Business

Kamala Harris raises $200mn in first week of presidential campaign

Published

2 months ago

July 28, 2024

Kamala Harris raises 0mn in first week of presidential campaign

Kamala Harris has raised $200mn for her White House bid in less than a week, her campaign said on Sunday, with the vice-president hoping that the surge in funding will boost her chances against Donald Trump.

Michael Tyler, the Harris campaign’s communications director, called it a “record-shattering haul”.

“Of that amount, 66 per cent came from first-time donors, further proof of the tremendous grassroots support for the vice-president,” he said.

Harris urgently needs to boost fundraising to make up for the slowdown in donations to President Joe Biden after his disastrous debate performance against Trump in late June.

Harris raised more in a week than Biden and Trump raised in the month of June, combined. Biden’s campaign raised less than $63.8mn last month, about $42mn less than Trump, according to Open Secrets.

The Trump campaign and affiliated political action committees had raised a total of about $757mn by the end of last month, campaign finance data shows — including $431.2mn between April and June.

Before he quit the race, groups linked to Biden had raised $746mn, including $332.4mn in the second quarter.

In the week since Biden ditched his bid and endorsed the vice-president to succeed him, the race has been radically reshaped.

Harris has quickly united the Democratic party behind her candidacy and gained some ground against Trump in opinion polls, compared to Biden’s performance.

She is vetting vice-presidential nominees and is expected to announce her choice in the next two weeks.

But at a fundraiser in Massachusetts on Saturday, Harris conceded that Trump remained the favourite in the election, which will be held 100 days from now, in early November.

“We are the underdogs in this race, but this is a people-powered campaign,” Harris told the donors.

At a rally in Minnesota on Saturday night, two weeks after he survived an assassination attempt, Trump lashed out at Harris, calling her “evil” as he tried to adjust his campaign to target her instead of Biden.

“If a crazy liberal like Kamala Harris gets in, the American dream is dead,” Trump said.

After the attack on his life, Trump had briefly called for “unity” in American politics. But on Saturday, he suggested the time for niceties was already over.

“They all say, ‘I think he’s changed. I think he’s changed since two weeks ago. Something affected him’,” Trump told the crowd. “No, I haven’t changed . . . Maybe I’ve gotten worse. Because I get angry at the incompetence that I witness every single day.”

On Friday, Trump attracted criticism for telling a group of Christian conservatives that they would not have to “vote any more” in four years if they helped elect him this year.

Harris and her campaign are also honing their attacks on Trump. She has sought to emphasise that he is a threat to Americans’ basic freedoms, from abortion and voting rights to economic security. She has also described Trump and his running mate JD Vance as being bizarre and extreme.

“You may have noticed, Donald Trump has been resorting to some wild lies about my record. And some of what he and his running mate are saying, well, it’s just plain weird. I mean that’s the box you put that in,” she said on Saturday.

When Biden left the race, Trump was leading by 3.2 percentage points in national polling, according to the Fivethirtyeight.com average. But since then, Harris is showing signs of closing the gap.

An ABC/Ipsos poll on Sunday showed that more voters viewed the vice-president favourably than unfavourably — 43 per cent against 42 per cent. In the same poll last week her favourability was 35 per cent against 46 per cent who viewed her negatively.

A Wall Street Journal poll showed Trump leading Harris by 2 percentage points among registered voters in a head-to-head match-up, but trailing Harris by 1 percentage point when third-party candidates were included. Some swing state polls have also shown a tighter race, including Fox News surveys that found the race between Trump and Harris tied in Pennsylvania and Michigan.

Chris Sununu, Republican governor of New Hampshire, a former Trump critic who has since embraced him, acknowledged that Harris’s entry had created “a whole new race” and Democrats would have “momentum” heading into their convention next month.

But he also said the “honeymoon” period would end in September and, as long as Trump shied away from “personal attacks” and focused on policy differences including the economy and immigration, he would have a better message.

“Hopefully the numbers, the polls, will get Donald Trump to realise what was working and what didn’t,” Sununu told ABC.

But on the same TV programme, JB Pritzker, the Democratic governor of Illinois, said the winds were visibly shifting towards Harris. “The electorate is energised. Democrats are ready to go. You’ve seen hundreds of thousands of people signing up to volunteer,” he said.

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Business

China August factory output, retail sales miss expectations By Reuters

Published

6 days ago

September 14, 2024

Reuters

BEIJING (Reuters) – China’s industrial output growth slowed to a five-month low in August, while retail sales also weakened further, raising the case for bolder stimulus to shore up the world’s second-largest economy.

The sluggish data released on Saturday contrasted with the robust export growth seen in August, underscoring the uneven nature of China’s economic recovery.

Industrial output in August expanded 4.5% year-on-year, slowing from the 5.1% pace in July and marking the slowest growth since March, data from the National Bureau of Statistics (NBS) showed on Saturday.

That missed expectations for 4.8% growth in a Reuters poll of 37 analysts.

Retail sales, a key gauge of consumption, rose only 2.1% in August, decelerating from a 2.7% increase in July amid extreme weather and a summer travel peak. Analysts had expected retail sales, which have been anaemic all year, to grow 2.5%.

