FINANCIAL MARKETS
China concerns weigh on investors
UNDATED (AP) — Asian shares are mostly lower as concerns about China chip away at investor optimism after a mixed finish on Wall Street.
Benchmarks fell in Japan, Australia and South Korea, but rose in Hong Kong and Shanghai. A power crunch in some areas of China has shut down factories and left some households without electricity under an effort to meet official energy use targets. Another lingering market worry resonating from China is the possible collapse of one of China’s biggest real estate developers Evergrande. Investors were taking a wait-and-see stance in Tokyo ahead of Wednesday’s vote for the leader of Japan’s ruling Liberal Democratic Party.
POWELL-YELLEN-CONGRESS
Powell says spike in inflation lasting longer than expected
WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell is preparing to tell Congress that the current spike in U.S. inflation has proven to be larger and more long-lasting than expected. But he is due to say that if inflation does not abate, the Fed is ready to use its tools to lower the pressure on prices.
Powell’s comments came in remarks the Fed chief is scheduled to deliver Tuesday when he appears with Treasury Secretary Janet Yellen at an oversight hearing on the government’s massive support programs passed to deal with the COVID pandemic. The Fed made Powell’s remarks public late Monday.
Powell is expected to face tough questions about inflation, especially from Republican lawmakers, who are warning that the country could be seeing the type of runaway inflation not seen since the 1970s.
Consumer prices in recent months have been posting 12-month gains as high as 5.4%, a rate not seen since 2008.
Powell said that the unprecedented process of reopening the economy after the COVID shutdowns has resulted in a number of problems that could continue in coming months.
FEDERAL RESERVE-KAPLAN
2 top Fed officials retire in wake of trading disclosures
WASHINGTON (AP) — In a rare moment of ethical controversy for the Federal Reserve, two top officials resigned Monday in the wake of revelations about their financial trading that exposed potential shortcomings in the Fed’s rules on investments. Eric Rosengren, the president of the Federal Reserve Bank of Boston, said he would step down this week for health reasons, while Robert Kaplan, the president of the Dallas Fed, said he would resign Oct. 8 to avoid becoming a “distraction” from the Fed’s broader mission.
The two officials’ financial disclosures sparked criticism from government watchdogs after they revealed extensive stock trading in 2020, when the Fed was spending trillions of dollars stabilizing financial markets and boosting the economy. Because of their trading, the two officials could potentially have profited from the Fed’s actions.
Though the investments by Rosengren and Kaplan were permitted under the Fed’s rules, they raised at least the appearance of conflicts of interest, which Fed policy discourages. Sen. Elizabeth Warren, a Massachusetts Democrat, sharply criticized the trades and called for a ban on stock ownership by Fed officials.
RADICAL RIGHT-CRYPTOCURRENCY
Far-right cryptocurrency follows ideology across borders
BRUSSELS (AP) — An Associated Press investigation has found that far-right provocateurs are raising millions in cryptocurrency from around the world.
Among the most active is the founder of the Daily Stormer website, Andrew Anglin, who has tapped a global network of supporters to take in at least 112 Bitcoin since January 2017, worth about $4.8 million today. That’s according to data shared with AP by the cryptocurrency analytics firm Chainalysis. The AP investigation found that Anglin and others banished from mainstream financial institutions are using cryptocurrency in increasingly sophisticated ways to evade detection.
FORD-ELECTRIC VEHICLES-JOBS
Ford to add 10,800 jobs making electric vehicles, batteries
GLENDALE, Ky. (AP) — Ford and a partner company say they plan to build three major electric-vehicle battery factories and an auto assembly plant by 2025 — a dramatic investment in the future of EV technology that will create an estimated 10,800 jobs and shift the automaker’s future manufacturing footprint toward the South.
The factories, to be built on sites in Kentucky and Tennessee, will make batteries for the next generation of Ford and Lincoln electric vehicles that will be produced in North America. Combined, they mark the single largest manufacturing investment the 118-year-old company has ever made and are among the largest factory outlays in the world.
Notably, the new factories will provide a vast new supply of jobs that will likely pay solid wages. Most of the new jobs will be full time, with a relatively small percentage having temporary status to fill in for vacations and absent workers.
Together with its battery partner, SK Innovation of South Korea, Ford says it will spend $5.6 billion in rural Stanton, Tennessee, where it will build a factory to produce electric F-Series pickups. A joint venture called BlueOvalSK will construct a battery factory on the same site near Memphis, plus twin battery plants in Glendale, Kentucky, near Louisville. Ford estimated the Kentucky investment at $5.8 billion and that the company’s share of the total would be $7 billion.
CALIFORNIA-MINIMUM WAGE-GARMENTS WORKERS
California 1st to require hourly wages in garment industry
SACRAMENTO, Calif. (AP) — California Gov. Gavin Newsom has approved what he terms a nation-leading law requiring the garment industry to pay workers by the hour instead of for each piece of clothing they produce. Supporters said piece-rate compensation can be used to pay workers below the minimum wage.
The bill Newsom signed Monday makes California the first state to eliminate piece work compensation, though there is an exception for worksites covered by collective bargaining agreements. It’s also the first to create liability for companies that subcontract with the garment makers.
The California Chamber of Commerce predicts the law will put some employers out of business or cause them to move out of California.
The measure was among 18 job-related bills signed by Newsom, a Democrat. He also signed a second measure by Durazo requiring that all employees with disabilities be paid at least minimum wage.
California becomes the 13th state to end a practice that allowed businesses with special licenses to pay people with disabilities subminimum wages, according to the State Council on Developmental Disabilities.
It estimated that 12,000 Californians with disabilities who work in so-called sheltered workshops can be paid as little as 15 cents an hour under a federal policy that dates to 1938.
PHILANTHROPIST-LAUREN POWELL JOBS
Laurene Powell Jobs to invest $3.5B in climate group
WASHINGTON (AP) — Philanthropist Laurene Powell Jobs will invest $3.5 billion within the next 10 years to address the climate crisis. A spokesperson for Emerson Collective, Jobs’ organizations, said Monday that Jobs will give the money to Waverley Street Foundation, an organization she set up in 2016.
The spokesperson says the foundation will focus its work on “initiatives and ideas to help underserved communities most impacted by climate change.”
Lisa Jackson, Apple’s vice president of Environment, Policy and Social Initiatives, has been selected to chair the foundation’s board. Jackson served as the head of the U.S. Environmental Protection Agency under former President Barack Obama.
