Boehner’s Leadership In Spotlight As He Attempts To Avoid U.S Government Shutdown

BoehnerAfter winning in the mid-term elections in early November and gaining majorities in the Senate and the House of Representatives,  Republicans are in the spotlight on Capitol Hill as Speaker of the House John Boehner (R-Ohio) attempts to handle a December 11th deadline to fund the federal government through 2015.

Pressure is building on House Speaker to pass a new temporary spending bill that funds the federal government through September 2015 and avoids a repeat of the 16 day government shutdown in 2013.

After President Obama’s recent decision to use executive action with immigration reform, some Republicans on Capitol Hill are now looking for new ways to challenge the president’s decision that impacts millions of undocumented immigrants in the United States.

Passing a spending bill that funds the government except for certain areas of the Department of Homeland Security that handles immigration in the U.S. is one possible way that some conservative Republicans have considered resisting the president’s policies on immigration.

But that move would likely face opposition from Democrats in the Senate and the White House while generating negative sentiment towards the Republican party at a time when Americans are watching closely to see if Republican leadership can move beyond their largely obstructionist platform that defined their last 2 years on Capitol Hill and discover new pathways to govern the country ahead of the upcoming 2016 presidential elections.

Republicans took the majority of the blame for the last government shutdown in 2013 and poll results showed that Congressional Republican approval ratings plummeted.

Today more pragmatic Republicans in leadership on Capitol Hill are hoping to piece together a workable short term 1 trillion spending bill before December 11th that funds the federal government through September 2015 and challenge the president’s policies in 2015 when newly elected Republicans officially take the majority on Capitol Hill and gain more political leverage.

-Johnathan Schweitzer

Weaker Than Expected Holiday Spending Data Concerns Investors As Cyber Monday Kicks Off

cyberFutures for U.S. stock indexes are lower on Monday following some slightly disappointing holiday shopping news over the week-end from retailers along with news out of Asia that Chinese factory growth hit an eight month low.

According to the National Retail Federation, a Thanksgiving week-end Spending Survey conducted by Prosper Insights & Analytics showed that 55.1 percent of holiday shoppers were or will be in stores and online over Thanksgiving weekend, down from 58.7 percent last year.

The average shopper spent $380 over Thanksgiving Weekend with more than 67 million Americans going to department stores.

The survey also showed that 126.9 million (52.3 percent) of shoppers plan to shop online on Cyber Monday, down slightly from the 131.6 million last year.

Despite the weaker Thanksgiving spending numbers, National Retail Federation CEO Matthew Shay still remains optimistic about U.S. holiday shopping.

“We are encouraged by what we’ve seen thus far with eager Thanksgiving Day and early Black Friday shoppers,” said NRF president and CEO Matthew Shay.

Shopper Trak reported on Saturday that Thanksgiving and Black Friday’s combined sales are projected to be approximately 12.29 billion, a .5 percent decrease from 12.35 billion last year.

Separately, the Russian ruble is sharply lower on Monday after oil hits a five year low. Brent crude fell to below $ 68 per barrel.

-Johnathan Schweitzer

Thanksgiving Store Sales Up; Black Friday Store Sales Down

friU.S. holiday shoppers had more shopping options this Thanksgiving week-end since more retail stores opened their doors early on Thursday with retailers hoping to better compete against 24 hour e-commerce sites and entice more shoppers to spend money in their stores during the most important shopping season of the year.

According to latest sales numbers released on Saturday from Shopper Trak, Black Friday store sales decreased slightly while Thanksgiving store sales have gone up.

Shopper Trak Founder Bill Martin reported that Thanksgiving store visits increased 27.3 percent while Black Friday visits were down 5.6 percent.

Although the volume of shoppers and store sales on Black Friday is down slightly year over year, the total week-end sales over Thanksgiving week-end have not suffered and are expected to be flat compared to last year.

