The daily business briefing: October 19, 2020
China's economy grew by 4.9 percent last quarter, Pelosi remains optimistic and Trump calls for "bigger" stimulus, and more
China GDP grew by 4.9 percent in 3rd quarter
China's gross domestic product grew by 4.9 percent in the third quarter compared to the same period last year, the Chinese government reported Monday. The growth fell short of expectations but put the world's second largest economy closer to the 2020 growth forecasts of 5.5 percent to 6 percent that were made before the coronavirus pandemic spread, causing global economic devastation and more than a million deaths. China's economy grew by 3.2 percent in the second quarter after a historic 6.8 percent contraction in the first quarter of 2020, during which large areas in China were shut down after the initial coronavirus outbreak in the central Chinese city of Wuhan. The International Monetary Fund projects 1.9 percent expansion in China overall in 2020, which would make it the only major economy to post growth this year.
Pelosi optimistic about stimulus deal, Trump calls for 'bigger number'
House Speaker Nancy Pelosi (D-Calif.) said Sunday that she remained optimistic that Democrats would reach a deal with the Trump administration on a new round of coronavirus relief before the November election, despite stubborn disagreements on what to include in the package. Pelosi acknowledged that she had given White House negotiators 48 hours to address the sticking points, but said it was possible to strike a deal because "we've been back and forth on all of this." President Trump told reporters that he wants a "bigger number" than Pelosi wants. The White House proposed a $1.8 trillion stimulus package, but Pelosi rejected it as inadequate. The Democrat-controlled House has passed a $2.2 trillion package.
Judge blocks Trump effort to end food stamps for 700,000
A federal judge on Sunday blocked the Trump administration's effort to end food stamp benefits for nearly 700,000 unemployed people. Chief U.S. District Judge Beryl Howell of Washington, D.C., called the administration move an "arbitrary and capricious" attempt to cut the federal food safety net, especially during a pandemic that has sent unemployment soaring and increased the number of people counting on the Supplemental Nutrition Assistance Program by more than six million, or about 17 percent. The rule "at issue in this litigation radically and abruptly alters decades of regulatory practice, leaving states scrambling and exponentially increasing food insecurity for tens of thousands of Americans," Howell wrote in the scathing ruling. The case was filed by a coalition of 19 states, Washington, D.C., New York City, and private groups.
Stocks gain despite ongoing stalemate over coronavirus stimulus
U.S. stock index futures gained early Monday despite ongoing uncertainty over a new round of coronavirus relief and rising infections. Futures for the Dow Jones Industrial Average rose by 0.7 percent, while those of the S&P 500 and the tech-heavy Nasdaq were up by 0.8 percent and 1.1 percent, respectively, several hours before the opening bell. The Dow and the S&P 500 fell in three consecutive sessions last week, but made modest gains on Friday. "The many cross-currents we have been fretting over in recent weeks remain omnipresent," said Sherif Hamid, a strategist at Jefferies, in a note. "The U.S. elections are close at hand, fiscal stimulus remains a key near-term potential catalyst, and developments on the virus front remain critical to the longer-term outlook."
FedEx and UPS warn of holiday shipping crunch
FedEx Corp. and United Parcel Service have warned big clients that their shipping capacity is already maxed out for the coming holiday season, so any pickups will be delayed for any added trailers with holiday orders, The Wall Street Journal reported Sunday, citing consultants and retailers. "There will be days within the holiday season where the industry will be over capacity," FedEx Chief Marketing Officer Brie Carere told the newspaper. Retailers have started looking for alternatives, but smaller carriers, including LaserShip and DHL eCommerce Solutions, also are fully booked for the holidays earlier than usual. Another option, the U.S. Postal Service, is financially strapped and overburdened as it faces a flood of November election ballots.