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Tag: Aerospace/Defense

  • U.S. manufacturing sector shrinks for 14th straight month in December

    U.S. manufacturing sector shrinks for 14th straight month in December

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    The numbers: A closely watched index that measures U.S. manufacturing activity rose by 0.7 percentage point to 47.4 in December, according to the Institute for Supply Management on Wednesday.

    Economists surveyed by the Wall Street Journal had forecast the index to rise to 47.2. 

    Any number below 50 reflects a shrinking economy. Manufacturing has contracted for 14 straight months.

    Key details: The key new-orders index fell 1.2 percentage points to 47.1 in December.

    Production rose 1.8 percentage points to 50.3 from the prior month. Employment picked up slightly but remained below the 50-percentage-point threshold.

    Prices fell 4.7 percentage points to 45.2. That’s the biggest drop since May 2023. Inventories were down 0.5 percentage point to 44.3 in December.

    Customer inventories dipped back below 50 last month to 48.1 in December.

    Only one industry, primary metals, reported growth in December, while 16 reported contractions.

    Layoffs picked up in December, concentrated in the computer and electronics, machinery, and food and beverage sectors.

    Big picture: The contraction in manufacturing is the longest since 2000-01, after the dot-com bubble exploded, said Jay Hawkins, senior economist at BMO Capital Markets.

    Economists said that depressed capital spending has been the key drag on the factory sector, along with weak global trade. They expect that a sharp drop in long-term interest rates will improve the picture, but the change won’t happen overnight.

    What the ISM said: Tim Fiore, chair of the ISM manufacturing survey committee, was relatively upbeat about the data. He said the sector was closing the year in a “really good position” and forecast that the ISM factory index would rise above the 50-percentage-point threshold by March. Fiore said he also expects the inventory number to pick up in coming months.

    What economists said: “The survey indicates that conditions in the factory sector remain unusually weak and that output is likely to continue declining for at least a few more months,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.

    Market reaction: Stocks
    DJIA

    SPX
    were lower in early trading on Wednesday, while the yield on the 10-year Treasury note
    BX:TMUBMUSD10Y
    rose to just below 4%.

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  • GE's stock has its best year on record ahead of final breakup

    GE's stock has its best year on record ahead of final breakup

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    General Electric Co. has saved its best year for its last.

    At the beginning of the second quarter, GE’s power and renewable-energy business will be spun off as GE Vernova, while its remaining business will be relaunched as GE Aerospace. That follows the conglomerate’s separation of GE HealthCare Technologies Inc.
    GEHC,
    -0.28%

    in December 2022.

    But rather than mourn the final breakup of the 150-year old company, which was co-founded by Thomas Edison, Wall Street cheered like it never had before.

    GE’s stock
    GE,
    -0.54%

    has rocketed 95.1% in 2023 as of afternoon trading Friday. That would be by far the stock’s best year on record, based on available data going back to 1972, according to Dow Jones Market Data. The next best year was 1982, when it gained 65.4%. In comparison, the S&P 500 index
    SPX
    has rallied 24.2% this year.

    Read: GE stock sees biggest rally in more than 2 years after a big earnings beat, raised outlook.

    As good as the stock’s performance has been leading up to the breakup, most analysts feel like investors still have more to gain. Keep in mind that in many cases, a company’s parts are worth more individually than they are valued as part of a whole.

    Wells Fargo’s Matthew Akers has a pre-breakup target of $144 on GE’s stock, which implies about 13% upside from current levels.

    “GE combines an attractive business with high aftermarket mix, solid management team with a clean balance sheet, L-T margin upside and built-in catalyst with the Vernova spin in early Q2,” Akers wrote.

    J.P. Morgan’s Seth Seifman said he believes the combined equity values of GE Vernova and GE Aerospace, when including the company’s equity stake in GE HealthCare, is about $149 billion. That compares with GE’s current market capitalization of about $139 billion.

    Of the 18 analysts surveyed by FactSet who cover GE, 12 are bullish and six are neutral, while there are no bears. And the average price target is $139.23, or about 9% above current levels.

    GE’s 2023 marks the culmination of a five-year turnaround for the stock engineered by current Chief Executive Larry Culp, who will remain as CEO of GE Aerospace.

    GE’s stock has nearly tripled in the five years that Larry Culp has been CEO, outperforming the S&P 500 by a wide margin.


    General Electric Co.

    The stock had suffered its worst year ever in 2018, plunging 56.6%, just after it had its fourth-worst year in 2017, when it suffered a 44.8% decline.

    Things got so bad for GE that it got booted from the Dow Jones Industrial Average
    DJIA
    in June 2018, ending a record 111-year run in the blue-chip barometer.

    Culp was named CEO in October 2018. During his tenure, GE’s stock has had only two down years. It fell 3.2% in 2020 as the COVID-19 pandemic wreaked havoc on the aerospace business, and slumped 11.3% in 2022 as spiking inflation and interest rates fueled fears that a recession was on the horizon.

    But since the end of 2018, GE’s stock has climbed 181%, while the S&P 500 has rallied 90% and the Dow has gained 61%.

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  • Airbus Gets Order From Cathay Pacific for Six A350F Aircraft Worth $2.7 Bln

    Airbus Gets Order From Cathay Pacific for Six A350F Aircraft Worth $2.7 Bln

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    By Adria Calatayud

    Airbus and Hong Kong’s Cathay Pacific Airways have signed a purchase agreement for six A350F freighter aircraft with a basic price of $2.71 billion before price concessions, the companies said Friday.