Shopper Trak reported on Saturday that Thanksgiving and Black Friday’s combined sales are projected to be approximately 12.29 billion, a slight .5 percent decrease from 12.35 billion in the same holiday period of 2013.

“We need to be cautious about looking at a single day or two in projecting the season’s total” admitted Shop Trak Founder Bill Martin.

“In 2013 the Black Friday week-end produced a 1 percent gain, underperforming the 3.1 percent gain for the entire season. There is a significant amount of energy left in the consumer with 7 of the top 10 sales days of the year yet to come, including Super Saturday which is projected to be the number one spending day of the year” Martin stated.

U.S. retailers may also take a little comfort in the recent decline of oil during the past several weeks.

Oil is currently at the lowest level since 2009.

Lower gasoline prices at the pump could help Americans to have more disposable income for future purchases this holiday season.

-Johnathan Schweitzer

Johnathan1Johnathan Schweitzer is a Seattle based writer covering finance, politics, and technology

schweitz31@gmail.com

Inflation Slides In Euro Area, Sparking Debate About Additional Stimulus

inflation

Global investors are paying close attention to latest  inflation figures from the Euro area for signs that declining inflation levels could push Euro economies in the 18 member currency bloc ever closer to deflation and lead the European Central Bank to take more accommodative measures to raise inflation and help stimulate growth.

Next Thursday central bankers from the European Central Bank will convene and decide whether the time is right to provide additional monetary stimulus measures to help revive growth and increase inflation levels in the euro economies.

The unemployment rate in the Euro area is 11.5 percent.

Today a flash estimate of Euro area inflation from Eurostat showed that Euro area inflation for November is expected to be 0.3 percent, meeting consensus estimates, but dropping below October’s 0.4 percent.

By contrast in October 2013 inflation was 0.7 percent in the Euro area.

Falling oil prices and weaker growth in Germany are some of the reasons that inflation continues to slide.

Last Friday the Euro plunged and European stock indexes rallied after ECB President Mario Draghi pledged that the ECB would do whatever it takes to help increase inflation across the 18 member euro area currency bloc that is faced with sluggish growth, and high unemployment.

“For our part, we will continue to meet our responsibility – we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us” Draghi said.

“If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases” Draghi added.

-Johnathan Schweitzer

 

Pending Home Sales Decline In October

pendingPending home sales declined over 1 percent in October but remain  above year-over-year levels for the second straight month, the National Association of Realtors reported on Wednesday.

The Pending Home Sales Index, a leading indicator for the housing sector, based on pending sales of existing homes, showed that contract signings decreased 1.1 percent to 104.1 in October from an upwardly revised 105.3 in September but it is still 2.2 percent higher than October 2013.

Median existing-home price for all housing types in October was $208,300, marking a 5.5 percent increase compared to October 2013.

“The increase in median prices for existing-homes has leveled off, representing a healthier pace that has kept affordability in-check for buyers in many parts of the country while giving more previously stuck homeowners with little or no equity the ability to sell,” said Lawrence Yun, chief economist from the National Association of Realtors.

Yun estimates the national median existing home price to rise 4 percent in 2015 and 2016.

But Yun forecasts existing home sales in 2014 to fall slightly to 4.9 million, below 5.1 million in 2013, before increasing to 5.3 million in 2015 and 5.4 million in 2016.

-Johnathan Schweitzer

 

Consumer Spending Improves In October

spendConsumer spending increased modestly in October as falling oil prices helped Americans to have more disposable income at the cash register.

Consumer spending which accounts for two thirds of economic activity in the U.S. economy, increased 0.2 percent in October, slightly missing the estimate of 0.3 percent from briefing.com but surpassing 0 percent  in September, the Commerce Department reported on Wednesday.

Personal income increased 0.2 percent in October, missing the 0.5 percent estimate from briefing.com, but matching the same 0.2 percentage increase in September.

Private wages and salaries increased $18.8 billion in October, higher than $13.9 billion in September.

Supplements to wages and salaries increased $3.8 billion in October, compared with an increase of $3.9 billion in September.

