- Yellen expects full employment with Biden’s stimulus package by 2022.
- China issues new anti-monopoly rules
- $29 billion investment plan from Ford in electric vehicles
Yellen Expects Full Employment with Biden’s Stimulus Package by 2022
Treasury Secretary Janet Yellen said Sunday the country was still in a “deep hole” with millions of lost jobs. However, she stated that with the implementation of the stimulus package, the United States could return to full employment in 2022. Otherwise, it would risk a slow recovery in employment and the economy, that was damaged by Covid-19.
“I’m afraid of the loss of balance in the employment market,” said Yellen, who gave an interview to CBS.
Yellen stated that low-wage workers, minorities, and women will be the groups that will suffer the most from the prolonged economic slowdown. “We are at a bottomless pit in the employment market. We have a long way to go,” she said.
Yellen told CNN that in the event of an insufficient support package, the recovery of the employment market could delay until 2025. Although she acknowledges that US President Joe Biden’s $ 1.9 trillion stimulus package is not directly directed to employment, she said, “The spending package will create employee demand.”
A budget proposal that would allow a coronavirus relief bill to pass the Senate with a simple majority vote of 51 was approved by the House and Senate last week.
60 votes will be required under regular rules. With Vice President Kamala Harris representing the tie-breaking vote for Democrats, the Senate is divided 50-50.
Last week, former Treasury Secretary Larry Summers wrote in the Washington Post that Biden’s bailout is too large and carries “huge risks”, including inflation. Yellen responded to this criticism by emphasizing that the economic risks could be much greater in the face of an inadequate package.
“We face a huge economic challenge here and tremendous suffering in the country. We have got to address that,” Yellen said. “That’s the biggest risk.”
“If inflation is a problem, we have the tools to combat inflation risk. As the Minister of the Treasury, I have to consider all the risks to the economy, ” she added.
Global stocks started the new week by widening the record with Yellen’s statements supporting strong incentives. In the S&P 500, which rose by 0.4 percent on Friday, the S&P 500 started positively on the first trading day of the week. In Asia, the Japanese Topix and Hong Kong Hang Seng indices increased more than 1 percent.
The upward movement of the indices supported the statements of US Treasury Secretary Janet Yellen about the stimulus package.
China Issues New Anti-Monopoly Rules
China’s market regulator has issues new anti-monopoly rules that are aimed at internet platforms, tightening already existing restrictions faced by the country’s technology giants.
Published on Sunday, the new rules formalize an earlier anti-monopoly law published in November and explain a number of monopoly activities that regulators are aiming to crack down on.
The new requirements are expected to increase pressure on China’s largest online services, the agency said. This includes Alibaba’s Taobao and Tmall marketplaces or the JD.com service. The rules will also apply to payment services such as Alipay or WeChat Pay.
The rules imply a ban on forcing sellers to make a mandatory choice between the largest players in the Chinese online market, which has long become a permanent practice, writes Reuters. The regulator also indicated that it would prevent companies from entering into price collusion or using data and algorithms to manipulate the market.
SAMR ( State Administration for Market Regulation) believes that such an approach will help “stop monopolistic behavior in the platform economy and protect fair competition in the marketplace.”
It is worth noting that in recent months, the Chinese authorities have significantly tightened the rules for regulating the activities of their technology companies. One of the results of this was the antitrust investigation against the Alibaba Group, which was launched in December last year. The regulator has previously warned Alibaba about the need to abandon a number of practices, including forcing sellers to sign exclusive cooperation agreements.
As the first use of the new issues set of rules, Chinese regulators charged online discount retailer Vipshop Holdings Ltd with a 3 million yuan = $464,000 fine.
Vipshop was fined for breaches of a law banning unfair competition, which provides for penalties of up to 5 million yuan, in a sign that regulators are increasingly willing to use more resources to rein in monopoly activity in the tech sector.
China’s newly announced rules over the weekend look like haven’t had much impact on the market for now, according to data. Tencent was up 0.82%, Meituan jumped 1.54% and JD.com gaining 1.14%. Only Alibaba bucked the trend, dipping by about 0.16%.
$29bn Investment Plan from Ford in Electric Vehicles
Ford, one of the major car manufacturers in the USA announced its balance sheet for the fourth quarter of 2020.
In the statement, it was stated that the income obtained by the company in the last quarter of last year decreased by 9 percent compared to the same period of the previous year and decreased to 36 billion dollars, and it was recorded that the company lost 2.8 billion dollars in the said period. It was reported that the company’s revenue fell 18 percent in 2020 to 127.1 billion dollars in 2020 compared to the previous year, and the company lost $ 1.3 billion last year.
For 2021, CFO John Lawler said the company estimates it will earn between $8 billion and $9 billion in adjusted pretax profits and generate between $3.5 billion and $4.5 billion in adjusted free cash flow. That doesn’t factor in a global shortage in semiconductor chips that he said could lower Ford’s earnings by $1 billion to $2.5 billion this year.
“The semiconductor situation is changing constantly, so it’s premature to try to size what availability will mean for our full-year performance,” he said in a press release. “Right now, estimates from suppliers could suggest losing 10% to 20% of our planned first-quarter production.”
In the statement, which also includes evaluations of Ford’s future plans, it was pointed out that the company will increase its investments in electric and autonomous vehicles. It was stated that Ford plans to invest $ 29 billion, including $ 22 billion in electric vehicles and $ 7 billion in autonomous vehicles, by 2025.
Ford said a majority of vehicles under the plan will be all-electric, but the company also has hybrid and plug-in hybrid models that continue to have traditional internal combustion engines.
Ford’s new CEO Jim Farley touted the company’s increased investment as a “more aggressive” plan to position the nation’s oldest automaker as a leader in the future of mobility and transportation.
“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” Ford CEO Jim Farley said in a release.