    Cathay said Airbus granted it significant price concessions which might be used toward the payment of the aircraft. The basic price comprises prices for airframe, optional features and engine, Cathay said.

    The aircraft, expected to be delivered by the end of 2029, will expand Cathay’s cargo fleet capacity and will mainly serve long-haul destinations in North America, South America and Europe, it said.

    Airbus said the A350F can carry a payload of up to 111 metric tons and can fly up to 4,700 nautical miles, or 8,700 kilometers.

    Write to Adria Calatayud at adria.calatayud@dowjones.com

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  • Amazon hires three rocket launches from Musk’s SpaceX

    Amazon hires three rocket launches from Musk’s SpaceX

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    Amazon.com Inc.
    AMZN,
    +0.64%

    said Friday it has hired Elon Musk’s SpaceX for three Falcon 9 rocket launches to support deployment plans for Project Kuiper, Amazon’s low Earth orbit satellite broadband network. The deal, the first between the companies, is considered a surprise since the Kuiper system is likely to compete with SpaceX’s Starlink in the satellite broadband market. Amazon previously ordered launches from three of SpaceX’s top rocket rivals, including Jeff Bezos’ Blue Origin. Amazon declined to comment on terms of the new deal with SpaceX.

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  • George Santos expelled from Congress in House vote. Here's what comes next.

    George Santos expelled from Congress in House vote. Here's what comes next.

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    Rep. George Santos on Friday was expelled from Congress in an historic vote, following a congressional panel’s findings of substantial evidence of lawbreaking by the New York Republican.

    Santos becomes just the sixth lawmaker in U.S. history to be expelled, a move that takes two-thirds of the House of Representatives. The vote was 311-114, with 105 Republicans joining 206 Democrats to remove him.

    New York Gov. Kathy Hochul, a Democrat, will have 10 days to schedule a special election for the seat, according to state law.

    That contest could result in Democrats picking up another seat in the narrowly divided House, which Republicans now control with 222 members to Democrats’ 213. The nonpartisan Cook Political Report rates the seat “Lean Democrat.”

    Read: Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    A simple majority, or 218 members when no seats are vacant, is required to pass most House legislation.

    Santos earlier this month said he would not run for re-election in the wake of a House Ethics panel report. That report said the congressman caused his campaign committee to file false or incomplete reports with the Federal Election Commission, and used campaign funds for personal purposes including Botox treatments and luxury goods.

    Now see: George Santos won’t run for re-election after ethics panel finds ‘substantial evidence’ of lawbreaking

    The expulsion vote came amid a busy post-Thanksgiving period for Congress, with lawmakers debating President Joe Biden’s $106 billion funding request that includes wartime aid for Israel and Ukraine. Biden is trying to sweeten his pitch for aid for Ukraine by mixing in $14 billion for securing the U.S. southern border in the hope that it will bring more Republicans on board.

    See: Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Santos on Thursday remained defiant in the face of the looming vote, criticizing his House colleagues and saying he’s watched them “waste the American people’s time over and over again.”

    “This will haunt them in the future where mere allegations are sufficient to have members removed from Congress when duly elected by their people in their respective states and districts,” he said at a news conference on Capitol Hill.

    It will be up to local party leaders to select special-election candidates. On the Democratic side, former Rep. Tom Suozzi and former state senator Anna Kaplan have announced bids; while Republicans Mazi Melesa Pilip, a Nassau County legislator, and former J.P. Morgan executive Kellen Curry are potential picks for their party, according to Semafor.

    Santos is separately facing charges he stole the identities of donors to his campaign and then used their credit cards to ring up tens of thousands of dollars in unauthorized charges.

    Read: Rep. George Santos faces new charges alleging he stole donor IDs, made unauthorized credit-card charges

    Expulsion is the sternest form of punishment and has occurred just five times in the history of the House — three times during the Civil War for disloyalty to the Union and twice after convictions on federal charges, most recently in 2002.

    Two Democrats — Bobby Scott of Virginia and Nikema Williams of Georgia — voted against expelling Santos, while two other Democrats — Jonathan Jackson of Illinois and Al Green of Texas — voted present.

    House Speaker Mike Johnson, a Louisiana Republican, said Santos should not be expelled before a criminal case against him is resolved. Johnson and the three other top House GOP leaders voted for Santos to remain in Congress.      

    Victor Reklaitis and the Associated Press contributed

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  • Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

    Congress returns to face big to-do list: Israel and Ukraine aid, possible border or tax deals, and more

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    Both the House and Senate are due to get back to work this week after their Thanksgiving break, and lawmakers have a lot on their plates.

    A divided Washington put off the threat of a partial government shutdown until mid-January by enacting a short-term spending bill in mid-November, but the measure didn’t address President Joe Biden’s $106 billion funding request that includes wartime aid for Israel and Ukraine.

    So…

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  • Hamas releases first group of hostages under truce agreement with Israel

    Hamas releases first group of hostages under truce agreement with Israel

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    DEIR AL-BALAH, Gaza Strip (AP) — Hamas released the first batch of hostages under a ceasefire deal that began Friday, including 13 Israelis who have been held in the Gaza Strip since the militant group staged a raid on Israel nearly seven weeks ago, according to officials and media reports.

