×

The daily business briefing: August 21, 2019

Image
Harold Maass
The E.U. rejects Boris Johnson's request to revise the proposed Brexit deal
Domininc Lipinski - WPA Pool/Getty Images
The daily business briefing newsletter
Your free email newsletter subscription is confirmed. Thank you for subscribing!

1.

Trump confirms talk of a payroll tax cut

President Trump on Tuesday confirmed reports that he's considering a payroll tax cut. "Payroll taxes is something that we think about, and a lot of people would like to see that," Trump said. "That very much affects the workers of our country." Any such tax cut would have to be approved by Congress. Trump's comments came after White House officials denied there had been any discussions about reducing taxes that fund Medicare and Social Security in an effort to boost the slowing economy. White House spokesman Hogan Gidley in a Fox News interview on Tuesday morning said a payroll tax cut is "not being considered at this time." White House officials also dismissed reports citing warning signs of a possible recession, and said the economy is strong. [CBS News, The New York Times]

2.

E.U. rejects Johnson on proposed Brexit change

The European Union on Tuesday rejected U.K. Prime Minister Boris Johnson's latest request to scrap the Irish border backstop from a new withdrawal agreement. Johnson reportedly sent European Council President Donald Tusk a letter detailing alternative methods ahead of the Oct. 31 Article 50 deadline, but Tusk was having none of it, maintaining that the continuation of an open border in Ireland is vital. He said that Johnson offered no viable options for preventing a hard border from arising, while the EU dismissed Johnson's argument that the backstop was anti-democratic. Johnson said he still believes a deal can be reached before the deadline, though he has not relented on the necessity of the backstop's removal from negotiations. [The Guardian]

3.

Hasbro to scrap plastic packaging by late 2022

Toy maker Hasbro announced Tuesday that it would eliminate plastic from packaging for new products by the end of 2022. The company said it would stop using plastic bands, elastic bands, and other material using plastics, including the shrink wrap it has long used on board games such as Monopoly and Scrabble. Hasbro said it would continue using plastic in Mr. Potato Head and other toys, but that it is testing alternative materials that would be safe and look the same. The company has a program that lets people send in toys such as GI Joes for recycling. Plastic is increasingly being targeted as a threat to the environment because it doesn't disintegrate and winds up in landfills. Many companies have stopped using plastic straws, and some cities and states have moved to ban plastic bags. [The Associated Press]

4.

Regulators advance change easing Volcker Rule

U.S. banking regulators on Tuesday approved changes to the so-called Volcker Rule, a post-financial-crisis reform restricting banks that accept taxpayer-insured deposits from conducting proprietary trading. The Volcker Rule was enacted under the Dodd-Frank Wall Street Reform and Protection Act to prevent banks from investing their own money in hedge funds and other risky investments. Banks, including Goldman Sachs and JPMorgan Chase, have called the rule cumbersome and lobbied for changes. The change would give banks more leeway and narrow the definition of banned trading. Democrats and consumer advocates say tweaking the Volcker Rule could expose taxpayers to financial risk. The Federal Reserve and the Securities and Exchange Commission still must sign off on the change. [Reuters, CNBC]

5.

Stock futures rise after end of three-day winning streak

U.S. stock index futures rose early Wednesday, pointing to a higher open after Tuesday's losses snapped a three-day winning streak. Futures for the Dow Jones Industrial Average were up by 0.6 percent, while those of the S&P 500 and the Nasdaq rose by 0.7 percent. The three main U.S. indexes all closed down Tuesday after three straight days of gains as bond yields stabilized after a decline that had fueled fears of a looming recession. On Wednesday, investors will be dissecting the minutes from the last Federal Reserve meeting for clues on the U.S. central bank's next moves on monetary policy following a July interest-rate cut. Target shares jumped 15 percent in pre-market trading after the retailer reported better-than-expected quarterly profit. [CNBC]