The daily business briefing: October 9, 2019

Harold Maass
The ToysRUs sign
Araya Diaz/Getty Images


Stocks poised to rebound after latest signs of U.S.-China tensions

U.S. stock index futures rebounded early Wednesday after Tuesday's big losses. The rebound followed a Bloomberg report that a Chinese official had said Beijing was open to a partial deal to wind down the U.S.-China trade war. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up by 0.8 percent or more. All three of the main U.S. indexes dropped sharply on Tuesday as news that the Trump administration had imposed visa restrictions on some Chinese officials further eroded hopes for progress in the U.S.-China trade talks scheduled to start Thursday. The U.S. also blacklisted a group of China's top artificial intelligence firms over their association with China's treatment of ethnic minorities, and China warned it would retaliate. [Bloomberg, CNBC]


Target partnership to revive ToysRUs website

Target announced on Tuesday that it would partner with TRU Kids, parent of the Toys R Us brand, to relaunch The move will give Toys R Us an online shopping presence as it starts opening its first new U.S. stores since its bankruptcy and shutdown. Online shoppers who click "buy" on a product at will be redirected to Target to complete the purchase. The companies declined to say how much of each sale would go to Target and how much would go to Toys R Us. TRU Kids CEO Richard Barry said his company chose to team up with Target because it already had a strong toy business and supply chain, giving it an impressive "understanding of the [toy] category." [CNBC]


Powell: Fed 'soon' to buy more Treasurys to shore up reserves

Federal Reserve Chairman Jerome Powell said Tuesday that the central bank will "soon" resume purchases of Treasury securities to increase banking reserves in the financial system, providing protection against volatility like last month's interest rate spike. He said the move should not be confused with the quantitative easing the Fed used during the financial crisis to pump money into the economy. Powell noted that U.S. job growth had not been as strong as anticipated in the last year. Analysts took that remark as a sign that the Fed could continue cutting interest rates to keep a record-long run of economic growth alive. "Where we had seen a booming job market, we now see more-moderate growth," Powell said at an economic conference in Denver. [The Associated Press, Bloomberg]


U.S. blocks goods to send message about use of forced labor

The Trump administration has blocked shipments from a Chinese company that makes baby pajamas sold at Costco due to allegations that ethnic minorities at internment camps were being forced to sew the clothes, The Associated Press reported Tuesday. The U.S. also is blocking rubber gloves sold by industry leader Ansell to U.S. surgeons, mechanics, and scientists, after accusing a Malaysian manufacturer of employing migrants from Bangladesh, Nepal, and other countries struggling to pay off exorbitant recruitment fees. The U.S. also stopped imports of diamonds from Zimbabwe, gold from eastern Democratic Republic of Congo, and bone charcoal from Brazil that U.S. companies use to remove contaminants from water. Customs officials said the crackdown should put exporters on notice to improve labor conditions. [The Associated Press]


Study: Richest Americans paid lower effective tax rate than middle class

A new study by University of California at Berkeley economists found that America's richest billionaires paid a lower overall tax rate than the bottom half of U.S. households in 2018, for the first time in U.S. history. The report, The Triumph of Injustice by economists Emmanuel Saez and Gabriel Zucman, examined not just income taxes, but also state and local taxes and "indirect taxes," such as motor vehicle and business licenses, to provide the first such in-depth analysis of effective tax rates since the 1960s. The study determined that the nation's richest 400 families paid a 23 percent effective tax rate, while those in the bottom half paid 24.2 percent. In 1960, the wealthiest families had an effective tax rate as high as 56 percent. [The Washington Post]