The daily business briefing: December 17, 2019
1.
Boeing has decided to temporarily halt production of its 737 MAX jet, which has been grounded since March after the second of two fatal crashes. The accidents, which occurred in Indonesia and Ethiopia, killed 346 people. Boeing has continued to build the planes since the grounding, and now has a backlog of 400 of the aircraft with no planned date for the planes to return to the skies. Airlines and government officials expect the planes to be cleared to fly in February or later. Boeing is aiming to suspend production in January, although it has no immediate plan to lay off any of workers. Boeing's 737 assembly plant in Washington employs 12,000 people with thousands more jobs in its supply chain. [The Wall Street Journal]
2.
Tyson Foods has received approval to export poultry to China from its 36 U.S. processing plants, Reuters reported Monday, citing a chief supply chain officer for the company. Beijing banned imports of U.S. poultry and eggs in January 2015 due to an avian flu outbreak. At the time, U.S. producers were selling about $500 million worth of poultry products to China annually. U.S. chicken producers have been hoping to get the sales going again since Beijing last month lifted a five-year ban on imports as the country seeks alternatives to pork after a deadly hog disease drove up prices. Sales of chicken feet, wing tips, and legs could boost U.S. agricultural exports to China, a priority for the Trump administration in its trade negotiations with Beijing. [Reuters]
3.
U.S. stocks climbed to record highs on Monday, buoyed by rising optimism about a U.S.-China trade deal and strong economic data from China, the world's second largest economy. The Dow Jones Industrial Average closed up by 0.4 percent, while the S&P 500 and the Nasdaq gained 0.7 percent and 0.9 percent, respectively. The S&P 500 and the Nasdaq have set records in three straight days. The "phase one" U.S.-China trade deal came in time to head off new tariffs that would have affected consumer products, including Apple's iPhone. Apple shares rose by 1.7 percent, helping to lift the S&P 500 and the Nasdaq. Chipmakers also gained. U.S. stock index futures struggled for footing early Tuesday, fluctuating between slight gains and losses before the opening bell. [Reuters, CNBC]
4.
Congressional negotiators on Monday unveiled a $1.37 trillion federal spending bill aiming to avert a partial government shutdown. Congress is expected to pass the compromise, with the House voting Tuesday and the Senate later in the week. The proposal includes $25 million for federal gun violence research, a 3.1 percent pay raise for civilian federal employees, and the repeal of several Affordable Care Act taxes, The Washington Post reports. President Trump's border wall will receive $1.375 billion in funding, but the administration will have the ability to take funds from other accounts. The legislation includes $7.6 billion in funding for the 2020 Census, $425 million in election security grants, and a $22 billion boost in Pentagon funding, while also increasing the age for purchasing tobacco products from 18 to 21. [The Washington Post]
5.
European stocks retreated from record highs on Tuesday and the British pound fell by more than 1 percent due partly to renewed fears of a possible hard Brexit. The losses followed reports by local media that the government of Prime Minister Boris Johnson, newly strengthened by last week's election landslide, was preparing a bill that would rule out extending the transition period for the country's departure from the European Union past 2020. The U.K. is heading for a Jan. 31 departure from the EU. That would leave just 11 months to finalize terms under the new Brexit bill, raising the likelihood of a harder Brexit. [MarketWatch, CNBC]
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