decisions

Global markets were buoyed on Monday morning by expectations of another Fed rate cut and growing optimism that the US and China are moving closer to a trade deal, following comments from President Donald Trump.

The optimism wiped out gains in safe-haven assets such as gold futures and boosted stock exchanges across the globe.

Yet, leading European benchmark indexes opened mostly flat, except for Milan’s FTSE MIB, which was up by 0.61%. Madrid IBEX 35 also gained 0.37% by around 11:00 CEST.

At the same time, European benchmark STOXX 600, as well as the FTSE 100 in London, remained nearly flat. The DAX in Frankfurt gained 0.15% while Paris’ CAC 40 lost less than 0.1%. This came after credit rating agency Moody’s changed France’s outlook from stable to negative on Friday.

Investors in Europe are closely watching for signs of economic health, with one of the strongest indicators — the first reading of the eurozone’s third-quarter GDP — due on Thursday.

On the same day, the European Central Bank (ECB) is scheduled to hold its monetary policy meeting. Given that inflation in the bloc has remained around the bank’s 2% target, the ECB is expected to hold interest rates steady this week for its third straight meeting. The key deposit rate has been at 2% since June.

US-China relations

Across the globe on Monday, US futures were mostly up in pre-market trading. This came as Asian shares rallied too, with Japan’s benchmark Nikkei 225 topping 50,000 for the first time.

Later this week, the US President has a scheduled meeting with the Chinese leader Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum (known as APEC), to discuss the trade deal between the world’s two strongest economies.

US and Chinese officials confirmed on Sunday that they had reached an initial consensus for Trump and President Xi Jinping to finalise during a meeting later in the week.

“I have a lot of respect for President Xi,” Trump told reporters after visiting Malaysia for a summit of Southeast Asian nations, where he reached preliminary trade agreements with Malaysia, Thailand, Cambodia, and Vietnam.

“I think we’re going to come away with a deal,” Trump said.

And investors see it as a strong signal. According to Stephen Innes of SPI Asset Management: “This isn’t just photo-op diplomacy. Behind the showmanship, Washington and Beijing’s top trade lieutenants have quietly mapped out a framework that might, just might, keep the world’s two largest economies from tearing up the field again.”

The enthusiasm brought about a shift in risk-taking among investors, demonstrated by a fall in gold futures. The safe-haven asset’s continuous contract fell by almost 2% on Monday morning, as an ounce was priced at $4,055.50.

The euro and Japanese yen remained flat against the US dollar. One euro was traded at $1.1638, while the greenback cost ¥152.8070. The British pound climbed 0.26% against the US dollar, and the rate was at $1.3345.

Crude oil prices fell after European markets opened, with both benchmarks trading nearly 1% lower. The US benchmark WTI crude’s price was $61.06 a barrel, and Brent was at $65.47.

In other dealings, leading cryptocurrencies were up. CoinDesk’s Bitcoin Price Index (XBX) gained 4.86% and climbed to $115,395.34. Ethereum cost $4,171.84, up by 4.82% on Monday morning in Europe.

Another Fed rate cut on the cards, coupled with Big Tech reports

Wall Street hit record highs on Friday, after lower-than-expected inflation numbers from the US fuelled further hope that the Federal Reserve is about to cut interest rates further this Wednesday.

The data on inflation was encouraging because it could mean less pain for lower- and middle-income households struggling with still-high increases in prices. Even more importantly for Wall Street, it could also clear the way for the Federal Reserve to keep cutting interest rates in hopes of giving a boost to the slowing job market.

The Fed just cut its main interest rate last month for the first time this year, but it’s been hesitant to promise more relief because lower rates can make inflation worse, beyond boosting the economy and prices for investments.

Meanwhile, a flood of big tech companies’ earnings is on its way this week, with Microsoft, Meta and Google-parent Alphabet reporting on Wednesday. Apple and Amazon’s numbers are due to be released on Thursday.

Better-than-expected profits could fuel hopes for steady growth in the US. Information is scarce about the current state of the world’s biggest economy due to the prolonged government shutdown.

NEW YORK — The decision about whether to keep Jimmy Kimmel on his late-night ABC show depends on far more than his jokes. The choice is complicated by a web of business and regulatory considerations involving ABC’s parent company, other media companies and the Trump administration.

It’s the inevitable result of industry consolidation that over years has built giant corporations with wide-ranging interests.

ABC owner Walt Disney Co., a massive organization with far-flung operations, frequently seeks federal regulatory approval to expand, buy or sell businesses or acquire licenses. And the Trump administration has not spared the company from investigations, opening multiple inquiries in just the last few months to investigate alleged antitrust, programming and hiring violations.

Kimmel was suspended from his show last week following comments suggesting that fans of Charlie Kirk were trying to “score political points” over the conservative activist’s shooting death. Federal Communications Commission Chairman Brendan Carr called the remarks “truly sick” and suggested his agency would look into them.

Carr answers to President Trump, a frequent Kimmel target whose dislike of the comedian is well known.

