The daily business briefing: November 28, 2018

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1. Trump threatens to strip GM's electric-car subsidies
2. Trump and leading GOP lawmakers meet to discuss averting shutdown
3. Home-price growth rate slows once again
4. Kudlow comments boost optimism on easing of trade tensions
5. Trump blames Fed's rate hikes for stock troubles, GM layoffs

published 28 November 2018

1. Trump threatens to strip GM's electric-car subsidies

President Trump on Tuesday threatened to cut General Motors' government subsidies, including those for electric cars, due to the automaker's decision to close several North American plants and lay off thousands of workers. "Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland," Trump tweeted. "Nothing being closed in Mexico & China. The U.S. saved General Motors, and this is the THANKS we get!" GM shares fell by 3.5 percent after Trump's criticism. GM and its subsidiaries have received $7.6 million in government grants and tax credits so far this year, although the $7,500 plug-in tax credit goes to the consumer, not GM.

President Trump and leading Republican lawmakers met Tuesday at the White House to discuss a spending deal to beat a deadline to avert a partial government shutdown in 10 days. Trump wants $5 billion in funding for his promised wall on the Mexico border, and said it could be a "good time" for a shutdown if he doesn't get it. House Republicans pushed approval for the $5 billion through a key committee, but the Senate's bipartisan bill includes just $1.6 billion for the border. House Majority Leader Kevin McCarthy called the Tuesday meeting "very productive."

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U.S. home price growth has slowed for the sixth straight month, Standard & Poor's said Tuesday. The S&P CoreLogic Case-Shiller national home price index showed a 5.5 percent annual gain in September, down from 5.7 percent in August. "Home prices plus data on house sales and construction confirm the slowdown in housing," said David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices. Goldman Sachs declared in a research note last week that the post-2012 home-price boom was over.

The Dow Jones Industrial Average and the S&P 500 edged higher on Tuesday, adding to big Monday gains fueled by Cyber Monday sales that included Amazon's biggest selling day ever. The Dow and the S&P rose by 0.4 percent and 0.3 percent, respectively. The Nasdaq Composite closed just above even. All three indexes rose further early Wednesday. The market got a lift Tuesday when President Trump's top economic adviser, Larry Kudlow, expressed optimism that the U.S. and China will make progress toward easing trade tensions. Trump meets with Chinese President Xi Jinping later this week in Argentina, and ahead of the talks the White House is having "a lot of communication with the Chinese government at all levels." Kudlow later said Trump sees a "good possibility" the two countries can reach an agreement.

President Trump on Tuesday blamed recent stock market declines and General Motors' newly announced layoffs and plant closures on the Federal Reserve, which he has repeatedly criticized for raising interest rates. "They're making a mistake because I have a gut, and my gut tells me more sometimes than anybody else's brain can ever tell me," Trump said in an interview with The Washington Post. He also said he was "not even a little bit happy" with his hand-selected central bank chairman, Jerome Powell. The Fed chair will speak to the Economic Club of New York on Wednesday. Markets could react to any hints on when the Fed will slow its rate increases, which have raised borrowing costs for consumers and businesses.

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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.