Sentiment in the U.S. rose more than expected this month as consumers felt more confident about current and future economic conditions, according to preliminary data released Friday by the University of Michigan.
The September print on consumer sentiment rose to 92 from 89.8 in August, the university’s Surveys of Consumers data showed. Economists polled by Dow Jones expected sentiment to rise to 91. The current economic conditions index also rose to 106.9 from 105.3.
However, while consumers feel more confident about the economy, worries about the impact of tariffs on the economy increased in early September. Richard Curtin, chief economist for the Surveys of Consumers, said 38% of all consumers made “spontaneous references to the negative impact of tariffs, the highest percentage since March 2018.”
“Those who negatively mentioned tariffs also held more negative views on the overall outlook for the economy as well as anticipated higher inflation and unemployment in the year ahead,” Curtin said.
China and the U.S. have been embroiled in a trade war since last year with both countries slapping tariffs on billions of dollars worth of their goods.
However, sentiment around U.S.-China trade relations improved this week after President Donald Trump said he is open to reaching an interim deal with the Chinese. China will also reportedly exempt some U.S. agricultural products from tariffs.
Stock Exchange has roundly rejected Hong Kong’s $37 billion takeover bid,
saying it was too low, politically risky and lacked strategic merit.
strongly worded statement Friday, LSE’s board said it “unanimously”
rejects this week’s conditional proposal from Hong Kong Exchanges and Clearing
added that it sees “no merit in further engagement” because of the
offer’s “fundamental flaws.” The London exchange said it remained
committed to its acquisition of financial data provider Refinitiv.
had widely expected the HKEX bid to fail, given worries about Chinese influence
over vital financial infrastructure and concerns about reduced competition.
responded in a statement that said it “continues to believe that the
proposed combination … represents a highly compelling strategic
Kong company suggested that it could now make a hostile bid that would allow
investors in LSE to choose between an improved offer and the planned purchase
believes that shareholders in LSE should have the opportunity to analyze in
detail both transactions and will continue to engage with them,” the
Citi said in a research note that they expect a second offer from HKEX that
includes more cash and improved terms. But they warned that regulatory hurdles
still threaten any deal.
chairman Don Robert said the exchange was “surprised and disappointed”
that HKEX (HKXCF) published its “unsolicited proposal within two days of
our receiving it.”
unexpected bid was published Wednesday, suggesting that LSE received the offer
transaction posed serious risks and lacked value for shareholders, Robert said
in a letter addressed to the chairperson and CEO of HKEX.
relationship with the Hong Kong government would “complicate
matters,” making it “highly uncertain” that necessary approvals
would be obtained, Robert said.
Kong government directly appoints half of the HKEX board, according to its
website. And the chairman’s appointment must be approved by Hong Kong’s chief
executive, Carrie Lam.
raised concerns about continued social unrest in Hong Kong, saying the
“ongoing situation” in the territory adds to uncertainty.
shareholders, the proposition was unattractive given that they would be paid
mostly in HKEX shares, Robert said.
see the value of your share consideration as inherently uncertain,” said
Robert. “Furthermore, we question the sustainability of HKEX’s position as
a strategic gateway in the longer term.”
proposal would be a “backward step” for LSE strategically, given the
high geographic concentration of HKEX’s portfolio.
not believe HKEX provides us with the best long-term positioning in Asia or the
best listing/trading platform for China,” he said, noting that LSE values
its current partnership with the Shanghai Stock Exchange.
Even if the
proposal were deliverable, it fell “substantially short” of an
appropriate valuation for a takeover of LSE, “especially when compared to
the significant value we expect to create through our planned acquisition of
Refinitiv,” Robert said.
offer was conditional on LSE terminating its proposed acquisition of Refinitiv,
announced only last month. That £22 billion ($27 billion) deal is aimed at
transforming the LSE into a global markets and information juggernaut to rival
Michael Bloomberg’s financial data empire.
forceful rejection was aimed at discouraging HKEX from pursuing the deal any
further, rather than dissuading a third party from getting involved, Chris
Turner, an analyst at Berenberg told CNN Business.