    Twelve Thai nationals were also released, according to Thai Prime Minister Srettha Thavisin.

    Dozens of Palestinian prisoners are expected to be freed by Israel.

    The ceasefire between Israel and Hamas began Friday, setting the stage for the exchange and allowing sorely needed aid to start flowing into Gaza.

    Don’t miss: A secret line of communication and a pivotal U.S. role: How the hostage-release deal evolved — and nearly fell apart — in final days

    There were no reports of fighting after the truce began. The deal offered some relief for Gaza’s 2.3 million people, who have endured weeks of Israeli bombardment and dwindling supplies of basic necessities, as well as for families in Israel worried about loved ones taken captive during Hamas’s Oct. 7 attack, which triggered the war.

    The truce raised hopes of eventually winding down the conflict, which has flattened vast swaths of Gaza, fueled a surge of violence in the occupied West Bank and stirred fears of a wider conflagration across the Middle East. Israel, however, has said it is determined to resume its massive offensive once the ceasefire ends.

    Under the deal, Gaza’s ruling Hamas group pledged to free at least 50 of the about 240 hostages it and other militants took in the Oct. 7 raid. In exchange, Hamas said Israel would free 150 Palestinian prisoners.

    It was not expected that captive Americans would be among those released late Friday afternoon, but the Biden White House said in a statement that it continued to work to ensure that U.S. nationals, including an Israeli-American girl who turns 4 on Friday, are among the initial 50.

    Both sides agreed to release women and children first, in stages starting Friday, and as planned 13 Israelis were released, according to Israeli media, citing security officials. An Israeli official, meanwhile, confirmed that the Thai captives left Gaza and were en route to a hospital in Israel.

    The official spoke on condition of anonymity because she was not authorized to discuss the releases with the media.

    Israel said the deal calls for the truce to be extended an extra day for every additional 10 hostages freed.

    Early in the day, ambulances were seen arriving at the Hatzerim air base in southern Israel, preparing for the release. Those freed will then be taken to hospitals for assessment and treatment, Israeli officials said.

    See: Ambulances positioned at Israeli military base ahead of Hamas hostage release

    Among the Israeli citizens freed some have a second nationality, according to a Hamas official who spoke on condition of anonymity because he was not authorized to discuss details with the media.

    Israel’s Justice Ministry published a list of 300 Palestinian prisoners eligible for release. Thirty-nine — 24 women, including some convicted of attempted murder for attacks on Israeli forces, and 15 teenagers jailed for offenses like throwing stones — were expected to be freed Friday, Palestinian authorities said.

    On Friday, the truce brought quiet after weeks in which Gaza saw heavy bombardment and artillery fire daily as well as street fighting as ground troops advanced through neighborhoods in the north. The last report of air-raid sirens in Israeli towns near the territory came shortly after the truce took effect.

    Not long after, four tankers with fuel and four with cooking gas entered the Gaza Strip from Egypt, Israel said.

    Israel has agreed to allow the delivery of 130,000 liters, or 34,340 gallons, of fuel per day during the truce — still only a small portion of Gaza’s estimated daily needs of more than 1 million liters.

    For most of the past seven weeks of war, Israel had barred the entry of fuel to Gaza, claiming it could be used by Hamas for military purposes — though it has occasionally allowed small amounts in.

    U.N. aid agencies pushed back against the claim, saying fuel deliveries were closely supervised and urgently needed to avert a humanitarian catastrophe since fuel is required to run generators that power water-treatment facilities, hospitals and other critical infrastructure.

    The Israeli military dropped leaflets over southern Gaza, warning hundreds of thousands of displaced Palestinians who sought refuge there not to return to their homes in the territory’s north, the focus of Israel’s ground offensive.

    Even though Israel warned that it would block such attempts, hundreds of Palestinians could be seen walking north Friday.

    Two were shot and killed by Israeli troops and another 11 were wounded. An Associated Press journalist saw the two bodies and the wounded as they arrived at a hospital.

    Sofian Abu Amer, who had fled Gaza City, said he decided to risk heading north to check on his home.

    “We don’t have enough clothes, food and drinks,” he said. “The situation is disastrous. It’s better for a person to die.”

    The hope is that “momentum” from the deal will lead to an “end to this violence,” said Majed al-Ansari, a spokesman for the Foreign Ministry of Qatar, which served as a mediator along with the United States and Egypt.

    But hours before it came into effect, Israeli Defense Minister Yoav Gallant was quoted telling troops that their respite would be short and that the war would resume with intensity and continue for at least two more months.

    Prime Minister Benjamin Netanyahu has also vowed to continue the war to destroy Hamas’s military capabilities, end its 16-year rule in Gaza and return all the hostages.

    Israel’s northern border with Lebanon was also quiet on Friday, a day after the militant Hezbollah group, an ally of Hamas, carried out the highest number of attacks in one day since fighting there began Oct. 8.

    Hezbollah is not a party to the ceasefire agreement but was widely expected to halt its attacks.

    The war erupted when several thousand Hamas militants stormed into southern Israel, killing at least 1,200 people, mostly civilians, and taking scores of hostages, including babies, women and older adults, as well as soldiers.

    The soldiers will only be released in exchange for all Palestinians imprisoned by Israel, according to the Islamic Jihad militant group, which is reportedly holding about 40 hostages.

