Morning Market Roundup: President Obama & Middle-Class Tax Cuts, German Exports Up, Chinese Inflation Down
Here’s what’s important in the business world this morning:
Boeing: Boeing Co. clinched the first big deal of this year’s Farnborough Airshow on Monday with a firm order from Air Lease Corp. for 75 of its redesigned 737 aircraft worth $7.2 billion.
The order is a big win for the Chicago-based company at the opening of the week-long airshow, south of London, and is the first order for the MAX, a new version of its best-selling 737 aircraft, by a leasing company.
Los Angeles-based Air Lease, which buys planes and leases them to airlines, also has the right to purchase an additional 25 of the planes. The order will take several years to deliver. ALC has ordered a total of 170 airplanes from Boeing. Although the order has a list price of $7.2 billion, purchasers rarely pay the full price for an order of this size.
U.S. Futures: Stock futures fell Monday hours ahead of the start of U.S. earnings season with more signs of instability coming out of Europe.
Dow Jones industrial average futures slid 40 points to 12,687. Standard & Poor’s 500 futures fell 4.5 points to 1,347.10 and Nasdaq futures gave up 2 points to hit 2,607.
The need for European financial leaders, who are gathering in Brussels, to hash out a bailout plan for Spain grew more urgent as borrowing costs for the country hit extraordinarily dangerous levels.
Middle-Class Tax Cuts: President Barack Obama is launching a push to extend tax cuts for the middle class, as he seeks to shift the election-year economic debate from the dismal jobs market to assertions that Republican rival Mitt Romney protects the rich.
Obama, in an address from the White House later Monday, will call on Congress to pass a one-year extension of tax cuts for households making less than $250,000 a year, said senior campaign adviser Robert Gibbs.
The president’s appeal to middle-class voters is aimed at drawing a contrast with Romney and congressional Republicans. The House GOP is expected to make its own push this month for an extension of all the Bush-era tax cuts due to expire at the end of the year, including reductions on wealthier income earners.
Obama opposes extending the tax cuts for Americans with higher incomes, while Romney has said he supports extending the expiring cuts for all income earners.
German Exports: Germany’s Federal Statistical Office says the country’s exports rose in May despite difficulties in the 17-nation eurozone, but the trade balance narrowed as imports increased by an even greater amount.
Exports in May rose by a seasonally adjusted 3.9 percent while imports rose by 6.3 percent compared with the previous month, the office reported Monday.
In unadjusted terms exports were up 0.5 percent to €92.5 billion ($114.5 billion) while imports were down 0.2 percent to €77.2 billion compared to May 2011, for a trade surplus of €15.3 billion in May 2012.
In adjusted terms the surplus was €15 billion.
Exports decreased by 2.3 percent to eurozone areas but rose 0.2 percent elsewhere in the European Union over May 2011. The drop was offset by a 3.4 percent gain to non EU countries.
China: China’s inflation fell to a 29-month low in June, giving Beijing more room to fight a deepening economic slowdown.
Consumer prices rose 2.2 percent over a year earlier, down from May’s 3 percent, government data showed Monday. Food costs rose 3.8 percent.
Lower inflation clears the way for Beijing to cut interest rates or boost spending to reverse China’s deepest slump since the 2008 global crisis with less danger of igniting a spike in politically sensitive living costs.
Premier Wen Jiabao warned over the weekend that the world’s second-largest economy still faces “huge pressure” to decelerate. That suggested Beijing might roll out more stimulus measures following two rate cuts since the start of June, a reduction in gasoline prices and higher public works spending.
The Associated Press contributed to this report.
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