Berenberg has previously highlighted CME and Intercontinental Exchange, which owns the New York Stock Exchange, as other potential suitors. ICE had previously mulled a bid for LSE in 2016.
will vote later this month on a bipartisan bill that will allow cannabis
businesses access to the federal banking system.
Majority Leader Steny Hoyer intends to bring the SAFE Banking Act to the House
floor for a vote this month, his office confirmed to CNN.
announced at the whip meeting Thursday on Capitol Hill that he would like to
advance the legislation, according to his office.
discussing it with members, but it hasn’t been scheduled just yet,” Mariel
Saez, a spokesperson for Hoyer, told CNN via email.
Banking Act would provide protections for banks that work with marijuana
companies since the substance is still illegal under federal law, despite
several states having legalized medical or recreational marijuana.
Financial Committee voted 45-15 in favor of the bill in June. In May, when
movement on the bill had stalled, a bipartisan group of attorneys general from
33 states and five territories urged Congress to pass it.
a group that has been advocating for the bill, praised Hoyer’s move.
legislation that allows federally regulated financial institutions to enter the
cannabis sector will be a huge step forward,” said Hiro Taylor, director
of business development at Green Bits. “For the sector to reach its full
potential responsibly, all players in it, including federal and state
governments, need to be able to operate with greater transparency, efficiency,
and safety regarding payments. A bill that helps to instill those qualities
into the sector is very much needed.”
bill in the Senate, introduced by Democratic Sen. Jeff Merkley of Oregon and
Republican Sen. Cory Gardner of Colorado, has yet to be voted out of the Senate
committee, however, held a hearing in late July on the challenges faced by the
cannabis industry in banking, and considered the SAFE Banking Act.
Chair Mike Crapo, who does not support the federal legalization of marijuana,
told Politico he would hold a vote on cannabis banking legislation, but he left
open whether he would work off the SAFE Banking Act.
working to try to get a bill ready,” the Idaho Republican said in an
interview published Thursday. “I’m looking to see whether we can thread
“We may craft our own bill or we may work with them to craft any amended
said he looked forward to working with Crapo and Merkley to solve the issue.
Banking Committee hearing in July helped to clarify the challenges created by
the dysfunctional approach our nation has taken to cannabis, and I’m glad the
committee is taking a serious look at this issue I’ve been working to resolve
for years,” Gardner said in a statement from his office.
who support the bill lauded Crapo’s decision.
Merkley is looking forward to having a Senate vote on this important issue
soon, and is grateful to Chairman Crapo for moving the process forward,”
Martina McLennan, a spokesperson for Merkley, said in a statement provided to
said Merkley hopes the committee will use the work he and Gardner have done
“as the starting point for any debate and vote in the Senate.”
Rep. Ed Perlmutter of Colorado, who introduced the House bill, said he welcomes
Crapo’s “commitment to resolve the banking conflicts that have been
created by the misalignment in state and federal law on the issue of
“I remain focused on passing the SAFE Banking Act out of the House and look forward to working with my colleagues in the Senate as they take up the SAFE Banking Act or work to develop and pass similar legislation,” Perlmutter said in a statement Friday.
The numbers: The U.S. federal government posted a budget deficit of $200 billion in August, keeping the U.S. on track to tally a nearly $1 trillion gap in 2019.
The deficit fell almost 7% from $214 billion in the same month a year earlier, according to Treasury figures released Thursday.
What happened: Government spending dipped 1.1% in August to $428 billion compared to a year earlier, while tax receipts rose 4% to $228 billion.
The government collected $7 billion in customs duties in August, bringing the total in fiscal 2019 to $64 billion.
duties have surged after the Trump administration imposed stiff tariffs
on Chinese goods amid an ongoing trade dispute, but the spat has also
contributed to a slowdown in the global and U.S. economies.
By contrast, the U.S. collected $36.7 billion in custom duties through the first 11 months of the prior fiscal year.
