The daily business briefing: May 22, 2019

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Harold Maass
Theresa May walks from 10 Downing Street
DANIEL LEAL-OLIVAS/AFP/Getty Images
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1.

China automaker delays U.S. launch over trade tensions

Chinese automaker GAC Motor announced Tuesday it had put off its launch in the U.S. due to U.S.-China trade tensions. "The current relationship between the U.S. and China, the trade war, the relationship is uncertain," said Hebin Zeng, president of international at GAC Motor. "We postponed the plan to enter the North American market." Zeng said the company, which had planned to enter the U.S. this year, would continue monitoring the situation to decide when to take its vehicles to market in the U.S. The company is continuing its expansion in other international markets, including the Middle East. [CNBC]

2.

May offers 2nd Brexit referendum in bid to pass her plan

U.K. Prime Minister Theresa May, whose plan for leaving the European Union has been rejected three times by Parliament, told British lawmakers on Tuesday that her "new Brexit deal" would give members of Parliament a chance to vote on holding a second referendum on whether to leave the EU at all. There's just one condition: MPs have to vote for May's EU-approved deal first. May will push for a vote on her fourth and likely final Brexit plan in June. As well as the offer of a second referendum, May added pledges on workers' rights, environmental provisions, and other elements to sweeten the package, which also contains the central provisions in the old Brexit deal she negotiated with the EU. [Reuters, CNN]

3.

Target shares jump after strong quarterly report

Target shares jumped by 7 percent in pre-market trading on Wednesday after the retailer reported quarterly earnings and sales that beat expectations. Target said adjusted earnings per share came in at $1.53, topping consensus expectations of $1.43 reported by Refinitiv. The company said revenues hit $17.63 billion, beating expectations of $17.52 billion, and same-store sales rose by 4.8 percent, compared to an expected 4.2 percent. Target's e-commerce sales soared by 42 percent as customers took greater advantage of curbside pickup for online purchases. CEO Brian Cornell said the company was "well-positioned to deliver strong financial performance in 2019 and beyond." [CNBC]

4.

Draft IRS memo says presidential tax returns must be given to Congress

A confidential draft Internal Revenue Service legal memo says any administration must turn over tax returns to Congress unless the president invokes executive privilege, The Washington Post reported on Tuesday, citing a copy of the memo it obtained. The memo contradicted Treasury Secretary Steven Mnuchin's reason for refusing to hand over President Trump's returns, which House Ways and Means Chair Richard Neal (D-Mass.) has formally requested. Mnuchin declined to give Neal the returns because, he said, Congress had no "legitimate legislative purpose" for demanding the documents. The draft IRS memo, which wasn't signed, said that under a 1924 law, disclosing the returns was "mandatory" if requested by chairs of tax-writing committees. The IRS said the memo did not represent the agency's "official position." [The Washington Post]

5.

Stock futures edge down ahead of Fed minutes

U.S. stock index futures slipped early Wednesday as investors rattled by ongoing U.S.-China trade tensions waited for the minutes from the Federal Reserve's latest policy meeting. Futures for the Dow Jones Industrial Average and the S&P 500 were down by about 0.2 percent, while those of the Nasdaq dropped by 0.4 percent. The minutes from the Fed's April 30-May 1 meeting come out at 2 p.m. Eastern Time. Investors are worried that the U.S.-China tariff war could hurt global economic growth, and some analysts believe signs of economic weakness and low inflation could prompt the Fed to reduce interest rates. [MarketWatch]