Janet Yellen Sworn In as Treasury Secretary: Live Updates
An internet outage disrupted work from home and remote learning on the East Coast on Tuesday, with some Verizon Fios users unable to rely on popular services such as Zoom and Slack that have become essential during the pandemic.
The outage was first reported on social media around noon and started to clear up about 90 minutes later, though it was not fully resolved until later in the afternoon. The website Down Detector showed users had reported problems all along the Northeast corridor and into Western Pennsylvania.
Verizon said Tuesday afternoon it was working on identifying the root cause of the outage, and said the impact of a cut to a fiber optic cable in Brooklyn was minimal.
The outage attracted the attention of the Federal Communications Commission. The acting chairwoman of the F.C.C. said on Twitter that the “Public Safety and Homeland Security Bureau is working to get to the bottom of what is going on.”
With many workplaces and schools operating remotely, commonplace internet outages now raise new complications for parents and workers.
Jesse Friedman, 37, tweeted at Verizon asking the company for an official statement acknowledging the problem. His son, a seventh grader in Warwick, R.I., has been unable to log in to his virtual classes because of the disruption, and Mr. Friedman said he needed an official explanation to give to the school.
“I don’t know that the school necessarily has a mechanism for understanding when something is down, so we have to provide some level of proof that something occurred that’s out of our hands, to prevent him from being absent,” he said.
Electric carmaker Tesla will be among the main beneficiaries of a war chest intended to ensure that Europe is a player in the fast-growing market for electric car batteries, European officials said Tuesday.
The 2.9 billion euro, or $3.5 billion, fund reflects the increasing geopolitical significance of battery manufacturing as the car industry shifts to electric power. Because batteries are heavy and expensive to ship, carmakers need local production to remain competitive. Any region that lacks a battery industry could lose its auto factories and the jobs and tax revenue they provide.
Asian companies dominate battery manufacturing, and China has moved aggressively to nurture a battery industry, seeing the transition to electric-powered transportation as a chance to get a bigger slice of the global car market.
The money announced Tuesday is in addition to 3.2 billion euros that the European Commission, the European Union’s administrative arm, earmarked for battery research and manufacturing in 2019. Grants will be distributed to companies that are developing new battery technologies or manufacturing, including Tesla’s planned gigafactory near Berlin.
The commission did not say how much Tesla would get, but German media have reported that the sum will be in the hundreds of millions of euros. With a stock market value of $840 billion, Tesla does not have trouble raising money on its own. But the government support helps anchor Germany as one of Tesla’s main centers for battery production and research.
Other beneficiaries include automakers BMW and Fiat Chrysler; companies like SGL Carbon that supply battery-making materials; and producers like Northvolt, which is building battery factories in Sweden and Germany.
The European Union money will be focused on electric vehicles but also include projects designed to reduce the amount of energy it takes to produce batteries, and to recycle used ones. The money will be issued as grants rather than loans, but companies may be required to return money if their projects turn out to be very profitable.
“It makes good sense for European governments to come together to support industry in developing more innovative and sustainable batteries,” Margrethe Vestager, the European competition commissioner said at a news conference in Brussels. “Especially when the resulting innovation can benefit the entire European economy.”
Janet L. Yellen was sworn in as Treasury secretary on Tuesday by Vice President Kamala Harris, a history-making moment as both women are the first to assume two of the most powerful jobs in the United States government.
Ms. Yellen is the nation’s 78th Treasury secretary and the first woman to assume that role in the institution’s 232-year history. She is also the first woman to have held all three top economic jobs in the government, having served as chair of the Federal Reserve and the Council of Economic Advisers.
She is taking on the job at a time of economic crisis, with millions still out of work and the recovery slowing as the virus persists. Ms. Yellen will quickly be thrust into fraught negotiations over how to design and pass a robust stimulus package to help revive an economy that has been hammered by the coronavirus pandemic.
Standing outside the White House, Ms. Yellen took the oath of office with her husband, the economist George Akerlof, and her son by her side. At the conclusion of the ceremony, Ms. Harris said, “Congratulations, Madam Secretary.” To which Ms. Yellen replied, “Thank you, Madam Vice President.”
After Ms. Yellen was sworn in, she said on Twitter that she is proud to be joining the Treasury Department and described the field of economics, and the agency’s mission, as one that can “right past wrongs and improve people’s lives.”
Economics isn’t just something you find in a textbook. It can be a potent tool to right past wrongs and improve people’s lives. That’s why so many of Treasury’s 84,000 public servants joined the Department.
