The daily business briefing: January 17, 2020

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Harold Maass
Products in China
Feng Li/Getty Images

1.

Senate approves new North America trade deal

The Senate on Thursday approved the U.S.-Mexico-Canada Agreement trade deal, passing the bill on for final signature by President Trump. The USMCA replaces the North American Free Trade Agreement, the trade pact the three nations have adhered to since 1994. The new deal was passed in an 89-10 vote. Trump, who has pushed for the USMCA, is expected to sign the deal, leaving only Canada to approve the agreement before it takes effect. The House overwhelmingly passed the deal last month after Democrats secured changes to labor enforcement provisions. Trump's signature trade deal has been in the works for more than a year, and seeks to update NAFTA policies that lawmakers say pushed jobs out of the U.S. [NBC News, CNBC]

2.

China posts 2019 economic growth weakened by trade war

China reported Friday that its economic growth dropped to 6.1 percent in 2019, a year when a trade war with the U.S. hurt exports. The figure was in line with expectations but marked a significant drop from the 6.6 percent growth in the world's second largest economy in 2018, which was already its lowest since 1990. Economists expect the first phase of a U.S.-China trade deal to end the countries' damaging tit-for-tat tariffs to help improve the picture moving forward, and China is planning fresh efforts to stimulate investment and consumer demand. The deal "is a signal that the situation is unlikely to deteriorate," said Chaoping Zhu of J.P. Morgan Asset Management in a report. China's economy also has suffered from weakening domestic consumption as people worried about the trade war and job losses delayed big purchases. [The Associated Press, Reuters]

3.

Google joins the trillion-dollar club as shares rise

Google shares rose by 0.9 percent on Thursday, making the tech giant the fourth U.S. company to reach a market value of $1 trillion. Apple, Microsoft, and Amazon achieved the feat first, although Amazon has retreated to about $930 billion. With Facebook thrown into the mix, the five biggest U.S. tech companies now have a total value of $5.2 trillion, which represents 17 percent of the S&P 500. Five years ago, they accounted for 11 percent of the U.S. blue-chip index. The gains have come as investors attracted by the tech giants' rising dominance shrugged off anti-competition inquiries and calls from some politicians to break up massive tech companies. [CNBC]

4.

14 states sue over rule on food stamp work requirements

Fourteen states, the District of Columbia, and New York City filed a lawsuit on Thursday against the Agriculture Department's plan to tighten work requirements on food stamp recipients. The suit accuses the USDA of wrongly limiting states' authority to exempt some people from work requirements for longer periods depending on local job opportunities. "Under well-settled law, the executive branch does not get to go forth with policies that Congress specifically rejected," District of Columbia Attorney General Karl Racine said. Congress avoided making broad changes to the Supplemental Nutrition Assistance Program after a tough partisan battle over the 2018 farm bill, but the Trump administration last year tried to tighten the program, saying it should encourage people to be self-sufficient when the economy is doing well. [Politico]

5.

Stock futures gain further after 3 main indexes close at record highs

U.S. stock index futures gained early Friday after China said its economy grew by 6.1 percent in 2019, in line with expectations. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq all were up by about 0.3 percent several hours before the opening bell. All three of the main U.S. indexes surged on Thursday, hitting new records the day after the U.S. and China signed a "phase one" agreement toward ending their trade war. The Dow gained 0.9 percent, while the S&P 500 and the Nasdaq rose by 0.8 percent and 1.1 percent, respectively. The Senate's approval of a new trade deal between the U.S., Mexico, and Canada also lifted sentiment. [CNBC, MarketWatch]