The daily business briefing: November 8, 2018
Stocks rise in a sign of post-election relief, China's exports beat expectations despite the U.S. trade war, and more
- 1. U.S. stocks gain on post-election relief
- 2. China exports beat expectations despite tariffs
- 3. Health and cannabis stocks boosted by election results
- 4. Trump administration issues rules seeking to let employers deny birth control coverage
- 5. Tesla names board member Robyn Denholm to replace Elon Musk as chairman
1. U.S. stocks gain on post-election relief
The Dow Jones Industrial Average surged by 545 points or 2.1 percent on Wednesday, signaling investor relief after the midterm elections ended with a divided Congress as expected. The S&P 500 also rose by 2.1 percent, and the Nasdaq Composite jumped by 2.6 percent. It remains to be seen how President Trump will approach governing in a divided Washington. World stocks mostly gained for an eighth straight day on Thursday, buoyed by encouraging economic data from China and relief over the results in the U.S. midterms. Traders are looking next for news from the Federal Reserve, which concludes a two-day policy meeting on Thursday. The U.S. central bank is expected to keep interest rates unchanged but signal the economy remains on a track that will justify the next rate hike in December.
2. China exports beat expectations despite tariffs
China on Thursday reported October exports and imports that exceeded forecasts despite new U.S. tariffs, rising 16 percent over the same month last year. The data came as a surprise because October was the first full month since the Trump administration escalated its trade war against China by starting to collect new tariffs on $200 billion of Chinese imports. One reason for the rise was that some exporters were rushing through U.S. orders to avoid higher future levies. Economists expect China's export growth to slow through the end of the year. China showed a $31.8 billion trade surplus with the U.S., down from a record $34.1 billion in September. China's total surplus with the U.S. so far this year reached $258 billion.
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3. Health and cannabis stocks boosted by election results
Health insurance stocks rose sharply on Wednesday as investors bet that Republicans would not be able to repeal the Affordable Care Act after Democrats seized control of the House in Tuesday's midterm elections. UnitedHealth, the biggest insurer, gained 4.2 percent; Anthem rose by 6.6 percent; and HCA, the largest hospital company, jumped by 4.7 percent. The health law, commonly referred to as ObamaCare, expanded health insurance to millions of Americans, boosting the health-care industry. Cannabis companies also gained on Wednesday after several states voted to partly legalize marijuana. Shares of New Age Beverages Corp., which is expanding into cannabis products, rose by 20.1 percent. U.S. shares of Canadian companies Canopy Growth Corp., Aurora Cannabis Inc., and Cronos Group Inc. gained between 8 and 10 percent.
4. Trump administration issues rules seeking to let employers deny birth control coverage
The Trump administration issued federal rules on Wednesday letting some employers deny insurance coverage of birth control if they object to it for religious or moral reasons. The Obama administration interpreted the Affordable Care Act as requiring the coverage at no charge to consumers because birth control qualified as an essential health benefit. The Trump administration a year ago proposed getting around the mandate with a rule change as part of its response to social conservatives who called the Obama-era policy a violation of "religious liberty." The draft rules sparked immediate protests from Democrats, state attorneys general, civil liberty groups, and women's rights advocates. Federal judges in Pennsylvania and California have granted nationwide injunctions against the proposals while they consider lawsuits filed by attorneys general, so the new rules are in limbo.
5. Tesla names board member Robyn Denholm to replace Elon Musk as chairman
Tesla late Wednesday named board member Robyn Denholm as its new chairman, replacing CEO Elon Musk as the board's leader. The announcement came ahead of a Nov. 13 deadline to install a new board leader under Musk's settlement with the Securities and Exchange Commission to end claims he misled investors by tweeting he had lined up investors to possibly take the electric car maker private. Musk had served as chairman since Tesla's early days. Denholm, the chief financial officer of Australian telecommunications firm Telstra Corp., has been on the board since 2014, but is considered less closely tied to Musk than other board members.
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Harold Maass is a contributing editor at The Week. He has been writing for The Week since the 2001 debut of the U.S. print edition and served as editor of TheWeek.com when it launched in 2008. Harold started his career as a newspaper reporter in South Florida and Haiti. He has previously worked for a variety of news outlets, including The Miami Herald, ABC News and Fox News, and for several years wrote a daily roundup of financial news for The Week and Yahoo Finance.
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