According the U.S. Census Department, new orders for manufactured durable good jumped 1 billion or 0.4 percent to 243.8 billion, beating the estimate of -0.7 percent from briefing.com. and rising above September’s -0.9 decrease.

October’s increase in new orders reverses the trend of two consecutive months of declines.

Excluding transportation, new orders decreased 0.9 percent. Excluding defense, new orders decreased 0.6 percent.

Initial jobless claims rose above 300,000 last week, the first time since September.

-Johnathan Schweitzer

Increased Global Monetary Stimulus Helps Stocks Advance

ngGlobal equities are advancing at the start of the week and the Japanese yen has fallen to the lowest level since 2007 amid signs from central bankers in China and Europe stand ready to tackle the threat of deflation with monetary stimulus.

China’s central bank unexpectedly cut interest rates to help stimulate growth in the world’s second largest economy, decreasing the demand for safe currency assets such as the Japanese yen.

Last week equities rallied and the euro plunged after ECB President Mario Draghi announced that the ECB is committed to help increase inflation across the euro area that is faced with sluggish growth.

“For our part, we will continue to meet our responsibility – we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us” Draghi said.

“If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases” Draghi added.

On Thursday OPEC will meet and discuss the possibility of a production cut to help stop the slide in oil that remains at a 4 year low.

This is shortened trading week in the U.S. with Thanksgiving holiday on Thursday.

On Tuesday the second reading of GDP will be reported for the third quarter of 2014. The first estimate was 3.5 percent. Briefing.com forecasts 3.0 percent. Case-Shiller and consumer confidence data will also be reported.

On Wednesday there will be large amounts of economic data reported  from initial claims, durable orders, personal income, new home sales, pending home sales, Michigan sentiment, PCE prices, and Chicago PMI.

-Johnathan Schweitzer

“Rough Rider” Sen. Ted Cruz Threatens To Play Hardball Over Immigration Reform

immigrationRepublicans are upset with President Obama’s recent decision last week to use executive action over immigration reform and promise to challenge his plans to stop the deportation of millions of undocumented immigrants.

The move to offer temporary legal status to millions of undocumented illegal immigrants has sparked new debate about how Republicans plan to oppose the legality of the president’s latest actions.

One of the loudest Republican voices of dissent comes from Senator Ted Cruz (R-Texas) who claimed on Sunday that Obama has exceeded his Constitutional authority as president.

Senator Cruz appeared on Fox News Sunday with host Chris Wallace and shared his views about President Obama overreaching presidential authority over the complex and thorny topic of immigration reform that has lots of moving parts and sheds light about Washington’s ongoing problems governing on key domestic policy issues.

Cruz maintained on Fox News Sunday that President Obama refuses to follow and enforce America’s current immigration laws.

“The Constitution gives Congress the authority to establish our immigration laws. What the president announced this week is a wholesale refusal to follow our immigration laws, to enforce our immigration laws,” Cruz said on Fox News Sunday.

Republicans are considering to fund the government in all parts except for the Department of Homeland Security which handles immigration by attaching a rider, an additional amendment or provision that the president would be forced to veto and in turn the government could be shut down.

Riders are normally done as a tactic to pass a controversial provision that would not pass as its own bill.

By attaching a rider, Republicans would be playing “hard ball” with the president over his latest move to jump start immigration reform through executive action.

When asked if he would attach a rider, Senator Cruz responded by stating that if the president enforces immigration reform, the soon to be Republican controlled Senate would not confirm any executive or judicial nominees, other than vital national security positions.

“Chris, I’ve laid out a detailed, systematic plan for what Congress should do. We should use the constitutional checks and balances that we have to rein in the abuse of power of the executive” Cruz said.

“Step number one that I have called for is the incoming majority leader should announce if the president implements this lawless amnesty, that the Senate will not confirm any executive or judicial nominees, other than vital national security positions, for the next two years, unless and until the president ends this lawless amnesty” Cruz added.

