Trump Presidency Lifts Wall St to Record High | Business Matters (November 7)

Welcome back for today's Business Matters. We're joined by Don Ma. Don, always good to see you. A lot going on after the election. Very excited to hear what you have. Yeah, it's good to be back. First day after the results of the election, so let me go ahead and get started with that. So $63 billion added to the net worth of the top billionaires today, and this is based on data from the Bloomberg Billionaires Index. This is the largest one-day gain since the index began more than a decade ago. Tesla founder Elon Musk raked in more than $26 billion. The gains are largely from a surge in U.S. stocks. S&P 500 reported its best post-election performance in history with a 2.5% gain. The U.S. dollar also gained. The rise in stocks underscores the bets being made on former President Trump's win and his agenda to lower taxes and regulations. Wall Street investors are bracing for two avenues with former President Donald Trump returning to office. Bank and private equity executives are anticipating pro-business and anti-regulations. Former President Trump's second term will likely come with smaller government, broad deregulation, and tax breaks for corporations and the wealthy. The execs believe a softer stance on antitrust and less regulation in areas like banking and crypto could boost corporate profits. On the other hand, some bankers are worried about navigating unpredictable shifts in government policy, impacts of trade tariffs, and tightening on visa programs and a fiscal path that could add trillions to national debt. Tesla CEO Elon Musk scored a legal win yesterday after a federal appeals court upheld the jury's decision clearing him of securities fraud. The case centered around his 2018 tweets about taking the electric vehicle company private. A group of investors had argued that Musk's 2018 post on Twitter caused significant volatility in the company's stock price. This was years before Musk bought the platform and renamed it X. Investors claimed the tweets were misleading and led them to suffer as much as $12 billion in losses. Musk's defense argued that he believed his statements on Twitter were true. Now the Federal Reserve cutting rates again, and this time by a quarter of a percent. This brings the benchmark federal funds rates to between 4.5 to 4.75 percent. Here's the story. The FOMC decided to take another step in reducing the degree of policy restraint by lowering our policy interest rate by a quarter percentage point. Fed Chair Jerome Powell announced Thursday the economy is expanding at a solid pace. Unemployment is low and inflation is making progress toward the Fed's target. He says the Fed is on its way to more stability. We're on a path to a more neutral stance and that's very much what we're on. That has not changed at all since September and you know we're just going to A more neutral stance is one in which the Fed will implement a level of interest rates that's neither stimulative nor restrictive for the economy. This hypothetically allows the economy to develop at a natural pace. The Fed takes a neutral stance when it believes an economy is stable. Though instability could come under the new Trump administration, Powell says the election at the moment has no effect on policy decisions. It's such an early stage. We don't know what the policies are and once we know what they are we won't have a sense of you know when they'll be implemented or all those sorts of things. So I think I would just say we're not doing that now. Powell says policy decisions will be incorporated into Fed models. Now former President Donald Trump has a contentious past with the Federal Reserve which has raised questions whether the future president will seek to limit its independence. On the campaign trail, former President Trump said he didn't think a president should be able to give orders to the Fed but that he also felt strongly that the commander-in-chief should have a say on interest rate policy. Former President Trump also said that he would allow Fed Chair Jerome Powell to serve out his term but would not re-appoint him. Powell's term ends in 2026. The president holds the most power over the Fed in naming appointees to fill vacancies on the Board of Governors which consists of 19 policymakers. The Senate must then approve the appointee. Meanwhile Taiwan will help companies relocate production from China given the likely large impact from tariffs that a president like Donald Trump has promised to impose on the country said Taiwan's economic minister on Thursday. With potential Trump tariffs ahead, Taiwan says it will help its companies relocate production out of China. Taiwanese companies have invested billions of dollars in China over the past four decades, taking advantage of historically lower costs. But incoming US President Donald Trump has promised to impose tariffs of 60% on US imports of Chinese-made goods. And Taiwan's government, wary of stepped-up pressure from Beijing to accept Chinese sovereignty claims, has been encouraging its firms to move investment elsewhere. Another worry, the world's largest chipmaker, Taiwanese TSMC, is investing $65 billion in the US state of Arizona for new factories. But Taiwanese lawmakers have voiced concerns Trump might cancel subsidies for TSMC. The economy minister said on Thursday that there is a contingency plan, including helping more companies in the supply chain to move to the United States. TSMC has not commented on any concerns it may have about the subsidies. Taiwan and the United States have also been holding talks under a series of different trade initiatives that Taipei hopes will lead to a broad free trade agreement. BMW CEO downplayed fears of US import tariffs. This is despite stock shares going down for BMW and other foreign car markets. TV's Sean Marshall has more detail. BMW CEO Oliver Zipse said Wednesday that potential import tariffs under a Trump presidency may benefit BMW. It's even as shares in the German premium carmaker and its rivals plummeted. The drop is due to concerns that the sector would be hurt by escalating trade disputes. Trump has threatened import tariffs on goods from the EU. Fears over them caused shares in BMW, Volkswagen, Mercedes-Benz, and Porsche to fall. They were among the biggest decliners across Europe. BMW's plant in Spartanburg, South Carolina, produces more than 1,500 vehicles a day. It's the company's biggest factory worldwide and a main exporter to markets