Today, I am proud to be one of them. https://t.co/B4Y5Mpzt9s
— Janet Yellen (@JanetYellen) January 26, 2021
In a sign of the task ahead, the Treasury Department has been rapidly adding staff and advisers in recent days. Ms. Yellen was confirmed by a bipartisan vote on Monday but her top deputy, Wally Adeyemo and other senior officials who will oversee the department’s international affairs, sanctions and domestic finance divisions are not yet in place and will require Senate confirmation.
The White House and lawmakers in Congress have begun the fraught process of negotiating over President Biden’s proposed $1.9 trillion relief bill. Ms. Yellen, a labor economist and former Federal Reserve chair, will now assume a central role in making the case for why the economy needs more fiscal support.
At her confirmation hearing last week, Ms. Yellen told senators that it was time to “act big” and that doing so would be fiscally responsible in the long run by creating a healthier economy.
Gov. Gina M. Raimondo, President Biden’s nominee to be the next commerce secretary, told lawmakers on Tuesday that she plans to help American communities bounce back from coronavirus, aggressively enforce trade rules to combat unfair practices from China and leverage the power of the government to mitigate climate change if confirmed to a cabinet post.
Ms. Raimondo, the governor of Rhode Island and a former venture capitalist, reassured members of the Senate Commerce Committee that she planned to work with them on priorities like protecting American fisheries, expanding broadband access that has become particularly vital for students during the pandemic, and promoting American research into cutting-edge technologies like artificial intelligence and advanced communications.
The Trump administration made heavy use of the department’s authorities to crack down on Chinese technology firms, turning often to the so-called entity list, which allows the United States to block companies from selling American products and technology to certain foreign firms without first obtaining a license. Dozens of companies have been added to the Commerce Department’s list, including telecom giants like Huawei and ZTE, which many American lawmakers see as threats to national security.
Ms. Raimondo declined to commit to keeping Huawei or other Chinese companies on the entity list when pressed to do so by Ted Cruz, the Republican senator from Texas. But she vowed to use the powers of the Commerce Department “to protect Americans and our network from Chinese interference,” adding, “that’s Huawei, ZTE, or any other company.”
“China’s actions have been anti-competitive, hurtful to American workers and businesses, coercive, and as you point out, they are culpable for atrocious human rights abuses,” she said. “Whether it’s the entity list, or tariffs, or countervailing duties, I intend to use all those tools to the fullest extent possible to level the playing field for the American workers.”
Asked about the steel and aluminum tariffs levied on foreign countries by the Department of Commerce during the Trump administration, Governor Raimondo declined to say whether they would be removed or changed. She said that the Biden administration would carry out a broad review of trade policies in consultation with its allies, aggressively pursue uncompetitive trade behaviors from China and ensure that the process that excludes certain companies from the tariffs is swift, fair and objective.
Several senators praised her combination of public and private sector experience, saying those skills could help the country deal with economic damage from the pandemic, invest in American workers and business, and promote the marine and space economies, which the Commerce Department oversees.
Governor Raimondo, said that her background in the private sector as a venture capitalist and her experience as state treasurer and governor of Rhode Island have prepared her to help realize the Commerce Department’s mission to create good-paying jobs and empower American entrepreneurs and workers.
“In this time of overlapping crises, the Commerce Department must be a partner to businesses and workers to help them innovate and grow,” Ms. Raimondo said.
Larry Kudlow, the former CNBC star who served as director of President Donald J. Trump’s National Economic Council, is returning to broadcasting.
Mr. Kudlow was named the host of a new daily show on Fox Business set to begin later this year, the network said on Tuesday. He will also appear on Fox Business and Fox News as an on-air financial analyst starting Feb. 8.
This is the first major television gig secured by a senior Trump aide who stayed in the White House until the president’s term ended last week. It is also something of a hiring coup for Fox Business, which competes against CNBC and will now feature one of its rival’s longtime featured players.
Fox said that it would provide more information about Mr. Kudlow’s new weekday program at a later date.
Mr. Kudlow’s hiring is the latest example of the revolving door between Fox News and members of the Trump administration. But another prominent Trump defender may not be headed to the Rupert Murdoch-owned network so soon.
Kayleigh McEnany, the former White House press secretary, included an “employment agreement” with Fox News on a federally mandated disclosure form she filed earlier this month, signaling that she had landed a job at the cable channel.
Fox News on Tuesday had a different message for Ms. McEnany: not so fast.
“Kayleigh McEnany is not currently an employee or contributor at Fox News,” the network said in a statement.
Ms. McEnany and Fox News did speak after Election Day about a potential on-air role, according to a person briefed on the negotiations who requested anonymity to share the details of private discussions. But the network has paused those talks, even as it remains open to hiring Ms. McEnany at a later date, the person said.
Ms. McEnany did not immediately respond to a request for comment on Tuesday.
