Week of May 28, 2021 Weekly Recap & The Week Ahead
1. GOP to Offer Biden Nearly $1 Trillion for Infrastructure Plan — Democratic lawmakers have warned that time is running short to determine whether a bipartisan deal on infrastructure is possible, with progressives already calling for a go-it-alone approach using fast-track budget procedures. A new offer around $1 trillion would still be well short of Friday’s $1.7 trillion proposal from the White House. On Friday, the Biden administration reduced its proposal by more than $500 billion from an initial $2.25 trillion by lowering spending on roads, bridges and broadband and saying he is willing to make investments in the manufacturing sector in separate bills — like the China-focused legislation on the Senate floor this week.
2. HSBC to Exit Unprofitable U.S. Retail Banking — HSBC, Europe’s second-largest bank by assets said it would sell most of its branches on the U.S.’s east and west coast to Citizens Bank and Cathay Bank, respectively, as part of a plan to implement some $4.5 billion of cost cuts, shed 35,000 jobs worldwide, and shift its main focus to Asia. The British-Asian bank is also in talks with U.S. private-equity fund Cerberus Capital Management to unload its loss-making French operations. HSBC lost $547 million in wealth management and personal banking in the U.S. last year, compared with the $5 billion profit it made in Hong Kong and the rest of Asia.
2. Amazon to Buy MGM for $6.5 Billion Excluding Debt — Amazon.com Inc. to buy James Bond movie company Metro-Goldwyn-Mayer, potentially taking one of the last major independent film studios off the market. The proliferation of streaming services, including newer arrivals such as Disney+, HBO Max and Paramount+, has put pressure on Amazon to acquire more programming. MGM’s vast backlog also provides plenty of material at a time when production of new shows and movies is still recovering from the pandemic.
4. Ford Announces $30 Billion Commitment to its Electric Vehicles Future — Ford Motor is expanding its commitment to vehicle electrification, surprising investors with plans to increase spending on electric vehicles to $30 billion by 2025. It added $8 billion to its previous spending goal, and said it will target the additional money for battery production.
Ford, which sold about 4.2 million vehicles in 2020, expects electric vehicles to be 40% of its sales by 2030. Some analysts say its electric-vehicle strategy has lagged behind General Motors and Volkswagen, which is providing its EV technology to Ford for future plug-in offerings in Europe.
5. Senate Republicans Block Jan. 6 Riot Commission — Senate Republicans blocked the creation of a bipartisan, independent commission to investigate the Jan. 6 assault on the U.S. Capitol by a pro-Trump mob, after GOP leaders urged colleagues to reject it. The bill needed 60 votes to advance in the evenly divided Senate, thanks to the chamber’s longstanding filibuster rule. That means 10 Republicans would have had to vote with all 50 members of the Democratic caucus to allow the bill to proceed. Only six did, and the legislation fell short, with 54 votes in favor and 35 against, with 11 senators not voting.
6. Biden Is Expected to Unveil $6 Trillion Spending Plan — the president is proposing a $6 trillion budget for fiscal year 2022, which begins Oct. 1, according to people familiar with the plans. That includes $1.52 trillion in discretionary spending for the military and domestic programs, including more funding for education, healthcare, research and renewable energy, White House officials said in April. Under the proposal, debt as a percentage of annual gross domestic product would within a few years exceed the level at the end of World War II and climb to 117% of GDP by the end of 2031, according to people familiar with the matter. That would be up from about 100% this year.
The week ahead — Economic data from Econoday.com:
