The daily business briefing: August 15, 2019
A recession warning sign sends stocks diving, the Trump administration proposes a religious exemption for contractors, and more

- 1. Stocks dive after bond market flashes recession warning sign
- 2. Trump administration proposes religious exemption for contractors
- 3. China threatens counter measures for latest Trump tariffs
- 4. Argentina's Macri announces relief for low-income workers
- 5. U.S. tries to seize Iranian oil tanker detained in Gibraltar

1. Stocks dive after bond market flashes recession warning sign
U.S. stocks suffered their worst plunge of 2019 on Wednesday after the yield for long-term U.S. bonds fell below that of short-term bonds, a strong warning sign of a looming recession. It was the first such "inverted yield curve" since just before the Great Recession more than a decade ago. Such inversions, which indicate dwindling investor confidence in the economy, have come before every recession in the last half century. "Investors are tripping over themselves to get out of the way," said Chris Rupkey, chief financial economist at MUFG Union Bank. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all lost roughly 3 percent on Wednesday. Futures for the main U.S. stock indexes gave back early overnight gains after China vowed to respond to new U.S. tariffs.
2. Trump administration proposes religious exemption for contractors
The Trump administration on Wednesday proposed a rule offering federal contractors a religious exemption giving them greater leeway to hire and fire workers without being accused of discrimination. The Labor Department said the change being published in the Federal Register on Thursday would let companies "make employment decisions consistent with their sincerely held religious tenets and beliefs without fear of sanction by the federal government." Some religious organizations said the rule clarified rights they already have under current law. Advocacy groups said the rule would give religious organizations and private companies permission to discriminate against LGBT people, single mothers, and others. "This is taxpayer-funded discrimination in the name of religion. Period," the American Civil Liberties Union tweeted.
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3. China threatens counter measures for latest Trump tariffs
China's finance ministry said Thursday that Beijing must come up with measures to counter President Trump's latest tariffs, saying the latest levies "seriously violated the consensus" the two countries' leaders reached in an effort to settle their trade war. The U.S. announced this month that it would impose a 10 percent tariff on $300 billion worth of Chinese imports starting Sept. 1, although Trump has decided to delay until mid-December the duties on some of the items, including cellphones and laptops, to avoid hurting crucial holiday sales. News of China's plan for countermeasures weighed on global markets. "Retaliation by China means escalation in tensions, and diminishes the chances of a positive outcome in the near term," said Neil Wilson, chief market analyst at Markets.com.
4. Argentina's Macri announces relief for low-income workers
Argentine President Mauricio Macri on Wednesday proposed welfare subsidies and tax cuts to help lower-income workers weather the South American nation's economic crisis. Macri faces re-election later this year, and he was hit hard in a weekend primary by voters angry about his austerity measures and the weak economy. He now is proposing cutting taxes for two million workers by $33 per month, and giving subsidies of $17 per child to unemployed parents by the end of the year. Macri belongs to one of the country's wealthiest families. He took office in 2015 vowing to fight corruption and open the economy, but it has slipped into recession. Inflation is at 55 percent and the country's currency, the peso, is collapsing.
5. U.S. tries to seize Iranian oil tanker detained in Gibraltar
The U.S. took steps Thursday to seize an Iranian supertanker that British marines and Gibraltar port officials seized last month for allegedly violating international sanctions on shipments of Iranian oil. The U.S. move came as authorities in the U.K. and Gibraltar tried to dial back tensions over the incident. Gibraltar freed the ship's Iranian crew on Thursday. The semi-autonomous British overseas territory's top court delayed a decision on whether to release the ship, the Grace 1, after the U.S. Justice Department pushed to extend the vessel's detention. "The U.S. Department of Justice has applied to seize the Grace 1 on a number of allegations which are now being considered," the Gibraltar government said in a statement.
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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.
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