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Dow hits 2022 low as markets sell off on recession fears
NEW YORK (AP) — Markets around the world have sold off amid growing signs that the global economy is weakening as central banks further increase the pressure to raise interest rates. The Dow Jones Industrial Average closed at its lowest point of the year on Friday. The S&P 500 fell 1.7%, near its 2022 low. Energy prices also closed sharply lower as traders worried about a possible recession. Treasury yields, which affect interest rates on mortgages and other types of loans, remain at multi-year highs. UK government bond yields rose quickly after the country’s new government announced sweeping tax cuts.
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UK tax cuts, more spending, accelerating sterling slide
LONDON (AP) – Sterling posted its biggest one-day drop in 2.5 years after Britain’s new government outlined plans to cut taxes and increase spending. This has sparked fears that increased public borrowing will exacerbate the nation’s cost of living crisis. Sterling tumbled more than 3% on Friday. Finance Minister Kwasi Kwarteng announced sweeping tax cuts, which he said would boost economic growth and boost incomes, but would not lead to corresponding spending cuts. He also said previously announced plans to limit soaring energy bills for households and businesses would be financed by borrowing. Critics have slammed the plan for favoring business interests over working people and for failing to provide any data on its impact on government fiscal goals.
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Revamped Detroit Showcase Now Also Featuring New Flying Tech
DETROIT (AP) — The Detroit Auto Show returns with a roar. and take off. The prestigious North American International Auto Show was last held in 2019. It returned last week. Visitors can once again keep an eye on the latest offerings from some of the world’s largest automakers. But now they can also check out what the organizers call “performance over performance.” The air mobility experience includes presentations and demonstrations from six air mobility innovators, including electric VTOL aircraft, hover vehicles, hoverboards and jet suits. The show runs through Sunday at the Downtown Convention Center.
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U.S. seeks tougher labor and environmental standards in Asia
WASHINGTON (AP) — The United States is outlining its goals for a new trade deal with Australia, Japan, South Korea and nine other countries, aimed at demonstrating the country’s commitment to working with the Indo-Pacific region as China’s influence grows . The U.S. Trade Representative’s office on Friday unveiled negotiating goals for the Indo-Pacific economic framework, which was launched with 12 countries in May. Among them, the United States wants Indo-Pacific countries to improve labor and environmental standards, ensure that markets remain open to competition, and take measures to ease supply chain backlogs at border crossings.
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GM to spend $760 million revamping Toledo plant to make electric car parts
TOLEDO, Ohio (AP) — General Motors said it will spend $760 million to renovate its transmission plant in Toledo, Ohio, to build drivelines for electric vehicles. This is the first GM engine or transmission plant to begin a long transition from internal combustion engines to electric vehicles. GM aims to produce only electric passenger cars by 2035. The investment will preserve the jobs of about 1,500 hourly and salaried workers at the Toledo plant, which now makes four transmissions used in pickup trucks and many other general-purpose internal combustion engine vehicles. That’s good news for Toledo’s workers, who have been worried about the future of the factory.
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Bank director urges firing of Trump official in ethics probe
MIAMI (AP) — The executive directors of the Inter-American Development Bank voted unanimously to recommend firing a former Trump official as president of the Washington-based agency. It comes after an investigation found Mauricio Clover-Carone violated ethics by favoring senior aides with whom he was romantically involved. A person familiar with the vote said the decision to recommend that Clover Carrone be fired came at a closed-door meeting on Thursday. The Associated Press obtained a confidential report from a law firm hired by the bank’s board of directors that was prompted by an anonymous complaint about Claver-Carone’s misconduct. Investigators say it is reasonable to conclude the relationship has existed since at least 2019, when both men held senior positions on the National Security Council.
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After 90 years, German bakery closes as energy costs soar
COLOGNE, Germany (AP) — A family-run bakery in the German city of Cologne will permanently shut down its ovens after 90 years because it can no longer afford rising energy prices due to Russia’s war in Ukraine. Engelbert Schlechtrimen’s grandparents founded the bakery before World War II, and the 58-year-old took over from his father 28 years ago. His business was one of the victims of the European energy crisis triggered by Russia’s cuts to natural gas. The ensuing rise in energy and electricity prices has squeezed businesses that are already struggling with rising other costs due to rising inflation.
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Spain plans to raise taxes on millionaires to help those in need
MADRID (AP) — Spain’s Socialist Party-led coalition plans to impose a temporary higher tax rate on the country’s richest 1 percent starting next year. This is in addition to the windfall profits tax on large energy companies and banks. Socialist Prime Minister Pedro Sanchez said on Friday the change was intended to help fund the welfare state amid difficulties caused by rising energy and food prices. Annual inflation in Spain climbed to 10.5% last month. The government said the tax hike would only target millionaires. The exact increase and scope of the tax measures are still being worked out, it said.
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Inflation, turmoil challenge Bangladesh’s ‘miracle economy’
Dhaka, Bangladesh (AP) — Bangladesh’s economic miracle is under severe pressure as rising fuel prices fuel public discontent over rising costs of food and other necessities. Protests have erupted in recent weeks, adding to pressure on Prime Minister Sheikh Hasina’s government, which has turned to the International Monetary Fund for help to protect the country’s finances. Experts say Bangladesh’s plight is far less severe than that of Sri Lanka, whose months-long unrest has caused its long-term president to flee the country. But it faces similar problems: excessive spending on display projects, public anger over corruption and nepotism, and a weakened trade balance. These trends are undermining Bangladesh’s progress in becoming a wealthier middle-income country.
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The S&P 500 lost 64.76 points, or 1.7%, to 3,693.23. The Dow Jones Industrial Average fell 486.27 points, or 1.6%, to 29,590.41. The Nasdaq lost 198.88 points, or 1.8%, to 10,867.93. The Russell 2000 index of small companies fell 42.72 points, or 2.5%, to 1,679.59.