As the most prominent on-air defender of Mr. Trump in the tumultuous weeks after his loss in November, Ms. McEnany was a frequent guest on Fox News programs, particularly Sean Hannity’s prime-time show.
Before joining the White House, Ms. McEnany served as an on-air commentator for CNN. She started her media career at Fox News after college, working for Mike Huckabee, the former Arkansas governor and the father of Sarah Huckabee Sanders, another former press secretary to Mr. Trump.
Ms. Sanders joined the network as an on-air contributor shortly after she departed the Trump administration in 2019, but she and the network recently cut ties after she announced her candidacy for governor of Arkansas.
The International Monetary Fund upgraded its outlook for the world economy on Tuesday as the rollout of coronavirus vaccines raised expectations for a stronger recovery in 2021.
The rosier outlook is welcome news for a global economy that has been battered by the coronavirus pandemic in the past year, forcing lockdowns and strict social distancing measures that have sapped business activity.
An updated World Economic Outlook report projected that the global economy will grow 5.5 percent this year after contracting by 3.5 percent in 2020. The forecast was 0.3 percentage point stronger than the fund’s October estimate.
The I.M.F. said that the economic rebound remains uneven, with some economies better able to prop up their economies with fiscal stimulus measures. It predicted the United States economy will expand by 5.1 percent this year, the euro-area economy will expand by 4.2 percent and Japan’s economy will expand by 3.1 percent.
Emerging market economies are projected to expand by 6.3 percent. In China, where the outbreak first surfaced, the economy is expected to expand by 8.1 percent.
Despite the upbeat forecast, the I.M.F. warned that the world economy is not yet in the clear. The logistics of the vaccine rollout could face obstacles and new variants of the virus present a threat. And it remains unclear how immunity to the virus will affect economic activity after so many months of strain.
“Much remains to be done on the health and economic policy fronts to limit persistent damage from the severe contraction of 2020 and ensure a sustained recovery,” the report said.
Twitter has permanently suspended MyPillow chief executive Mike Lindell — one of President Trump’s most conspicuous remaining public defenders — for peddling debunked conspiracy theories about voter fraud in the 2020 elections.
Mr. Lindell’s Twitter account, which had nearly 413,000 followers, was permanently suspended “due to repeated violations of our Civic Integrity Policy,” Lauren Alexander, a Twitter spokeswoman, said in an email.
Mr. Trump’s own account was permanently closed earlier this month for much the same reason — setting off a chain of high-profile bans imposed amid concerns that Mr. Trump and his supporters would use the platform to incite more violence, like the storming of the Capitol earlier this month.
After the Capitol attack, Twitter said it had updated its rules to more aggressively police false or misleading information about the presidential election. As part of that move, Twitter has moved to suspend the accounts of more than 70,000 people who have promoted content related to QAnon, a fringe pro-Trump group that the F.B.I. has labeled a domestic terrorist threat.
Many of Mr. Trump’s most erstwhile defenders backed away from him in the days following the Jan. 6 riot at the Capitol, which was stoked by the former president’s fiery and false speech to supporters claiming massive voter fraud. Not Mr. Lindell.
A few days after the riot, he visited Mr. Trump in the White House — where photographers captured images of his notes, which while only partly visible seemed to suggest the president impose “martial law if necessary” to remain in office.
Dominion Voting Systems, the target of his unsubstantiated claims of massive, intentional voter fraud, threatened to sue Mr. Lindell last week, describing him as a leader of a “misinformation campaign” that has resulted in significant business losses and threats of violence against Dominion employees.
On Monday, Dominion Voting Systems filed a $1.3 billion defamation lawsuit against Trump’s personal attorney, Rudy Giuliani, claiming he had personally profited by using his attacks against the company to promote commercial sponsorships.
Mr. Lindell, 59, filed a lawsuit of his own on Monday, suing the British tabloid The Daily Mail, over a recent report that he was having an extramarital affair, seeking $75,000 in damages.
His high-profile defense of Mr. Trump has earned him a devoted following on the right, but might have significant implications for his business. Bed Bath & Beyond and several other chains have said they plan to stop selling MyPillow products.
The S&P 500 rose slightly in afternoon trading Tuesday. The index has drifted near a record high for the past week.
Janet L. Yellen was confirmed as Treasury secretary on Monday and was sworn in on Tuesday. Investors will be watching how she and the Biden administration move forward a $1.9 trillion stimulus proposal. Over the weekend, lawmakers from both political parties questioned whether such a large package was needed, while others expressed the need to make more aid available quickly.
Shares in GameStop, a struggling video game retailer, continued to rally on Tuesday. The shares have already jumped more than 300 percent this year as small investors have piled into options on the company, placing risky bets that the price of the stock will keep going higher.