President Xi Jinping on Thursday urged authorities to strive to achieve the country’s annual economic and social development goals, state media reported, amid expectations more steps are needed to bolster a flagging economic recovery.

Faltering Chinese economic activity has prompted global brokerages to scale back their 2024 China growth forecasts to below the government’s official target of around 5%.

The protracted property slump has prompted Chinese consumers to cut back spending. Some experts have even proposed distributing shopping vouchers to counter the trend.

Premier Li Qiang said last month the country will focus on stimulating consumption and look at measures to boost household income.

A central bank official said last week China still has room to lower the amount of cash banks must hold as reserves while it faces some constraints in cutting interest rates.

Data from the central bank on Friday showed August new yuan loans remained soft.

Fixed asset investment rose 3.4% in the first eight months of 2024 from the same period a year earlier, compared with an expected 3.5% expansion. It grew 3.6% in the January to July period.

Cash-strapped local governments issued bonds at a quicker pace last month for construction of major projects, a move that economists believe could spur investment and offer some short-term relief for the economy.

Meanwhile, the troubled property sector remains a major drag on growth. Property investment in January-August contracted 10.2% from the previous year, unchanged from a 10.2% slide in January-July.

© Reuters. FILE PHOTO: An employee works at a production line manufacturing optical fiber cables at a factory of the Zhejiang Headway Communication Equipment Co in Huzhou, Zhejiang province, China May 15, 2019. REUTERS/Stringer/File Photo

While Beijing has ramped up efforts to rescue the housing market, many analysts say much more aggressive steps are needed to help debt-laden developers, and encourage would-be home buyers back to the market.

Analysts at Nomura expect bolder measures to be released in the fourth quarter.

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Business

Boeing faces cash crunch as machinists’ strike weighs on production

Published

6 days ago

September 13, 2024

Claire Bushey

Boeing faces cash crunch as machinists’ strike weighs on production

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A strike at Boeing has cast doubt on the company’s production goals for the 737 Max and raised the spectre of a cash crunch, as its chief financial officer on Friday said the company would fight to preserve its investment-grade credit rating.

Boeing’s investment-grade rating is crucial to its operations and losing it would be a serious blow, meaning the company could face a punishing increase in borrowing costs given a debt load that has swelled to $53bn. The options to keep it would likely include some kind of securities offering to shore up cash.

About 33,000 workers with the International Association of Machinists District 751 walked out at 12:01am on Friday after rejecting a tentative agreement with the company. Chief financial officer Brian West said Kelly Ortberg, the new chief executive is “personally engaged” in addressing the situation.

In June and July Boeing had been building roughly 25 Maxes a month, with plans to raise that to 38 by the end of the year. But West told investors on Friday that “now, obviously, that is going to take longer”.

“I can’t comment on 38 per month,” he said. “That rate is so dependent on the duration of the strike.”

Boeing’s share price closed down nearly 4 per cent at $156.77.

The company has slowed production of the Max this year as it tries to improve the quality of its manufacturing process. Boeing has been scrutinised by regulators, prosecutors and the flying public since January when a door panel, which was missing several bolts, blew off a commercial jet midflight. The US Federal Aviation Administration has capped the group’s production at 38 a month.

The slowdown has cost Boeing billions in free cash flow. A lengthy strike would impede the company’s ability to deliver planes to customers, further hurting its cash flow.

The credit rating agencies are closely watching Boeing’s deliveries and ability to generate cash. All three have the group rated one notch above junk, on a negative outlook. Moody’s on Friday said it had placed the company on review for a downgrade.

“Boeing’s investment-grade credit rating has limited headroom for a strike,” said Fitch Ratings analyst Dino Kritikos. “If the current strike lasts a week or two, it is unlikely to pressure the rating. However, an extended strike could have a meaningful operational and financial impact, increasing the risk of a downgrade.”

When asked if Boeing may raise debt or equity before early 2025, West said the company had two priorities: keeping its investment-grade rating and stabilising its supply chain and factory floor.

“That last objective just got harder based on last night,” he said. “So we are perfectly comfortable to supplement our liquidity position to support these two objectives.”

West said it has told suppliers which are not behind on their deliveries to stop shipping to Boeing’s factories in Renton, Washington. Supply schedules remain untouched for the group’s South Carolina plant, which builds the 787 and is not unionised.

The work stoppage is “disappointing”, West said, “because things were starting to move in the right direction”.

“We’re working every responsible lever to do what’s right to conserve cash,” he said. “Our expectation — and I don’t have any timetable — is to want to get back to the table and hammer out a deal.”

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Business

Dangers of being a FOMO customer as rates fall

Published

6 days ago

September 13, 2024

Kevin Peachey

Dangers of being a FOMO customer as rates fall

Getty Images Woman lies in bed at night looking at her smartphone

Falling mortgage rates may, at last, be bringing some relief to embattled homeowners and first-time buyers.

In a market described as “frenetic”, lenders are locked in intense competition for new customers while simultaneously trying to hold on to borrowers already on their books.