    It is not clear how many of the hostages are currently serving in the military or whether the militants also consider reserve soldiers to be “military hostages.”

    According to the Palestinian Prisoners’ Club, an advocacy group, Israel is currently holding 7,200 Palestinians on security charges or convictions, including about 2,000 arrested since the start of the war.

    The Israeli offensive has killed more than 13,300 Palestinians, according to the Health Ministry in Hamas-ruled Gaza, which resumed its detailed count of casualties in Gaza after stopping for weeks because of the health system’s collapse in the north.

    The ministry says some 6,000 people have been reported missing, feared buried under rubble.

    The ministry does not differentiate between civilians and militants in its death tolls. Women and minors have consistently made up around two-thirds of the dead, though the new number was not broken down. The figure does not include updated numbers from hospitals in the north.

    Israel says it has killed thousands of Hamas fighters, without presenting evidence for its count.

    MarketWatch contributed.

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  • How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

    How the Hamas hostage-release deal evolved — and nearly fell apart — in final days

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    WASHINGTON (AP) — The negotiations hardly ran smoothly. But, in the end, persistence paid off.

    Six weeks ago, not long after Hamas killed more than 1,200 people in Israel and took scores of others hostage in a surprise assault, the government of Qatar quietly reached out to the United States to discuss how to secure the release of those who were taken captive by the militant group.

    But…

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  • Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

    Here’s how much aid the U.S. gives to Israel — and why it may get billions of dollars more

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    Israel’s military campaign against Hamas has entered its sixth week, and the country is facing a growing backlash against the humanitarian toll of the war as well as uncertainty over the fate of a U.S. military aid package that has stalled amid partisan bickering in Washington, D.C.

    President Joe Biden has requested $14.3 billion in military assistance for Israel as it seeks to destroy Hamas after the group killed 1,200 Israeli citizens and took more than 200 hostage last month. More than 12,000 Palestinians have died in…

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  • How a second set of Trump tax cuts could jack up the national debt

    How a second set of Trump tax cuts could jack up the national debt

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    If Donald Trump were to be elected president in 2024, what would it mean for U.S. tax policy and the national debt?

    There are growing expectations that he could deliver another round of big tax cuts, with the reductions coming right as those enacted in 2017’s Tax Cut and Jobs Act are due to expire in 2025.

    “If Republicans hold their House…

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  • How the Biden-Xi meeting in San Francisco could help prevent a world war

    How the Biden-Xi meeting in San Francisco could help prevent a world war

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    President Joe Biden will meet with his Chinese counterpart Xi Jinping near San Francisco Wednesday, and hanging over the summit is the threat of war over the island of Taiwan, a conflict that would likely cripple the world economy and plunge the U.S. and its allies into a devastating global conflict.

    Experts are divided on how Biden can best avoid such an outcome, but there is a consensus that a war with China would be extremely costly in economic, political and human terms. China has long seen self-ruled Taiwan as a breakaway province.

    Also read: Biden says his goal for Xi meeting is to get U.S.-China communications back to normal

    “The U.S. Air Force and Navy would have to operate in an environment unlike anything they’ve seen since World War II,” said Mark Cancian, a former Marine Corps colonel, Defense Department official and senior adviser at the Center for Strategic and International Studies.

    Earlier this year, Cancian led a wargame simulation of what would happen if China attempted an amphibious invasion of Taiwan and found that if the U.S. intervened to defend the island, it would likely lead to the loss of dozens of ships, hundreds of aircraft and 15,000 U.S. casualties in just the first month of the war.

    Other experts argue that this is too optimistic a scenario. Lyle Goldstein, director of the Asia Engagement program at the think tank Defense Priorities, criticized the war game in a recent panel discussion as too optimistic in its estimate of the forces China would bring to bear in a Taiwan invasion, arguing that the Chinese would use their coast guard and merchant marine as well as military vessels to invade the island.

    “The idea that we would have anywhere near the munitions to sink tens of thousands of ships that would be involved is a major fallacy,” he said, adding that a war with China would make the conflicts in Ukraine and Gaza “look like small brushfires.”

    Biden and Xi last met about a year ago in Indonesia, and the U.S. leader at the time told his Chinese counterpart that he objected to China’s “coercive and increasingly aggressive actions” toward Taiwan. Speaking with reporters on Nov. 9, a senior Biden administration official said the U.S. is concerned about “a ramping up of military activities around Taiwan in ways that are unprecedented, that are dangerous, that are provocative.”

    Now see: Taiwan says more than 100 Chinese warplanes flew toward the island in past day

    Economic fallout

    The CSIS report underscores the damage that U.S. armed forces and those of its allies would suffer in a war with China, but the economic fallout would also have a profound affect on Americans at home.

    “It’s almost hard to calculate the just how bad a Chinese invasion of Taiwan would be economically,” said Zack Cooper, a senior fellow at the American Enterprise Institute and former National Security Council official under President George W. Bush.

    Barron’s: China’s clout undimmed as U.S. companies line up to meet Xi Jinping. Why it’s a two-way street.

    He noted that because of Taiwan’s central importance in the supply chain for advanced semiconductors
    SMH,
    it could grind to a halt markets for advanced electronic devices as well as consumer goods like automobiles that increasingly rely on computer chips.

