“Donald Trump Courted a Republican Rebellion. Now He’s Got One.”
Donald Trump campaigned against the Republican Party establishment to win the White House. After two of its more prominent members fought back, calling Trump nothing less than a danger to democracy, the president showed no signs of letting up Wednesday. The rebellion comes at the worst possible time, as the party is trying to thread the needle on a promised massive tax cut that’s helping bolster record stock market gain.
The ferocity of the attacks by senators Jeff Flake of Arizona and Bob Corker of Tennessee shows how much Trump has already changed the GOP, leaving little room for outspoken, down-the-line conservatives like Flake or business-minded Republicans like Corker. Flake, who said he will retire at the end of 2018, lamented the “degradation” of U.S. politics, while Corker, who said late last month he will retire, accused Trump of “debasing” the nation.
What’s not clear is what would take the establishment’s place. One possibility is more Republicans in Trump’s image — candidates backed by his former chief strategist Stephen Bannon, who already has contenders for the two Senate seats. But many Republicans seriously question whether that kind of party can hold a majority in Congress, let alone recapture the White House in 2020. Trump’s current approval rating is 36 percent.
“U.S. durable goods data suggests strong business equipment spending.”
New orders for key U.S.-made capital goods increased more than expected in September and shipments rose for an eighth straight month, pointing to robust business spending that should help to mitigate the impact on the economy from the hurricanes.
The sign of strong business investment on equipment in the third quarter supports views that the Federal Reserve will increase interest rates for a third time this year in December.
“The Fed can continue to remove its monetary stimulus confident that investment is heating back up after the downturn in orders and shipments a couple of years ago,” said Chris Rupkey, chief economist at MUFG in New York. “Businesses don’t invest in the future if they don’t think consumers will be there to buy their goods and services.”
The Commerce Department said on Wednesday non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.3 percent last month after an upwardly revised 1.3 percent increase in August.
Economists had forecast orders of these so-called core capital goods increasing 0.5 percent last month after a previously reported 1.1 percent jump in August. Core capital goods orders advanced 3.8 percent year-on-year.
Shipments of core capital goods climbed 0.7 percent after soaring 1.2 percent in August. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.
“Crown prince says Saudis want return to moderate Islam.”
Saudi Arabia’s Crown Prince Mohammed bin Salman has said the return of «moderate Islam» is key to his plans to modernize the Gulf kingdom. He told reporters that 70% of the Saudi population was under 30 and that they wanted a «life in which our religion translates to tolerance». The prince vowed to «eradicate the remnants of extremism very soon». He made the comments after announcing the investment of $500bn (£381bn) in a new city and business zone.
Dubbed NEOM, it will be situated on 26,500 sq km (10,230 sq miles) of Saudi Arabia’s north-western Red Sea coast, near Egypt and Jordan.
Saudi Arabia’s royal family and religious establishment adhere to an austere form of Sunni Islam known as Wahhabism, and the king styles himself as the guardian of Islam’s two holiest sites. Islamic codes of behavior and dress are strictly enforced in the kingdom.
Last year, Prince Mohammed unveiled a wide-ranging plan to bring social and economic change to the oil-dependent kingdom known as Vision 2030. As part of those reforms, the 32-year-old has proposed the partial privatization of the state oil company, Saudi Aramco, and the creation of the world’s largest sovereign wealth fund.
And in September his father, King Salman, announced that a ban on women drivers would end next year, despite long-standing opposition from religious conservatives. The government also wants to invest in the entertainment sector. Concerts are once again being held and cinemas are expected to return soon. Prince Mohammed defended the reforms at an economic conference in Riyadh on Tuesday that drew foreign investors and dignitaries.
«We are returning to what we were before – a country of moderate Islam that is open to all religions, traditions and people around the globe,» he said. «Seventy percent of the Saudi population is under 30, and honestly we will not spend the next 30 years of our lives dealing with destructive ideas. We will destroy them today and at once.»
“The Bond Market’s Moment of Truth Is Now.”
The bond bears may finally be having their moment. The 10-year Treasury yield rose five basis points Tuesday to 2.42 percent, closing above 2.4 percent for the first time in five months. The yield had previously failed to sustain increases above that mark on several occasions since May, making it a bellwether of the potential for yields to return to their highs of the past year.
The 10-year yield rose as high as 2.4262 percent Tuesday after President Donald Trump asked Senate Republicans for a show of hands in support of potential nominees to lead the Federal Reserve. Stanford University economist John Taylor, a perceived hawk, appeared to win the poll, according to Senator Tim Scott of South Carolina.
Treasuries were already declining in the past week amid renewed signs of progress on a tax-cut plan. House Republicans are planning to release a bill on Nov. 1. The prospect of fiscal stimulus, which the bond market had counted on earlier this year, could supercharge the economy and inflation.
Before Tuesday’s afternoon leap, options market trading indicated doubts about the 10-year yield sustaining its climb. A flurry of activity on Tuesday indicated renewed interest in November call spreads on 10-year Treasury futures, which is effectively a bet against the yield barreling through the 2.4 percent to 2.42 percent range.
Key events before the position’s expiry on Friday include the European Central Bank’s policy meeting, a reading on third-quarter U.S. economic growth and potentially a decision on the next Fed leader.