News of Rising Wages Leads to Market Drops
Over the past week, stock markets globally have suffered major declines, as a decade of low interest rates provided by central banks in the United States, Asia, and Europe appears to be coming to an end. Despite stock markets’ continued strength since the recent passage of corporate tax cuts, investors have grown worried that interest rates will increase quicker than expected, as Friday’s jobs report showed that wages have grown at the fastest pace since 2009.
Worried that rising wages could eat into corporate profits and cause the Federal Reserve to worry about inflation, investors proceeded to divert their money from the stock market to safer vehicles like bonds and cash.
While Standard & Poor’s 500-stock index recovered somewhat on Tuesday, it is still 6 percent below its peak in late January. On Wednesday, President Trump finally responded to the market drops, tweeting that, “Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!”
SpaceX Launches Falcon Heavy
On Tuesday, SpaceX successfully launched its Falcon Heavy rocket into space. It was carrying Elon Musk’s 2008 Tesla Roadster, driven by a test dummy named Starman. For several hours, the car sent a livestream back to Earth showing its view as it orbited, and then left, Earth. Falcon Heavy is the most powerful rocket currently in existence, and was sent up in part to prove to the US Air Force that it could “coast,” a requirement for putting heavy national security satellites into orbit. It can carry a payload of 140,000 pounds into low-Earth orbit.
SpaceX also was able to land two of the rocket’s three first-stage boosters upright. This opens the door to creating reusable rocket boosters, which Musk has said would be useful when colonizing Mars. The Tesla will orbit the sun and then head to Mars, though it has overshot its expected trajectory and will end up in the asteroid belt between Mars and Jupiter.
Senate Reaches Bipartisan Spending Deal
Tuesday morning, Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer revealed a deal to increasing spending in military and domestic programs. Specifically, military spending would increase $80 billion and $85 billion over the next two years, and spending on infrastructure, the opioid crisis, child care, and Veterans Affairs would increase as well. The deal also provides aid for areas hit by last year’s natural disasters.
The bill is also paired with a spending measure to keeps the government open past Thursday, when the spending bill passed on January 18th—that ended the three-day shutdown—expires.
The bill now goes to the House, where some Democrats like House Minority Leader Nancy Pelosi have threatened to oppose it until steps are taken to address DACA. While Paul Ryan has supported the deal, some House fiscal conservatives have also opposed the bill amidst worries that the spending increase will add to the deficit.
Pentagon Unable to Account for $800 Million in Spending
The Ernst and Young accounting firm performed an internal audit of the Pentagon, and found that the Defense Logistic Agency failed to document the spending of more than $800 million. The money was spent on construction projects and computer equipment.
According to a DLA spokesperson, “DLA concurs with Ernst and Young’s assessment of our failure to properly account for and track funding to specific construction projects.” Additionally, the Pentagon announced that starting 2018, it will perform annual audits in an effort to better keep track of its money.
In Other News…
Trash collectors in Bogotá, Colombia, have gone on strike, leaving over 3,750 tons of garbage clogging the city.
The Arizona Legislature is considering a bill that would provide incarcerated women with an unlimited supply of feminine hygiene products. Currently, female prisoners get up to 12 free pads a month.