    “I think we’d be looking at a global financial crash that’s more in line with what we’ve seen in World War I and World War II than anything we’ve seen recently,” he said.

    Market observers have latched onto the idea that China’s recent economic woes make it less likely that it will behave aggressively on the global stage.

    “If Chinese consumers have been spooked by COVID lockdowns and a cascading property collapse, imagine how an escalating confrontation might shatter their outlook,” wrote Christopher Smart, managing partner at Arbroath Group, in a recent note.

    But some U.S. policymakers disagree, including Republican Rep. Mike Gallagher of Wisconsin, chairman of the House select committee on competition with China, who said at a recent event that it’s “plausible that as China confronts serious economic and demographic issues, Xi Jinping could get more risk accepting, and could get less predictable and do something very stupid.”

    Biden’s task

    The foreign policy community in Washington is divided over what the best strategy for deterring a Chinese invasion, with some emphasizing restraint and others the need to show strength in the face of a progressively belligerent Xi Jinping.

    “Taiwan is increasingly discussed as being a critical strategic location for the United States that it must defend and can’t allow to fall to China because it will have a domino effect across the region,” said Michael Swaine, a China expert and senior research fellow at the Quincy Institute for Responsible Statecraft.

    He added that this is a departure from the stance the U.S. adopted in 1979 when it established official relations with the People’s Republic of China, which was that it does not seek Taiwanese independence and would not stand in the way of a peaceful reunification.

    Biden has underscored this drift with several statements in recent years that the U.S. would defend Taiwan if China were to try to take it by force, a change from the so-called strategic ambiguity that has guided U.S. policy in the past.

    Swain argues that the Biden administration must do more to foster communication with China on a broad set of issues and take seriously Chinese concerns that the U.S. alliance system in Asia is seeking to contain Chinese growth with military means.

    Others argue that Xi Jinping is a rational actor and U.S. efforts to foster alliances in the region are necessary to show China that a Taiwanese invasion would be costly and potentially threaten the Chinese Communist Party’s rule.

    “There’s a big difference between Xi Jinping and Vladimir Putin,” AEI’s Cooper said. “Most experts don’t see Xi as a risk taker, and we need to be doing everything we can to have the deterrence capability to convince him not to start a conflict.”

    The summit

    It’s unlikely that the public will will see evidence from Wednesday’s meeting of thawing tensions over the Taiwan issue, as the two sides have already said there will be no joint statement issued, Swaine of the Quincy Institute said.

    “They will repeat their talking points on Taiwan and move on,” he said. “But it’s possible we could see them state very clearly their commitment to resuming a crisis communication dialogue” between each country’s militaries, which was cut off following former House Speaker Nancy Pelosi’s visit to Taiwan last year.

    Cooper of AEI said that the reason for the meeting isn’t concrete deliverables, but mutual understanding that can result from a leader-to-leader dialogue.

    “The real value of the Xi meeting is the administration’s ability to interact with him directly and try to understand better how he’s thinking, what information he’s getting,” he said. “It’s not something you’ll see in a statement, it will be done behind closed doors and judging the aftermath will be difficult.”

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  • Virgin Galactic to cut staff to focus on lower-cost Delta spacecraft

    Virgin Galactic to cut staff to focus on lower-cost Delta spacecraft

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    Commercial space-flight operator Virgin Galactic Holdings Inc. on Tuesday said it would cut staff in an effort to focus on developing its new class of Delta spacecraft that are expected to cost less and bring more profit.

    Management, in an email to employees, did not offer specific figures on the cuts, while citing a shaky investing environment as part of the reason for them. The message said the company would offer more details during its third-quarter earnings call on Wednesday.

    Virgin Galactic
    SPCE,
    +2.96%
    ,
    when reached on Tuesday, declined to offer additional information. Executives over the summer said they expected commercial service for Delta ships to begin in 2026, after testing in 2025.

    Shares were little changed after hours on Tuesday. The stock has fallen 50.4% so far this year.

    The cuts follow a handful of space flights this year from Virgin Galactic, which was founded by billionaire Richard Branson. But Chief Executive Michael Colglazier, in the email, said that following successes from the spaceship Unity and its carrier mothership, Eve, the company needed to “reduce our reliance on unpredictable capital markets.”

    “To profitably scale our business, we must first invest upfront capital to create a fleet of ships based on a standardized production model — the Delta Class ships,” Colglazier said in the email.

    He added that “uncertainty has grown in the capital markets,” with higher interest rates pressuring borrowing and “geopolitical unrest” making for a more cautious environment. He said the Delta spacecraft played a key role in expanding flight service and profitability, and that it was crucial to focus on bringing them into service.

    “Interest rates remain high, which adds pressure to companies who are investing today for profits that will come in the future,” he said. “Geopolitical unrest continues to expand, and the combination of these factors makes near-term access to capital much less favorable.”

    “The Delta ships are powerful economic engines,” he continued. “To bring them into service, we need to extend our strong financial position and reduce our reliance on unpredictable capital markets. We will accomplish this, but it requires us to redirect our resources toward the Delta ships while streamlining and reducing our work outside of the Delta program.”

    He said employees would be notified of their job status between Tuesday and Thursday. Employees will be working from home for the rest of the week, Colglazier said, adding that on-site work locations would be unavailable through that time.