Big picture: The budget deficit reached $1.07 trillion in August, but the deficit almost always falls sharply in the last month of the fiscal year in September.
The full-year deficit is expected to total around
$960 billion, based on the most recent estimates from the Congressional
A rising government deficit can lead to higher interest rates, but that hasn’t been the case this year. The yield on the 10-year Treasury yield stands at just 1.79%, well below last year’s peak of 3.23%.
There’s nothing like an empty stomach to focus your mind. That may be
driving the trade talks between the U.S. and China as close to a truce
as they’ve been in months.
China is considering renewed imports of
U.S. products such as soybeans and pig meat which have been under
unofficial embargo as a result of the trade war, Bloomberg News
reported Thursday. That would be a gesture of goodwill ahead of the next
round of bilateral talks and may take the edge off pork prices, which
rose 47% from a year earlier last month.
President Donald Trump
is in a similarly forgiving mood, promising Wednesday night to delay a
slice of tariffs worth about $12.5 billion:
Could we be on the verge of a breakthrough?
are certainly signs that the pressure of recent months is starting to
weigh on both sides. China suffers a perpetual three-year boom-bust
cycle in pork prices, as we’ve written, but this year the effects of
culling animals to stop the spread of African Swine Fever have caused
the biggest price spike since 2011.
Solving the protein shortfall
has clearly been preoccupying the country’s leadership. U.S. pork
imports are restricted because of China’s ban on a feed additive common
in America. Imports of U.S. soybeans, a crucial high-protein ingredient
in animal feed, have also been limited by government diktat, as well as
by the destruction of much of the U.S. crop in floods earlier this
Beijing’s concern extends all the way to Brazil, which
recently overtook the U.S. as the biggest soybean producer and is a
major meat exporter as well. President Jair Bolsonaro is expected to
visit China in October and President Xi Jinping will return the gesture
the following month, Bolsonaro’s vice president said Monday. China also
authorized an additional 25 meat-packing plants for exports, bringing
the total to 89, Reuters reported.
That’s a remarkable love affair
by the standards of Beijing’s prickly diplomacy, as Bolsonaro has gone
out of his way to antagonize China since starting his campaign for the
More changes are afoot just across Brazil’s
southern border. Argentine soy crushers will finally be able to export
soy meal to China after 20 years of talks, Bloomberg News reported this
week. That could mean China-bound shipments for the world’s biggest
exporter of animal feed from early next year.
The way China is moving on agricultural trade with South America suggests Beijing has a long-term plan to reorient its agricultural import dependence toward smaller countries that it has a better chance of dominating diplomatically. At the same time, there’s clearly also a short-term problem around food supplies generally, and taking the foot off the brake on U.S. imports can only help.
The hunger in the U.S. is
more metaphorical, but no less real. The farm belt’s loyal Trump voters
are hurting. Net farm income will increase this year by about 4.8%, the
U.S. Department of Agriculture forecast last month, but the figure would
be in decline were it not for a $5.8 billion increase in direct
government payments, which will amount to about 22% of the $88
billion total income.
Low interest rates over the past decade
have ensured that bankruptcy rates for U.S. farms have remained
relatively subdued, but less catastrophic measures of financial stress
suggest money is getting tight. Working capital in the sector, which was
as high as $165 billion in 2012, is forecast by the USDA to fall to $57
billion this year, its worst level in 11 years of records. As a share
of gross revenues, that’s just 13%, also a record low.
The risk is
that a deepening trade conflict could push things to the point where
government subsidies aren’t enough to support the sector. A gradual
retreat of Chinese demand could hollow out the U.S. farm belt, the
way the trade boom of the 2000s decimated their near-neighbors in the
rust belt. Much of America’s industrial heartland is already
suffering recessionary conditions as the trade war drags on.
revival of the farm-focused deal that the two sides were working on
before talks broke down in May would at least slow China’s pivot away
from dependence on U.S. agricultural exports, and keep up food supplies
to that country’s 1.39 billion people. What this dispute’s been lacking
hunger for a deal. Now we may finally be seeing it.
David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.