The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Hong Kong (AFP) – Asian markets were mixed Tuesday after political gridlock in Washington triggered the first U.S. government shutdown in 17 years, while upbeat regional economic data provided some cheer.

The dollar edged back down against the yen, with investors saying the Capitol Hill stand-off made it less likely the Federal Reserve would start winding down its stimulus program soon.

Tokyo gained 0.20 percent, or 28.92 points, to 14,484.72, Seoul added 0.10 percent, or 1.91 points, to 1,998.87 but Sydney fell 0.23 percent, or 12.1 points, to 5,206.8.

Hong Kong and Shanghai were closed for a public holiday.

The U.S. government shut down at midnight Washington time as Republicans and Democrats refused to give ground to reach a budget deal.

World markets had expected the deadline to pass with no breakthrough and shares had fallen in previous sessions.

The U.S. closure will see about 800,000 federal staff told to stay at home, leading to the closure of numerous agencies in the first shutdown since 1996 that President Barack Obama warned will hit a budding recovery in the world’s biggest economy.

Obama accused Republicans of holding America to ransom with their “extreme” political demands for his flagship healthcare law to be delayed for a year before they give the go-ahead to any budget.

In a speech to U.S. troops to tell them they would continue to be paid, Obama said: “Unfortunately, Congress has not fulfilled its responsibility, it has failed to pass a budget.”

Tracey Warren of CMC Markets Stockbroking told Dow Jones Newswires: “A prolonged shutdown could have a major impact on confidence and on the U.S. economy, and will likely see a delay in the release of (U.S.) employment figures.”

Adding to the sense of crisis, the two sides appear unlikely to reach a deal to lift the U.S. borrowing limit by mid-October, when the government runs out of cash, leaving it unable to service its debts and in turn possibly default.

However, Song Seng Wun, a regional economist with Malaysian bank CIMB, told AFP: “Asian markets are trying to see beyond what is an obvious case of politics coming in the way of common sense.

He said markets expect that the shutdown “would likely be temporary”.

Market-watchers said investors seemed more interested in the release of data nearer home.

In Japan, the central bank’s quarterly Tankan survey surged to its strongest level since December 2007 with a reading of “plus 12” from “plus 4” in its last survey, showing that major manufacturers are confident about future prospects.

Prime Minister Shinzo Abe said Tuesday he would press ahead with a sales tax hike seen as crucial to cutting Tokyo’s huge national debt, but which critics say could derail a recovery in Japan.

Jiji Press reported that Abe has decided to increase the tax from 5.0 percent to 8.0 percent.

He told a meeting of government and ruling party policymakers that the increase was aimed at “maintaining the nation’s trust and handing over a sustainable social security system to the next generation”, Jiji reported.

The premier is also expected to unveil a stimulus package to help soften the blow, which has put downward pressure on the yen.

In afternoon Tokyo trade the greenback was at 98.16 yen from 98.21 yen in New York. It touched 98.70 in morning trade and 98.21 yen in New York on Monday afternoon.

The euro bought $1.3544 compared with $1.3524, while it also fetched 132.95 yen against 132.81 yen.

In China the official purchasing managers’ index of manufacturing activity crept up to a 17-month high of 51.1 last month from 51.0 in August, the National Bureau of Statistics (NBS) said on its website.

A reading above 50 indicates expansion while anything below signals contraction.

It is the latest in a series of of recent data indicating the Chinese economy is picking up steam after suffering a slowdown in the first half of the year.

A separate survey by HSBC came in a 50.2 on Monday, up from 50.1 in August and much higher than an 11-month low of 47.7 in July.

On oil markets, New York’s main contract, West Texas Intermediate for delivery in November, fell 30 cents to $102.03 in afternoon trade, while Brent North Sea crude for November dipped 60 cents to $107.77.

Gold cost $1,336.03 at 1:49AM on Tuesday compared with $1,340.86 on Monday.

In other markets:

— Taipei added 0.16 percent, or 13.15 points, to 8,187.02.

Taiwan Semiconductor Manufacturing Co was up 1.0 percent at Tw$101.5 while Hon Hai Precision was 0.53 percent lower at Tw$75.5.

— Wellington rose 0.16 percent, or 7.49 points, to 4,743.87.

Telecom was down 1.08 percent at NZ$2.30, Warehouse Group added 0.27 percent to NZ$3.67 and Air New Zealand was 1.65 percent lower at NZ$1.49.


Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Supreme Court of the United States

YouTube Screenshot

A new analysis is explaining the disturbing circumstances surrounding the overturning of Roe v. Wade and how the U.S. Supreme Court has morphed into an entity actively working toward authoritarianism.

In a new op-ed published by The Guardian, Jill Filipovic —author of the book, The H-Spot: The Feminist Pursuit of Happiness—offered an assessment of the message being sent with the Supreme Court's rollback of the 1973 landmark ruling.

Keep reading... Show less


YouTube Screenshot

After a year of reporting on the tax machinations of the ultrawealthy, ProPublica spotlights the top tax-avoidance techniques that provide massive benefits to billionaires.

Last June, drawing on the largest trove of confidential American tax data that’s ever been obtained, ProPublica launched a series of stories documenting the key ways the ultrawealthy avoid taxes, strategies that are largely unavailable to most taxpayers. To mark the first anniversary of the launch, we decided to assemble a quick summary of the techniques — all of which can generate tax savings on a massive scale — revealed in the series.

1. The Ultra Wealth Effect

Our first story unraveled how billionaires like Elon Musk, Warren Buffett and Jeff Bezos were able to amass some of the largest fortunes in history while paying remarkably little tax relative to their immense wealth. They did it in part by avoiding selling off their vast holdings of stock. The U.S. system taxes income. Selling stock generates income, so they avoid income as the system defines it. Meanwhile, billionaires can tap into their wealth by borrowing against it. And borrowing isn’t taxable. (Buffett said he followed the law and preferred that his wealth go to charity; the others didn’t comment beyond a “?” from Musk.)

Keep reading... Show less
{{ }}