President Obama appeared on This Week with George Stephanopoulos and responded to questions about using executive order to initiate a policy action when other presidents such as Reagan and Bush took executive actions after bipartisan bills were already passed in Congress and not because Congress did not act as is the case today.

Obama responded by encouraging House Speaker John Boehner (R-Ohio) to go ahead and pass immigration legislation which comes after Speaker Boehner has refused to take the Senate approved immigration bill to the Republican controlled House for a vote.

“The primary response I have to Speaker Boehner and others is go ahead and pass legislation” Obama said.

“In the meantime, what we’ve got to make sure of is, number one, that our borders are secure. And number two, it’s going to allow us to focus on the people that we really want out. Number three, what it allows us to do is to say to folks, who have been here a while, register. We’re going to submit — you’re going to submit to a criminal background check and you’re going to pay taxes.

-Johnathan Schweitzer

 

 

 

Obama Takes A Stand For Immigration Reform

spppPresident Obama announced new plans to use his executive authority to overhaul immigration laws in America by removing the threat of deportation for over 4 million undocumented immigrants living in the United States and providing the framework for immigration reform that has been mired in political gridlock for over a decade and could face challenges in 2015 when Republicans control both houses of Congress.

Calling America’s immigration system “broken” Obama outlined a multi-layered proposal consisting of shorter version of a bipartisan Senate bill last year that failed to pass the Republican led House of Representatives and consists of sweeping changes that will strengthen border security and foster U.S. citizenship by providing undocumented immigrants with a legal pathway to earn citizenship so they can come “out of the shadows.

Obama’s proposal requires undocumented immigrants to pass background checks, pay taxes and a penalty, go to the back of the line, and learn English.

Obama pointed out that “our history and the facts show that immigrants are a net plus for our economy and our society” and “we are and always will be a nation of immigrants.”

Under the new proposal, high-tech and highly skilled workers will have an easier time coming to the United States.

According to a recent NBC/WSJ poll, 57 percent of Americans support giving illegal immigrants a pathway to U.S. citizenship and that jumps to 74 percent when polled respondents were told that a pathway to U.S. citizenship includes paying fines, back taxes, and completing a background check.

There are estimated 11 million undocumented illegal immigrants living in the United States and over 4 million facing a more immediate threat of deportation.

Obama questioned on Thursday night whether deporting millions of illegal immigrants is the best way forward for America to handle its immigration situation.

“Are we a nation that accepts the cruelty of ripping children from their parents’ arms? Or are we a nation that values families, and works together to keep them together?” Obama asked.

“Are we a nation that educates the world’s best and brightest in our universities, only to send them home to create businesses in countries that compete against us?” Obama questioned.

Last year, the Democrat controlled Senate passed a bi-partisan immigration bill that Republican leaders in the House of Representatives, led by House Speaker John Boehner (R-Ohio), refused to allow a simple vote.

Conservative Republicans inspired by Tea Party ideology have resisted calls for immigration reform that includes granting undocumented immigrants a viable pathway to citizenship.

In 2012 Hispanics realized that Republicans stood in the way of meaningful immigration reform and voted overwhelmingly for President Obama during the last presidential election.

Now that President Obama has decided to use executive authority to implement changes to immigration reform, new Republican presidential candidates preparing for the upcoming presidential election in 2016 could further alienate themselves from an important Hispanic voting bloc by taking a strong stand against immigration reform.

Despite the political risks, many Republicans are distressed by President Obama’s decision to use executive action to authorize immigration reform.

Some Republicans have even threatened to shut down the federal government even despite the political risks.

Congress came to a bipartisan agreement earlier this fall to pass a stopgap funding bill to keep the federal government operating until December 11th.

Emboldened Republican leaders could decide to threaten to shutdown the government again before the December 11th deadline and play hardball with Obama over immigration reform and the Keystone XL pipeline.

