In the political sphere, Israel launches second phase of the conflict with Hamas. Meanwhile, Trump’s critics hope to use the Fourteenth Amendment to exclude him from the ballot.
In the economic context, the World Bank warns of a possible increase in oil prices. The influence of higher yields on the economy is expected to be a key topic at the Federal Reserve’s policy meeting. In turn, the CEO of HSBC maintains that the most critical situation is behind us in China’s real estate sector.
On the business front, General Motors reaches a tentative agreement with the United Auto Workers union.
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Policy
- Israel has begun what it is calling the second phase of its assault to destroy Hamas in Gaza, a conflict that Prime Minister Benjamin Netanyahu described as his country’s “second war of independence.” Israeli ground forces advanced deeper into the Gaza Strip, bombed targets in Syria and carried out a raid into the occupied West Bank overnight. The Ministry of Health in Gaza, under the control of Hamas, reported this Monday that the number of deaths in the enclave due to Israeli attacks has risen to 8,306 people, including 3,457 children.
- The Fourteenth Amendment, passed in 1868, in Section 3 states that if someone took an oath to support the Constitution and then participated in an insurrection, they cannot hold certain offices. Trump’s critics have used that section of the Constitution through lawsuits arguing that he cannot run again because of his efforts to overturn the 2020 election and his involvement in the storming of the US Capitol on January 6, 2021. The Section 3 does not mention anything about running for public office, and Trump supporters argue that election officials and judges cannot prevent his name from appearing on the ballot. If he wins, it will be up to Congress to confirm whether he can hold office, they maintain.
Economy
- A major escalation of the war between Israel and Hamas, one that spills over into a broader conflict in the Middle East, could cause oil prices to soar by as much as 75 percent, the World Bank warned Monday. Energy prices have remained largely stable since the start of the conflict when Hamas launched an invasion of Israel on October 7. However, economists and policymakers are closely monitoring developments in the war to assess the potential economic consequences.
- With a resilient economy threatening to hamper recent progress in inflation, the impact of higher yields on the economy is expected to be a prominent topic in discussions at the Federal Reserve’s two-day policy meeting that begins Tuesday. . The U.S. central bank, which raised its benchmark short-term rate to its highest level in 22 years in July, is expected to keep it unchanged this week. Since March 2022, the Federal Reserve has raised interest rates at the fastest pace in four decades to combat ever-rising inflation.
- China’s real estate sector was plunged into crisis two years ago when highly indebted developer Evergrande defaulted on its payments. However, HSBC’s chief executive said he believes China’s real estate sector has hit rock bottom and can begin to recover, even though banks are booking hundreds of millions of dollars in charges due to their exposure to a crisis in the sector. As the bank announced its third-quarter results, which included a $500 million provision related to commercial properties in mainland China, Noel Quinn said Beijing’s tougher measures to rein in excesses in the industry had ended.
Business
- General Motors became the latest of the Detroit automakers to reach a tentative labor agreement with the United Auto Workers (UAW) union. The end of union workers’ strikes against the three Detroit automakers gave the auto companies relief after a grueling six-week labor standoff. On Sunday night, UAW President Shawn Fain called the latest agreements a “turning point” for the union and emphasized that its next goal will be to try to organize workers at auto factories, including Tesla, Toyota and Volkswagen, whose plants in the United States are not unionized.
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