Happy Wednesday and welcome back to Overnight Finance, where we’re preparing for a much chiller April. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
See something I missed? Let me know at slane@digital-staging.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.
THE BIG DEAL: Republican lawmakers are fighting tooth and nail to save the North American Free Trade Agreement (NAFTA) as the White House talks over major changes with Mexico and Canada.
Nearly 30 GOP members, including the House Ways and Means Committee, met with Trump at the White House to discuss a wide range of pressing trade issues as negotiations continue this week on NAFTA.
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Lawmakers have expressed concern over Trump’s repeated threats to withdraw the United States from the 24-year-old trade deal. Republicans insist that withdrawing from NAFTA would cost the U.S. thousands of jobs with severe consequences for agriculture.
The seventh round of NAFTA talks began in Mexico City on Sunday, and the deal’s defenders are looking to cement support for the pact.
Key congressional Republicans are threatening action to protect NAFTA if the White House pulls out. Senate Finance Committee Chairman Orrin Hatch (R-Utah), a staunch Trump ally, promised “veto-proof’ action from Congress if Trump pulls out of NAFTA.
Republicans are also speaking out about Trump potentially slapping tariffs on foreign steel and aluminum. Senate and House GOP lawmakers have asked the White House to tread carefully when determining whether to impose steel and aluminum tariffs for national security reasons.
“I’m also committed to working with the president on narrow and targeted remedies that address China’s distortions without hurting other U.S. industries and workers,” House Ways and Means Committee Chairman Kevin Brady (R-Texas) said.
Trump has until April to decide whether to apply tariffs or quotas on the two metals.
Vicki Needham has all the details here.
Trouble for solar? Meanwhile, U.S. companies are already facing the brunt of Trump’s previously announced tariff on imported solar panels.
American solar energy provider SunPower has already started the process of laying off between 150 and 250 workers, largely from its research and development and marketing positions, CEO Tom Werner told The Hill’s Miranda Green. The cuts will amount to about a 10 decrease in operational expenses.
SunPower estimates that with the new tariffs it will lose $50 million this year, about one-sixth of the company’s overall operating costs. According to Werner, the company fears that next year’s losses will be even more staggering, predicting the firm could lose closer to $100 million.
On tap tomorrow
- Acting CFPB Director Mick Mulvaney and Small Business Administration Chair Linda McMahon speak on small business lending at the U.S. Chamber of Commerce, 9 a.m.
- Senate Banking Committee: Federal Reserve Chairman Jerome Powell testifies on the Fed’s semi-annual monetary policy report, 10 a.m.
LEADING THE DAY
SEC starts wide-ranging cryptocurrency probe: The Securities and Exchange Commission is digging deeper into cryptocurrencies, according to The Wall Street Journal, citing people familiar with the matter.
The SEC “has issued scores of subpoenas and information requests to technology companies and advisers involved in the red-hot market for digital tokens, according to people familiar with the matter,” the Journal reports.
Just so you remember:
- July 30, 2017: “Feds eye crackdown on digital coin investments”
- Aug. 28: “SEC warns investors about cryptocurrency scams”
- Dec. 17: “Bitcoin boom brings new scrutiny from Washington”
- Jan. 4, 2018: “SEC warns cryptocurrency investors of rampant illegal trading“
- Jan. 8: “SEC halts trading of Chinese blockchain company”
- Jan. 12: “Mnuchin says financial regulators will probe impact of cryptocurrencies”
- Jan. 19: “SEC tells investment firms to hold off on cryptocurrency funds”
- Jan. 19: “CFTC files charges in two cryptocurrency fraud cases”
- Jan. 22: “SEC to examine companies that pivoted to blockchain”
- Jan. 25: “Regulators ask Congress for more power to police cryptocurrencies”
- Feb. 6: “Regulators push for ‘coordinated’ approach to bitcoin trading”
Slumping gun stocks: Publicly listed gunmakers have seen their stock values drop following the school shooting that left 17 dead in Florida earlier this month.
Gun shares and school shootings have long had a complicated connection. In the past, shootings have led gunmakers’ stock prices to increase in the short run because worries over new gun reforms leads to more sales.
Analysts say that the value of gunmakers’ shares in the days since the Florida shooting suggest people are skeptical that gun laws will be passed quickly, according to a report in the Financial Times.
Fourth quarter growth revised down: The U.S. economy grew slightly slower in the final months of 2017 than first reported, the Commerce Department reported Wednesday.
Commerce revised its first estimate of economic growth in the fourth quarter of 2017 to 2.5 percent, down 0.1 percent from its earlier estimate. The economy grew 2.3 percent through 2017, up from 1.5 percent in 2016. http://bit.ly/2oBXGBE
Controversial OMB deputy confirmed: The Senate on Wednesday confirmed Russell T. Vought’s as deputy White House budget chief by a 50-49 vote after months of keeping the nomination in limbo.
Vice President Mike Pence cast the tie-breaking vote. Sens. John McCain (R-Ariz.) and Mike Rounds (R-S.D.), were not present for the vote.
As the deputy director of the Office of Management and Budget (OMB), Vought will serve as the right-hand man to Director Mick Mulvaney. The Hill’s Niv Elis tells us about his past comments about Muslims, and the reason why one powerful Republican blocked his nomination: http://bit.ly/2oEeJmL.
MARKET CHECK: Rough. All three major stock indexes extended their losses Wednesday, with the Dow Jones industrial average taking the biggest hit. The Dow closed 1.5 percent lower Wednesday, while the S&P 500 and Nasdaq dropped 1.1 and 0.78 percent each.
Federal Reserve Chairman Jerome Powell will testify before the Senate Banking Committee tomorrow, where he’ll get another chance to either rattle or sooth the stock market. Powell’s Tuesday appearance shook stocks a bit when he signaled the Fed could eventually unite behind four rate hikes in 2018 instead of the currently forecast three.
GOING DEEPER: Monetary policy edition
- The Wall Street Journal’s Greg Ip explores what could happen if a major inflation event sneaks up on us…
- …while The New York Times’ Neil Irwin wonders how low unemployment can go.
GOOD TO KNOW
- The Treasury Department and IRS on Wednesday released a new online calculator that allows taxpayers to figure out if they should make changes to their tax withholding under the new tax law.
- Deloitte agreed Wednesday to pay $149.5 million to settle Justice Department allegations that it failed to halt a huge fraud at a mortgage company that collapsed during the financial crisis.
- Speaking of Treasury withholdings, Secretary Steven Mnuchin asked the University of California, Los Angeles (UCLA) not to post a recording of a speaking engagement where students heckled him.
- Forty-nine percent of Americans who expect to get tax refunds this year plan to put the money into savings, a survey released Wednesday by the National Retail Federation (NRF) and Prosper Insights & Analytics found.
- Four political appointees at the Commerce Department lost their jobs on Tuesday because of problems in their background checks, The Washington Post reported.
- A Georgia Senate committee has moved to scrap a tax break that would benefit Delta Airlines after the airline sought to distance itself from the National Rifle Association (NRA).
ODDS AND ENDS
- Apple co-founder Steve Wozniak got duped out of $70,000 in bitcoin.
- Spotify filed a $1-billion IPO today.
- House Oversight Committee Chairman Trey Gowdy (R-S.C.) said in a letter on Wednesday the committee was probing Housing and Urban Development (HUD) Secretary Ben Carson’s “excessive spending” on the redecoration of his office.