    “Delta ships have been designed to have a relatively low unit-production cost and have a material improvement flight cadence relative to our initial ship, VSS Unity,” Colglazier said on Virgin Galactic’s earnings call in August.

    “The Delta development process has yielded some excellent enhancements to the ship’s architecture, particularly with regard to manufacturability and maintainability,” he said. “And we are tracking well against our primary ship-performance criteria.”

     

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  • Louisiana Rep. Mike Johnson nominated for speaker by House Republicans

    Louisiana Rep. Mike Johnson nominated for speaker by House Republicans

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    House Republicans on Tuesday night voted for Rep. Mike Johnson to become their latest nominee for speaker of the U.S. House of Representatives, with the Louisiana congressman’s selection capping a tumultuous day in which Rep. Tom Emmer was briefly the nominee.

    Johnson, vice chair of the House Republican Conference, picked up support in two rounds of voting and drew a majority votes in a third ballot, topping the number of votes cast for Rep. Byron Donalds of Florida. That’s according to posts on social media by Rep. Elise Stefanik of New York, who as chair of the conference is the No. 4 House Republican.

    The GOP-run House wasn’t due to hold a floor vote on the speaker position on Tuesday night, but the chamber could do that Wednesday.

    Analysts have been warning that the long process of picking a new speaker is preventing the Republican-run House from addressing crucial matters, such as supporting Israel and passing a budget to avoid a government shutdown next month that could rattle markets
    SPX.

    It has been three weeks since the historic ouster of former Speaker Kevin McCarthy, a California Republican.

    The selection of Johnson marks the the fourth time that House GOP lawmakers have picked a speaker nominee this month. Emmer of Minnesota, the No. 3 House Republican, was nominated around mid-day Tuesday, beating out Johnson, but bowed out about four hours later after some colleagues and former President Donald Trump refused to support him.

    Rep. Jim Jordan of Ohio secured the nomination on Oct. 13, but was dropped as the nominee last Friday as GOP opposition to him grew over three rounds of voting on the House floor. House Majority Leader Steve Scalise, a Louisiana Republican, was tapped for the post on Oct. 11 but ended his speaker bid a day later due to opposition from fellow Republicans.

    McCarthy on Tuesday floated a plan that would reinstall him as speaker and set up Jordan as the assistant speaker, according to an NBC News report citing unnamed sources.

    In the third ballot on Tuesday night, Johnson scored 128 votes, Donalds got 29 votes, and 44 lawmakers backed people who weren’t on the ballot, according to multiple published reports. Most of those Republicans supported McCarthy, while one supported Jordan.

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  • Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

    Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

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    House Republicans voted Friday in a secret ballot against keeping Rep. Jim Jordan as their nominee for speaker, and they planned to determine a new nominee next week.

    The Ohio congressman had been facing resistance in his bid to become speaker, with the number of fellow Republicans voting against him rising to 25 in a third round of voting Friday on the House floor, up from 22 in a prior ballot. 

    House GOP lawmakers were expected to meet Monday evening for a new forum for speaker candidates. Rep. Kevin Hern of Oklahoma said in a post on X that he was running for the job, and Rep. Jack Bergman of Michigan has indicated he’ll seek the post as well.

    The GOP opposition to Jordan stemmed from a range of concerns, including that his speakership could lead to cuts in defense
    ITA
    spending, as well as the view that he didn’t provide enough support for the speaker bid of House Majority Leader Steve Scalise, a Louisiana Republican. Jordan’s Republican opponents also said they’ve faced death threats for their stance, with Rep. Drew Ferguson of Georgia saying Thursday that the House GOP “does not need a bully as the Speaker.”

    Analysts have been warning that the process of picking a new speaker is preventing the Republican-run House from addressing crucial matters, such as supporting Israel and passing a budget to avoid a government shutdown next month that could rattle markets. It has been 17 days since the historic ouster of former Speaker Kevin McCarthy, a California Republican.

    Related: Israel, Ukraine aid could run up against House dysfunction, making for ‘tragedy,’ analyst says

    And see: Biden seeks $14 billion for Israel, $61 billion for Ukraine in request to Congress

    With the House looking rudderless for more than two weeks, the chamber’s temporary speaker, GOP Rep. Patrick McHenry of North Carolina, has faced calls to take on the job more permanently. But a measure that would have McHenry serve in the post until January stalled on Thursday afternoon due to objections from a number of Republicans, even as Jordan offered his support for it.

    U.S. stocks
    SPX

    DJIA

    COMP
    were losing ground Friday, as rising bond yields
    BX:TMUBMUSD10Y
    and geopolitical tensions continue to take a toll. 

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  • Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

    Jim Jordan dropped as speaker nominee by House Republicans, who plan for new pick next week

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    House Republicans voted Friday in a secret ballot against keeping Rep. Jim Jordan as their nominee for speaker, and they planned to determine a new nominee next week.

    The Ohio congressman had been facing resistance in his bid to become speaker, with the number of fellow Republicans voting against him rising to 25 in a third round of voting Friday on the House floor, up from 22 in a prior ballot. 

    House…

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  • House speaker election: Jim Jordan isn’t a lock for the post before vote this afternoon

    House speaker election: Jim Jordan isn’t a lock for the post before vote this afternoon

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    It wasn’t clear Tuesday if Rep. Jim Jordan would be successful in his push to become the next speaker of the U.S. House of Representatives, with a floor vote drawing near and the Ohio Republican needing the support of a majority of the chamber.