including Germany, China, and Britain. Zipse said BMW may even have more of an advantage if there were tariffs because, quote, we have a very, very large footprint in the USA. Sean Marshall, NTD News. And the stakes are high this holiday season. So shipping companies are targeting their smallest customers. With Thanksgiving falling on November 28th this year, the peak shopping period from Black Friday to the end of the year has been cut short. Plus, overall holiday package volume is expected to continue to dip this year as a result. Shipping rivals FedEx and UPS are escalating their price war to attract parcel volume from their smallest customers. The duo are aggressively trying to lure smaller businesses with discounts they typically save for bulk shippers. Low-income families will soon pay less when adding money to students' lunch accounts. School lunch accounts, that is. The U.S. Department of Agriculture recently announced a new rule. It will ban schools from charging junk fees for adding funds to school lunch accounts of families that qualify for free or reduced breakfast and lunch. One study from the Consumer Financial Protection Bureau estimates low-income families pay 60 cents in processing fees for each dollar they spend on school lunch. School districts are encouraged to adhere to the new rule as soon as possible. It officially takes effect in the 2027-2028 school year. Initial jobless claims rose slightly last week as expected. But Americans are staying unemployed for longer. The Labor Department reports 221,000 initial claims for unemployment insurance last week. That's up 3,000 from the week before. But the number of continuing claims filed by people who have received unemployment insurance for at least a week went up by 39,000 to 1.89 million for the week ending October 26th. It's the highest level of continuing claims since November 2021. The U.S. job market has been cooling with the pullback in job growth attributed more to employers not hiring rather than laying off workers. Australian Prime Minister Anthony Albanese said today that his government would ban social media for children under the age of 16. The country is testing an age check system to block kids from social media with a ban possible by next year. Here's more. Albanese highlighted the dangers to children including harmful depictions of body image and misogynist content aimed at boys. The law will be introduced this year and take effect 12 months after approval. There will be no exceptions for children with parental consent or existing accounts. He added that social media platforms must prove they're blocking underage access. The onus will be on social media platforms to demonstrate they are taking reasonable steps to prevent access. The onus won't be on parents or young people. There will be no penalties for users. Communications Minister Michelle Rowland said the rules would apply to platforms like Meta, Instagram, TikTok and X. YouTube would probably be included too. None of the companies could be reached for comment right away. Many countries plan to limit children's social media use but Australia's policy is one of the strictest. France proposed banning social media for people under 15 but allowed exceptions with parental consent. The U.S. has required parental consent for children under 13 causing most social media platforms to ban those under that age. And a holiday journey underway. The Rockefeller Center is heading right past Thanksgiving and it's full speed ahead to Christmas. A giant Norway spruce has been cut down from West Stockbridge, Massachusetts and is making a 140 mile trip to the big city. The 74 foot tall spruce will serve as this year's Christmas tree's centerpiece at the Rockefeller Center in New York City. The tree will be put up on Saturday and will stay there until mid-January. All right let's talk about markets. U.S. stocks closed higher today and this comes after the Federal Reserve announced a cut of a quarter percent in interest rates. The rise in stocks extends from a sharp rally sparked by Donald Trump's return as U.S. president. Now investor expectations that Trump would lower corporate taxes and loosen regulations sparked a surge in each of the three major indexes in the prior session with both the Dow and the S&P 500 recording their largest one-day percentage jumps in two years. As well investors also eyeing whether Republicans could win control of both houses of Congress making it easier for Trump's agenda to proceed. All right and that's all the stories I have for you today in Business Matters. Back to you guys. Cary Fiona. What do you think guys? Banning social media for children under 16 seems like uh doesn't seem like a terrible idea to me but how do you how do you put that into position if kids have already been using it for a few years? Well I think the trick is to you know just don't let them use it at a young age so they're not tempted. They don't have the experience of using it so there's not that temptation to want to use it if the ban comes into place. Of course this is for uh newer parents but for existing parents it's it's a lot tougher. I mean uh there's no good there's not going to be penalties on people who use uh social media under the age of 16 but how do you ensure that happens? Do you have to give like your ID to the website? How is that going to work? I also think a bigger issue here is the culture for younger people and kids today because social media and smartphone use in general has become so prevalent right? I mean when you're in high school or middle school if you don't have a smartphone, if you don't have Snapchat, if you don't have Instagram, suddenly you're the odd one out. Even if you hadn't been interested in it in the first place everyone around you is using it. You feel weird maybe. You might feel left out. People might think you're strange for not using it. Might be harder to feel included in friend groups. So I think it's a whole culture shift that has to happen there. Encourage kids do something other than go on social media. Yeah well for children you know that are 13, 14 there's that societal pressure. Now imagine 15 and 16 year olds being told you can't use it anymore but misery does enjoy company and so if they all can't use it then that's how it goes I guess. Yeah well I think it's up to the parents to educate their kids. Do not feel that way when you see other people using it and you're the one who's not allowed. I think it's up to the parents to tell them that it's okay.