Alternatively Republicans could decide to pass another temporary stopgap spending bill and defer taking decisive action on spending bills and immigration reform until early 2015 when they will have greater leverage and control both houses in Congress.

Republican House Speaker John Boehner (R-Ohio) released a video on Facebook on Thursday criticizing President Obama for using executive authority to jumpstart immigration reform.

“Instead of working together to fix our broken immigration system, the president says he’s acting on his own. But that is just not how our democracy works,” Boehner said.

“The president has said before that ‘he’s not king’ and he’s ‘not an emperor,’ but he sure is acting like one. And he’s doing it at a time when the American people want nothing more than for us to work together” Boehner added.

Senator Ted Cruz (R-Texas) also took a negative view on Obama’s use of executive authority to get immigration reform moving.

“His actions are not only unconstitutional and in defiance of the American people who said they did not want amnesty in the 2014 elections, but they are also unfair to every immigrant who has come to our nation legally” Cruz posted on his Facebook page.

Florida Senator Marco Rubio (R-Florida), who has Cuban  immigrant roots, took a less negative view towards immigration reform in a released statement.

“We need immigration reform. But the right way to do it is to first bring illegal immigration under control by securing the borders and enforcing the laws, then modernizing our legal immigration system,” Rubio said.

“After we do these things, we will eventually have to deal with those here illegally in a reasonable but responsible way. The President’s actions now make all of this harder and are unfair to people in our immigration system who are doing things the right way” Rubio added.

President Obama understands that his decision to use executive authority to jumpstart immigration reform could lead to a confrontation with Republicans. During his speech on Thursday night, Obama encouraged Republicans to pass an immigration bill rather than obstructing immigration reform.

“To those members of Congress who question my authority to make our immigration system work better, or question the wisdom of me acting where Congress has failed, I have one answer: Pass a bill” Obama said defiantly.

-Johnathan Schweitzer

Johnathan1Johnathan Schweitzer is a Seattle based writer who writes about finance, politics, and technology. He can be reached at schweitz31@gmail.com

 

Weak Global Economic Data Pressures Stocks

cgrowthU.S. stock indexes are heading lower on Thursday morning following disappointing global manufacturing data out of Europe, China, and Japan.

In Europe the pace of growth in the euro area fell to a 16 month low, according to Markit Eurozone PMI.

Business activity in the manufacturing and services economies dropped from 52.1 in October to 51.4, marking its lowest reading since July 2013.

Germany’s preliminary manufacturing survey came in at 50.0 and missed consensus estimates.

Japan’s manufacturing data also showed moderation in November.

The flash Markit/JMMA Japan Manufacturing PMI came in at 52.1 in November, down from 52.4 in October.

On Thursday in China factory activity fell to its lowest level in 6 months.

The preliminary HSBC China Manufacturing Purchasing Managers Index fell to 50.0 in November versus a final reading of 50.4 in October.

A reading above 50 indicates economic expansion while a reading below 50 marks contraction. China’s third quarter 2014 GDP growth fell to 7.3 percent, the slowest pace in over 5 years.

In the United States on Thursday CPI data, the most widely cited inflation indicator that is used to calculate cost of living adjustments for government programs, came in at 0.0 percent in November, higher than the estimate of -0.2 from briefing.com but lower than 0.1 percent in October.

Core CPI which subtracts food and energy prices, came in at 0.2 percent, slightly higher than the estimate of 0.1 percent from briefing.com and higher than 0.1 percent in October.

Inflation is closely watched by Fed members at the Federal Reserve and is used to set monetary policy.

The personal-consumption expenditures price index that the Federal Reserve prefers to use for inflation showed a 1.4 percent inflation reading in September which is well below the Fed’s 2 percent inflation target.

Yesterday minutes from the Fed’s meeting in October showed that Fed members expect inflation to remain subdued in the short-term but rise in the long term.

“Although inflation in the near term will likely be held down by lower energy prices and other factors, the Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year” according to Fed minutes.

-Johnathan Schweitzer