BUSINESS NEWS FEBRUARY 24TH, 2016
DROP IN SALE OF NEW U.S. HOMES
December saw the number of single family home units rise sharply at about 544,000 units. However, Wednesday’s report from the Department of Commerce showed that the rate of home sales dropped 9.2% to the national average of 494,000 units. Despite this plunge in new home sales, which account for 8.3% of the housing market, the overall housing market remains relatively stable. In a poll conducted by Reuters, economists projected an 8% drop in new home sales, to approximately 520,000 units. By region, sales varied greatly. The Northeast, which experienced a blizzard in early January, and the South saw rises of 3.4% and 1.8%, respectively.
WALL STREET LOWER AS OIL DROPS
After Saudi Arabia’s decision to reject a decrease in output, oil prices took a hit on Wednesday, dropping nearly 4%. The slip in crude prices dragged down Wall Street as well. Looking at the net gain, neither the S&P 500 nor NASDAQ showed a gain. The S&P and NASDAQ are both down 6% and 10%, respectively. Of the 10 major sections of the S&P, 9 were down and energy was the lowest, showing a drop of 1.94%. Despite worry over the state of the global economy and the current drag on oil prices, Federal Reserve Chairwoman Janet Yellen has indicated that the Fed plans to continue with its plan of gradually raising interest rates. However, investors are more cautious, citing the weak nature of the global economy as evidence against raising interest rates.
THE FED UNDER TRUMP
After the Nevada caucus, Republican frontrunner Donald Trump looks to maintain that status. One of his action items is to audit the Federal Reserve, a view shared by former candidate Rand Paul and current opposition Ted Cruz. Cruz missed the vote on auditing the Fed, a bill which failed 53-44. Trump’s audit comes from his belief that the Fed is too political. He accused Chairwoman Janet Yellen of keeping interest rates low so that America does not fall into a recession under the Obama administration. Yellen’s chairwomanship ends on February 3rd, 2018. Whether the next President will decide to keep her depends greatly on the election.
JOHNSON & JOHNSON SETTLES IN CANCER LAWSUIT
Jackie Fox died of cancer in 2015, and she claimed her death was a direct result of her family’s use of Johnson & Johnson’s talcum powder. After her death, the family sued the hygiene product company for damages. This is one of nearly 50 cases brought by woman against Johnson & Johnson. The company released a statement saying that its products were safe. Carol Goodrich, a spokesman for Johnson & Johnson, said that while the company strongly disagreed with the outcome because science has proven the safety of talcum powder, they still sympathize with the family and would pay the damages. The feelings about whether talcum powder is carcinogenic are divided.