On supposedly unlucky Friday the 13th alone, big-name providers such as the Nationwide, HSBC and NatWest reduced their fixed rates. In an unusual move, TSB did so for the second time in a week.

Analysts expect further cuts to come, but brokers say the fear of missing out (FOMO) on better deals is paralysing some borrowers.

Failing to act before their current deal expires leaves them exposed to a much more expensive variable rate.

National obsession

During the last couple of years, mortgage rates have featured in discussions from chats around the dinner table to election debates.

About 1.6 million existing borrowers had relatively cheap fixed-rate deals expiring this year. Hundreds of thousands of potential first-time buyers have been hoping to get a place of their own.

Yet, rates have been volatile and much higher than what was the norm for more than a decade.

Line chart showing the average interest rate charged on two-year and five-year fixed deals, according to Moneyfacts. The two-year rate was 5.49% on 13 Sep 2024, and it peaked at 6.86% in July 2023. The five-year rate was 5.15%, and it peaked at 6.51% in October 2022.

The interest rate on a fixed mortgage does not change until the deal expires, usually after two or five years, and a new one is chosen to replace it.

Average rates on new deals are now 5.49% for a two-year deal, the lowest for more than a year. Five-year deals have an average rate of 5.15%, according to the financial information service Moneyfacts.

However, the best, so-called headline, rates are reserved for those borrowing a small proportion of the value of the home (known as loan-to-value). A few are at levels not seen since rates shot up following the mini-Budget in the short-lived premiership of Liz Truss.

“Momentum is really starting to build now and the cuts are coming thick and fast.,” said Emma Jones, managing director at broker When The Bank Says No.

“Borrowers are the winners as lenders seek to compete for all-important market share as we head into the final months of the year.”

‘We took the plunge’

The Bank of England’s interest rate cut in August, with the potential for more to come, is part of the reason for falling mortgage rates.

That came slightly too late for Johnny and Sophie Abbott, whose last mortgage deal expired at the end of July.

Johnny and Sophie Abbott decided to move house

Johnny Abbott Portrait of Johnny and Sophie Abbott, both of whom are smiling — Johnny and Sophie Abbott decided to move house

When they spoke to the BBC in March, the couple from Loughborough, who have three children, admitted every option seemed like a gamble.

In the end, they chose to buy a home that needed renovation.

“We took the plunge and can just about deal with the mortgage,” said Mr Abbott. “It will be great when it’s done.”

In June, the Bank of England said three million households would see their mortgage payments rise in the next two years, and about 400,000 mortgage holders were facing some “very large” payment increases.

A few months ago, Gary Rees expected to have to make serious lifestyle changes when his current deal expires in October. Now, things are looking better.

Yet, typical of many, the benefit is a smaller rise in his monthly mortgage repayments, not a fall. To be blunt, the financial punch won’t hurt as much.

“It’s improved, but my mortgage rate is still likely to double, rather than triple,” he said.

He is expecting to settle on a two-year deal, in the hope of further rate falls. The Bank of England’s next interest rate decision is on Thursday, although analysts are predicting a hold at 5%.

Getty Images A young man stands outside a house looking at his phone with a reflection of a tree in the window behind him

These two cases show that, although things are looking more positive for borrowers, not all are getting an equal benefit. Savers, meanwhile, are seeing the interest they receive worsen.

Brokers say that lenders have been offering the best deals to new, house-purchasing customers, rather than those who are remortgaging.

With relatively few buyers, providers are trying to get a piece of a small pie, according to David Hollingworth, of broker L&C. That includes offering loans at higher multiples of income, up to 5.5 times.

He said that while the lowest rates were “not divebombing”, the market was frenetic.

The market could also improve for remortgagers, he said, as lenders try to hit year-end targets.

Time to act?

Mr Hollingworth said the danger for any borrowers endlessly waiting for even lower rates to come is that they do nothing.

If a fixed deal expires, then borrowers automatically move on to their lender’s standard variable rate – which currently carries an average interest demand of 7.99%, which is two-and-a-half percentage points higher than a new two-year deal.

Adviser Jo Jingree, director of Mortgage Confidence, said people in the process of buying or remortgaging could still switch to a better deal if rates continued to fall before their personal deadline.

“I’ve seen first-hand that customers have been able to achieve revised mortgage offers on the lower rates which will save them money on their monthly payments,” she said.

Borrowers should monitor their rates, particularly a few weeks before their mortgage completes, to ensure they are getting the best possible rate, said Aaron Strutt, of broker Trinity Financial.

He expected rates to keep falling, especially if the Bank of England cuts the base rate on Thursday, or later this year.

With the cost of funding mortgages coming down, some in the industry suggest lenders could have cut rates more quickly.

They say lenders are making smaller price cuts week after week when they could be making larger reductions in one go.

Ways to make your mortgage more affordable

Make overpayments. If you still have some time on a low fixed-rate deal, you might be able to pay more now to save later.
Move to an interest-only mortgage. It can keep your monthly payments affordable although you won’t be paying off the debt accrued when purchasing your house.
Extend the life of your mortgage. The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.