The daily business briefing: July 11, 2019

Harold Maass
The NYSE traders
Spencer Platt/Getty Images
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Fed Chair Powell signals interest-rate cut, boosting stocks

Federal Reserve Chair Jerome Powell on Wednesday suggested in testimony to the House Financial Services Committee that the central bank could cut interest rates soon to boost the economy. The economy is strong, especially the job market, but President Trump's trade war with China and signs of a global slowdown could threaten America's record-long economic expansion, Powell told lawmakers, indicating the Fed might cut rates in late July. Powell's comments sent U.S. stocks rising, with the S&P 500 briefly rising above 3,000 for the first time. The Fed hasn't cut rates since reducing them to near zero to help the economy recover from the 2008-2009 financial crisis. U.S. stock index futures made further gains early Thursday ahead of Powell's testimony before the Senate Banking Committee. [The New York Times, CNBC]


Oil prices rise as storm threatens production in Gulf of Mexico

U.S. oil futures jumped by 4.5 percent to $60.43 a barrel on Wednesday as potential Tropical Storm Barry, which is expected to form by Thursday, threatened to disrupt crude oil production in the Gulf of Mexico. The close marked a seven-week high, and the first time futures have gone above $60 since May 22. Personnel have been evacuated from 15 production platforms and four rigs in the Gulf, according to the U.S. Bureau of Safety and Environmental Enforcement. Three other rigs have been moved. Oil prices also got a lift from a report by the American Petroleum Institute and the Energy Information Administration that crude oil inventories declined last week. [CNN]


Officials warn Congress might have to raise debt limit in September

Congress might have to raise the federal government's debt limit before leaving for recess in August, because lower-than-expected federal revenue could cause the government to run out of money by early September, Treasury Secretary Steven Mnuchin said Wednesday. The comments came two days after the Bipartisan Policy Center, a centrist research organization, estimated the government would run out of cash by September. That could put Congress under great pressure to reach a deal more quickly than it has been able to do in the past. If Congress doesn't reach a deal to raise the debt limit before the money runs out, the government could face an unprecedented default, which could hurt the economy. [The Associated Press]


Lockheed Martin to keep open helicopter plant at Trump's request

Lockheed Martin said Wednesday it would not close its Sikorsky helicopter plant in Coatesville, Pennsylvania, as planned, after coming under pressure from the White House. The aerospace company, which makes the F-35 fighter jet, previously said it would close the plant, which employs 465 people, due to a slump in the helicopter industry. "At the request of President Trump, I ... have decided to keep it open while we pursue additional work," Lockheed Martin quoted CEO Marillyn Hewson as saying via Twitter. Trump praised the move. "We are very proud of Pennsylvania and the people who work there," he tweeted. "Thank you to Lockheed Martin, one of the USA's truly great companies!" [Reuters]


Trump administration investigating French digital tax

The Trump administration said Wednesday it would investigate France's plan for a new tax on U.S. tech giants like Facebook and Google to determine whether it would constitute unfair trade practice. If the Trump administration brands the tax as unfair, it could respond with its latest retaliatory tariffs aimed at protecting U.S. companies abroad. The move is considered likely to increase tensions with the European Union. President Trump already has threatened to hit the EU with auto tariffs. Trump has criticized Europe for selling more to the U.S. than it buys, and said its trade practices are worse than those of China. [The New York Times]