    The narrowly divided chamber is expected to vote in the early afternoon to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last Thursday.

    An ally of former President Donald Trump who secured his party’s nomination for the role on Friday, Jordan needs to have 217 votes in his favor, so he can only afford to have four fellow Republicans vote against him as no Democrats are expected to support him. The House has 221 Republicans and 212 Democrats, with two vacancies.

    While Jordan racked up significant endorsements Monday, more than four House Republicans are on record as being against him and others are leaning toward “no” votes, as shown in the chart below that comes from a CNN producer.

    McCarthy needed 15 rounds of voting in January to secure the speakership.  The California congressman repeatedly saw around 20 fellow Republicans vote against him before finally prevailing.

    There are “plenty of reasons to think” House Judiciary Committee Chairman Jordan will “be able to grind it out once people are on record,” but the situation is still “unsettled,” said Liam Donovan, a former GOP operative who is now a principal at law and lobbying firm Bracewell, in a post on X.

    One possible key is whether support for Jordan declines or not in a second round of voting, according to Matt Glassman, a senior fellow at Georgetown University’s Government Affairs Institute. He made that point in his post below.

    Analysts have been discussing whether a Jordan speakership could mean a greater likelihood of a government shutdown that weighs on markets
    SPX
    in mid-November, when funding is due to run out from last month’s continuing resolution, or CR.

    “Jordan voted against the CR a few weeks ago and has opposed most government spending bills in the past, so some people think he would be comfortable with a government shutdown next month.  That view has some merit, however, as speaker, Jordan would be responsible for helping vulnerable House Republicans who represent competitive districts,” said Brian Gardner, Stifel’s chief Washington policy strategist, in a note.

    “His new role could put Mr. Jordan in the position of having to make compromises with Democrats — new territory for him.  The more likely outcome is that, if elected speaker, Jordan will support an extension of the CR.”

    U.S. stocks
    DJIA

    COMP
    were advancing Tuesday, helped by encouraging earnings from big banks. Investors also are weighing rising geopolitical risks and better-than expected retail sales.

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  • Rolls-Royce to Cut 2,000-2,500 Jobs Globally in Strategic Overhaul

    Rolls-Royce to Cut 2,000-2,500 Jobs Globally in Strategic Overhaul

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    By Ian Walker and Joe Hoppe

    Rolls-Royce Holdings is set to cut 2,000-2,500 jobs worldwide as part of a transformation program and strategy review.

    The U.K.-based aircraft engine manufacturer, which announced the review plan in January, said Tuesday that the new structure will create a more agile business better able to serve customers, and help it improve its capabilities in areas such as procurement and supply-chain management.

    Rolls-Royce currently employs 42,000 people worldwide.

    Write to Ian Walker at ian.walker@wsj.com and Joe Hoppe at joseph.hoppe@wsj.com

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  • House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

    House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

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    Rep. Jim Jordan made progress Monday in his push to become the next speaker of the House of Representatives, winning endorsements from some fellow Republicans who just last week had refused to back him.

    The narrowly divided chamber of Congress is expected to vote around noon Eastern Tuesday to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last week.

    GOP Rep. Ann Wagner of Missouri, who previously said a Jordan speakership was a non-starter for her, switched her stance on Monday. She said in a post on X that her colleague from Ohio “has allayed my concerns about keeping the government open with conservative funding, the need for strong border security, our need for consistent international support in times of war and unrest … as well as the need for stronger protections against the scourge of human trafficking and child exploitation.”

    Similarly, GOP Rep. Mike Rogers of Alabama, who chairs the House Armed Services Committee, announced in a post on X that he was backing Jordan after saying last week that there was nothing that Jordan could do to win his support. Rogers pointed to an accord on an annual Pentagon bill, the National Defense Authorization Act, saying he and Jordan had “agreed on the need for Congress to pass a strong NDAA, appropriations to fund our government’s vital functions, and other important legislation like the Farm Bill.”

    Republican Rep. Vern Buchanan of Florida offered his support for Jordan as well on Monday, though he noted that he’s “deeply frustrated by the way this process has played out.” Another endorsement came from GOP Rep. Ken Calvert of California, who chairs the House Appropriations Committee’s defense subpanel.

    Jordan — who has been endorsed by former President Donald Trumpsent a letter to his colleagues in which he called for coming together after a chaotic two weeks, saying: “It is time we unite to get back to work on behalf of the American people.” The congressman, a co-founder of the hardline House Freedom Caucus and chairman of the House Judiciary Committee, also told CNN that he was confident about Tuesday’s vote, saying: “I feel good about it.”

    Analysts have been warning that the process of finding a replacement for McCarthy is preventing the House from addressing crucial matters, such as avoiding a government shutdown next month and supporting Israel in its war against Hamas.

    House Republicans made Jordan their nominee for speaker on Friday, but he drew just 124 votes while 81 lawmakers backed another candidate for speaker, GOP Rep. Austin Scott of Georgia. In another round of voting on Friday, Jordan still had 55 colleagues voting against him, but he now appears to be flipping some of them to his side.

    One betting market, Smarkets, was giving Jordan a 33% chance of becoming speaker. 

    Spending cuts and shutdown coming?