Most European indexes gained, led by corporate deals. Shares in Naturgy Energy, a Spanish utilities company shifting to renewable energy, rose 16 percent after IFM, an investment company, offered to buy a large stake. Shares in EQT, a large Swedish private equity firm, jumped 15 percent after it bought a U.S.-based real estate company, Exeter Property Group.
The Stoxx Europe 600 index rose 0.6 percent.
European stocks and government bonds have proved resilient to the political turmoil in Italy. Prime Minister Giuseppe Conte resigned on Tuesday. He had struggled to regain support after a junior partner in his coalition government pulled out this month.
Britain’s unemployment rate rose to 5 percent in the September-November period, the highest level in four and a half years. Although the government’s furlough program has prevented the rate from surging higher, there are some signs that the labor market was losing momentum late last year, during the second wave of the pandemic. For example, the number of job vacancies increased by 81,000, almost half the number from the previous quarter.
“While the labor market continued to deteriorate, the furlough has held back the tide on jobs losses,” said Nye Cominetti, an economist at the Resolution Foundation, a think tank. “Around one-in-six private sector workers were furloughed during England’s second lockdown in November, and even more are likely to be furloughed today.”
Asian stock indexes dropped on Tuesday after China’s central bank withdrew cash from the banking system and an adviser to the central bank warned about bubbles in asset prices including stocks and property.
The Hang Seng Index in Hong Kong closed 2.5 percent lower. On Monday, it had climbed to a one-year high.
The food giant PepsiCo is jumping on the Beyond Meat bandwagon.
The two companies announced Tuesday that they had formed a joint venture called The Planet Partnership to produce a line of plant-based protein snack and beverage options.
The announcement, which did not provide details on the types of products or when they would be available.
For Beyond Meat, the relationship is an expansion beyond the meat aisle. The company, which was founded in 2009, has previously teamed up with restaurant chains like McDonald’s, Subway and Pizza Hut to test or supply plant-based burgers, meatballs and other products in the U.S. and abroad.
Beyond Meat’s stock has almost tripled from its low of $54 last March, despite the hit to its business as dine-in restaurants struggle under coronavirus restrictions. Some Wall Street analysts have warned that Beyond Meat’s adoption and sales growth could slow as large burger-focused chains like McDonald’s, Shake Shack and others focus on developing and launching more chicken-sandwich offerings.
Beyond Meat has also become another battleground between short-sellers and day traders and small investors trying to drive the stock higher and squeeze out quick profits as they did with GameStop’s stock in recent weeks. In the past two weeks, Beyond Meat’s stock has jumped to $158 from $125.
Every three months, corporate America gives investors a look at its books — offering updates on how sales and profits fared in the latest quarter, and usually providing a sense of what to expect from the rest of the year.
It can be an important period for the stock market, as traders learn how well their expectations matched up with reality. With the pandemic raging and the recovery floundering, earnings seasons gives investors another bead on the state of the economy.
(Earlier this month, for example, several big banks said they were cutting down reserves meant to protect against a downturn — a clear sign that they’re feeling better about things — and the news helped bolster stocks.)
But the latest earnings season also comes at a time when investors are starting to wonder if the stock market’s rally has gone too far, and whether stocks are in a bubble as prices become increasingly detached from a company’s profits and growth prospects.
How Wall Street reacts to the incoming results could help show how important (or unimportant) earnings, sales and growth are to share prices.
This week is the busiest of the fourth-quarter earnings season, with results expected from a third of the companies in the S&P 500 — including technology giants Microsoft, Apple, Facebook and Tesla. Overall, Wall Street analysts expect that profits at S&P 500 companies will be down 7 percent compared with the fourth quarter of 2019, according to FactSet data.
So far, results from the first 66 companies in the S&P 500 that reported earnings have been slightly stronger than usual. About 88 percent of those companies did better than analysts expected. Wall Street is notorious for underestimating how companies will do, but that share of companies that “beat” is higher than what’s typical.
Strangely, however, investors have seemed downright dismissive of better-than-expected earnings results, and that could be a bad omen for the market.
Usually, when a company does better than expected, its shares rise. But, through Friday, companies that beat expectations have actually underperformed the broader market, according to Bank of America analysts.
Such a reaction is yet another indication that stock prices are becoming increasingly untethered from fundamentals. In fact, Bank of America analysts noted that they haven’t seen this sort of reaction to earnings results since the dot-com bubble was beginning to deflate.
“The last time we saw such a perverse market reaction to earnings was during 2Q 2000 earnings season, after which the S&P 500 fell by 13 percent over the next three months,” they wrote.