Financial and Economic Brief - May 23, 2017by © Liberty Publishing, Inc.
U.S. Stocks Rise
Today, the Dow Jones industrial average rose about 100 points, the S&P 500 rose 0.4%, and the Nasdaq composite grew half a percent. “President Trump's first trip overseas has put some of his domestic troubles on the back burner which should temporarily eliminate some of the headline risk that has frustrated the bulls,” said Jeremy Klein, chief market strategist at FBN Securities. Still two risk factors remain: the North Korea missile test and James Comey’s testimony. “These clouds of uncertainty are not evaporating,” First Standard's Cardillo said. Investors also paid attention to the oil market.
Changing Leadership at Ford Motors
Ford Motors fired CEO Mark Fields because of the company’s falling stock price, down 37% since July 2014, and uncertainty about the future. Former Steelcase CEO Jim Hackett, head of the company's “mobility” division, is the new CEO. This, after a round of global layoffs of 1,400 salaried workers did not boost shares. “We’re moving from a position of strength to transform Ford for the future,” Ford Jr. said, praising Hackett as “the right CEO to lead Ford during this transformative period”. Ford’s shares increased 2.4% to $11.13 in pre-market trading.
Import Taxes on Sugar
China recently announced that it will impose “hefty penalties” on sugar imports. However, experts warn the tariffs may not slow the flow of lower-priced sweetener into China. The ruling, which will affect about a third of China's annual sugar imports, establishes an extra tariff for the next three years on shipments. Top growers such as Brazil and Thailand will be affected and it will close the gap between Chinese and international prices. There are about 190 smaller countries and regions that are exempt from the new duty. Unfortunately, the higher tariffs may spur increased smuggling across China’s borders, while some imports may be shipped through third-party nations’ excluded from the tariffs.