    Having Jordan as speaker could mean a 1% cut in defense
    ITA
    and non-defense spending, noted Philip Wallach, senior fellow at the American Enterprise Institute, a conservative think tank. That’s because this year’s debt-limit deal includes a provision that calls for such reductions if there aren’t bipartisan agreements on a dozen funding bills before Jan. 1 and instead a reliance on short-term measures known as continuing resolutions, or CRs.

    “It is now clear,” Wallach said during an AEI event on Monday, that Jordan’s “plan is to have us live off continuing resolutions and implement this 1% cut.”

    “That’s a concrete thing where he could say, ‘Well, we’re moving in the right direction. We’ve taken a hard stand,’” the AEI expert added.

    The CEO of one financial advisory firm also sees standoffs in the future.

    “We expect the next U.S. speaker will be less inclined to make deals than McCarthy; in many ways it makes more sense for them, politically, not to be a deal-maker in the current environment,” said deVere Group’s Nigel Green in a statement.

    “We believe that a U.S. government shutdown is now more likely with a new speaker of the House, and this has the potential to create a domino effect in global financial markets
    SPX.

    BTIG analysts Isaac Boltansky and Isabel Bandoroff said the speaker drama suggests that next year’s election will also be full of twists and turns.

    “We have followed every twist and turn of the speakership race, and there is only one takeaway we can share with absolute certainty: This confirms that the 2024 election cycle will be exhausting, volatile, and just downright weird from beginning to end,” they wrote in a note.

    U.S. stocks
    DJIA

    COMP
    closed higher Monday, as investors looked ahead to earnings season and unwound the flight-to-safety trades seen last week on fears the Israel-Hamas war could escalate into a wider conflict.

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  • Jim Jordan nominated for speaker by House GOP amid worries over government shutdown and support for Israel

    Jim Jordan nominated for speaker by House GOP amid worries over government shutdown and support for Israel

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    Rep. Jim Jordan won the nomination Friday to be speaker of the U.S. House of Representatives after launching a fresh bid for the position, as analysts warned that the process of finding a replacement for former Speaker Kevin McCarthy was preventing the Republican-run chamber from addressing crucial matters.

    Jordan, an Ohio Republican who chairs the House Judiciary Committee, said “yup” on Friday morning when he was asked if he was running again for speaker after House Majority Leader Steve Scalise, a Louisiana Republican, ended his bid late Thursday.

    House Republicans voted in favor of Jordan in the afternoon, with 124 supporting him and 81 backing another candidate for speaker, GOP Rep. Austin Scott of Georgia, according to multiple reports. Republican lawmakers then left for the weekend and were expected to reconvene Monday.

    Rep. Austin Scott, a Georgia Republican, also spoke to reporters about the House speaker position on Friday.


    Getty Images

    Scott, who has been in office since 2011, said in a post on X that he wanted to “lead a House that functions in the best interest of the American people.”

    To become speaker of the GOP-led chamber, a candidate must earn the support of a majority of House Republicans. Jordan has crossed that hurdle but now must prevail in a vote on the House floor. Scalise bowed out of the running after it appeared he did not have sufficient support for a floor vote.

    See: House speaker election — how it works

    “[W]e need to be unified and get to the floor, and we want that to happen as soon as possible,” Jordan told Cleveland.com before the GOP vote on Friday.

    Scalise’s decision to drop his bid “delays the resumption of meaningful legislative
    business at least well into next week,” Benjamin Salisbury, director of research at Height Capital Markets, said in a note on Friday.

    A similar warning came from Greg Valliere, chief U.S. policy strategist at AGF Investments. The House has had a temporary speaker — GOP Rep. Patrick McHenry of North Carolina — since Oct. 3, when McCarthy was ousted in a historic vote.

    “This paralysis in the House is becoming a serious issue, as major legislation has stalled,” Valliere said in a note. “A government shutdown can’t be ruled out as the next deadline approaches on Nov. 17. More aid to Israel and Ukraine is widely supported in both parties and in both houses, but can this funding overcome procedural hurdles in the House?”

    Related: Kevin McCarthy’s ouster means chance of government shutdown next month ‘just went up to 80%,’ analyst says

    One betting market, Smarkets, was giving Jordan, a co-founder of the hard-line House Freedom Caucus, a 42% chance of becoming speaker. The Ohio congressman “faces difficult math,” as at least five Republican lawmakers are expected to vote against him on the House floor, and their ranks “may balloon by the time a floor vote is called,” Height’s Salisbury said.

    Other options that have gotten attention include giving more power to McHenry, the temporary speaker, or making a bipartisan deal on a speaker.

    U.S. stocks
    SPX

    DJIA

    COMP
    closed mostly lower Friday, with the selling blamed in part on the Israel-Hamas war.

    Now read: What U.S. political dysfunction means for the stock market and investors

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  • U.S. law enforcement working to prevent violence following Hamas attack, White House says

    U.S. law enforcement working to prevent violence following Hamas attack, White House says

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    None of the U.S. intelligence agencies have any specific intelligence indicating a threat to the country stemming from last week’s attack by Hamas in Israel, but federal, state and local law enforcement are “working around the clock to prevent any violence from occurring,” White House spokesman John Kirby told reporters on Friday. President Joe Biden has directed his administration to “do everything we can to enhance security at home, including especially in the Jewish community and the Muslim community,” Kirby said.

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