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The Dow Jones Industrial Average surged about 755 points, or 1.8%, amid optimism over a potential government funding deal, with House Speaker Mike Johnson indicating a vote on a measure that would prevent a shutdown. The S&P 500 and Nasdaq also saw gains of 1.7% each, following a PCE inflation report that showed slower price increases than expected. Despite Friday's rally, all sectors remained on track to finish lower for the week.
U.S. markets are set to open lower as a potential government shutdown looms, following the House's rejection of President-elect Trump's funding plan. Futures for the S&P 500 and Dow Jones fell, while FedEx shares surged 9% after exceeding profit expectations. In Europe, major indices declined, and Japan's inflation data exceeded forecasts, impacting the yen's value.
Congressman French Hill has been appointed as the next chair of the House Financial Services Committee, succeeding Patrick McHenry. Hill, a proponent of cryptocurrency legislation, aims to clarify regulatory roles between the SEC and CFTC and investigate initiatives targeting the crypto sector. He will officially assume his role on January 3, 2025.
French Hill, a former community banker from Arkansas, has been elected chairman of the House Financial Services Committee, succeeding Patrick McHenry. Known for his expertise in cryptocurrency regulation, Hill authored the bipartisan Financial Innovation and Technology for the 21st Century Act (FIT21), which aims to clarify the status of digital assets. His leadership is expected to advance legislation addressing the regulatory landscape for cryptocurrencies and support for community banks.
The Senate approved several judicial nominees from the Biden administration, while the House passed bills on small business regulations and civic education. As Congress faces looming deadlines for government funding and a defense authorization bill, the focus shifts to immigration and tax legislation in the new year. The pharmaceutical industry braces for scrutiny with Robert F. Kennedy Jr. nominated as HHS Secretary, and the Republican majority in the House is set to dwindle, complicating legislative efforts.
Elon Musk and Vivek Ramaswamy are advocating for significant federal spending cuts through their Department of Government Efficiency (DOGE), but face challenges in Congress, particularly with a proposed $2 trillion reduction deemed unrealistic. While some Republicans are open to limited reforms, the majority of mandatory spending programs remain off-limits, complicating efforts to achieve substantial cuts. Additionally, proposals to require federal employees to return to the office are gaining traction, though the impact on overall spending may be minimal.
The incoming Trump administration and a Republican-controlled Congress are expected to significantly impact healthcare policy, particularly regarding the Affordable Care Act, Medicaid, and Medicare drug price negotiations. Analysts predict a net negative effect on healthcare companies' credit ratings due to potential increases in uninsured populations and regulatory changes, while decreased scrutiny on mergers and acquisitions may benefit the pharmaceutical sector. Additionally, rising tariffs on medical supplies could further strain the industry amid ongoing inflationary pressures.
Republicans are preparing to extend the 2017 tax cuts, which could increase the deficit by $5 trillion, according to the CBO. While some lawmakers argue that these cuts will stimulate economic growth and revenue, others express concern over the ballooning deficit and advocate for offsetting measures. The internal debate reflects a divide within the party on how to balance tax policy with fiscal responsibility.
Intel is nearing a deal for an approximately $8 billion grant from the CHIPS Act to support its factory-building efforts, despite a reported $500 million reduction due to concerns over its investment commitments. The company is also set to receive a $3 billion contract from the Department of Defense. Amid significant financial struggles, including a nearly $17 billion loss last quarter and plans to cut 15,000 jobs, Intel's CEO has expressed frustration over the slow disbursement of CHIPS Act funds.
At a press conference in Baku, House Republicans, led by Texas representative August Pfluger, expressed strong support for fossil fuels and criticized Biden"s climate policies, suggesting a potential repeal of the Inflation Reduction Act. They argued that the act"s renewable energy provisions contributed to rising inflation, while also hinting at a desire to maintain beneficial aspects of the law for energy costs. The GOP"s stance reflects a broader commitment to fossil fuel dominance, echoing sentiments from Azerbaijani leadership at COP 29.
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