength and strong hiring indicated that conditions are right for the central bank to continue its policy of gradually raising interest rates. "We will be paying close attention to the inflation data in the months ahead," Yellen said in prepared remarks at an international banking seminar in Washington. "My best guess is that these soft readings will not persist."
Trump's top economist says corporate tax cut would boost household incomes
President Trump's Council of Economic Advisers issued a report Monday saying that the Republican plan to cut the corporate tax rate would "very conservatively" boost household income by $4,000 a year. "By inducing higher capital investment, reductions in corporate tax rates increase the demand for workers and heighten their productivity," the council said. The GOP plan seeks to reduce the corporate rate to 20 percent, from 35 percent. The council's leader, economist Kevin Hassett, has argued in academic work that high corporate tax rates hold down worker income. The paper says the median American household making just under $60,000 a year would earn $3,000 to $7,000 more with the rate cut. Other researchers have said they doubt corporations would share tax savings with workers.
Kaepernick files grievance against NFL owners
Former San Francisco 49ers quarterback Colin Kaepernick, now a free agent with no team, has filed a grievance against the NFL, alleging that the league and its owners have kept him off the field because he started the NFL protests against police brutality by kneeling during the National Anthem. Attorney Mark Geragos has sent a copy of his complaint to the NFL, all 32 teams, and the NFL Players Association, saying they "have colluded to deprive Mr. Kaepernick of employment rights in retaliation for Mr. Kaepernick's leadership and advocacy for equality and social justice and his bringing awareness to peculiar institutions still undermining racial equality in the United States." Kaepernick, whose filing demands an arbitration hearing, left the San Francisco 49ers in March.