Two companies that operate roughly a quarter of ABC affiliates nationwide, Nexstar Media Group and Sinclair Broadcasting, also said they would not air Kimmel’s show.

Disney took a step in December to avoid a confrontation with Trump by paying $15 million to settle Trump’s defamation lawsuit against ABC News and anchor George Stephanopoulos, in a case many civil rights attorneys considered weak. It also made moves to dismantle some of its diversity, equity and inclusion practices, including removing references in its annual report to its Reimagine Tomorrow program aimed at “amplifying underrepresented voices.”

Apparently that wasn’t enough.

In April, the FCC sent a a blistering letter to Disney Chief Executive Bob Iger saying it suspected the company was so thoroughly “infected” with “invidious” practices favoring minorities that it had no choice but to open an investigation.

Among other questions, the inquiry sought to determine whether Disney had really ended policies designed to ensure characters in its shows and its hiring practices favored “underrepresented groups.”

Meanwhile, a Disney deal struck in January to buy a stake in the streaming service FuboTV fell under scrutiny too, with several reports that the Justice Department was investigating possible antitrust violations.

The Federal Trade Commission also launched an inquiry into whether Disney broke rules by gathering personal data from children watching its videos without permission from parents. Disney settled the case this month by paying $10 million and agreeing to change its practices.

Disney also needs approval from the Trump administration for ESPN to complete its acquisition of the NFL Network.

It hasn’t helped that Disney was a target for many conservatives well before the current controversy. Republican Florida Gov. Ron DeSantis battled with the company over its criticism of a DeSantis-backed law that restricted discussion of sexual orientation in schools.

Kirk wasn’t a fan, either, criticizing Disney when it closed Splash Mountain rides at theme parks three years ago to remove references to the 1946 film “Song of the South,” which has long been decried as racist for its romanticized depictions of slavery.

The move, Kirk’s website posted, was “destructive to our cultural and societal fabric.”

The companies with ABC stations that put out statements disavowing Kimmel have their own business before the government. Nexstar needs the Trump administration’s approval to complete its $6.2-billion purchase of broadcast rival Tegna.

Sinclair has its own regulatory challenges. In June, it entered into an agreement with the FCC to fix problems with paperwork filed to the agency and to observe rules about advertising on children’s shows and closed-captioning requirements. It has also petitioned the regulator to relax rules limiting broadcaster ownership of stations.

The companies are being asked by advocates and others to put aside financial concerns to stand up for free speech.

“Where has all the leadership gone?” ex-Disney Chief Executive Michael Eisner wrote Friday on social media. “If not for university presidents, law firm managing partners and corporate chief executives standing up to bullies, then who will step up for the First Amendment?”

The administration’s attacks on Kimmel have also been criticized in some unexpected places, such as the Wall Street Journal and Bari Weiss’ website, the Free Press — both known for their conservative editorial voices — and by Republican Sen. Ted Cruz of Texas, a staunch conservative and Trump ally.

The comedian’s comments don’t justify the right wing’s move toward regulatory censorship, the Journal wrote in an editorial. “As victims of cancel culture for so long, conservatives more than anyone should oppose it,” the Journal wrote. “They will surely be the targets again when the left returns to power.”

“When a network drops a high-profile talent hours after the FCC chairman makes a barely veiled threat, then it’s no longer just a business decision,” the Free Press wrote in an editorial. “It’s government coercion. Is it now Trump administration policy to punish broadcasters for comedy that doesn’t conform to its politics?”

Bauder and Condon write for the Associated Press.

A United States judge has blocked immigration authorities from immediately detaining and deporting Kilmar Abrego Garcia upon his release from jail.

The decision was part of a one-two punch on Wednesday, as two courts weighed in on the Maryland father’s fate.

Abrego Garcia was catapulted into the national spotlight in March after the administration of President Donald Trump wrongfully deported him to his native El Salvador, despite a court order protecting him from removal.

His case became emblematic of the early days of Trump’s mass deportation drive, with critics accusing the president of taking a slapdash approach that violated the due process of the law.

In recent weeks, Abrego Garcia has been held in a Tennessee prison, as the Trump administration pursues criminal charges against him.

But in one of Wednesday’s twin rulings, US District Judge Waverly Crenshaw in Nashville upheld the finding that Abrego Garcia could be released from jail, rejecting Trump administration claims that he might be a danger or a flight risk.

Crenshaw also expressed doubt about the Trump administration’s claims that Abrego Garcia is a member of the gang MS-13, citing a lack of evidence.

His decision allows Abrego Garcia to potentially be released from detention as he awaits a January trial on human smuggling charges. Still, his release has been once again delayed for a period of 30 days, at the request of Abrego Garcia’s lawyers, who fear he could be deported.

Simultaneously on Wednesday, a second court hearing was unfolding in Maryland under US District Judge Paula Xinis.

She has been hearing arguments about Abrego Garcia’s wrongful deportation to El Salvador, as part of a lawsuit filed by his wife, Jennifer Vasquez Sura.

Given that Trump officials have signalled they plan to deport Abrego Garcia if he is released, Xinis issued a ruling requiring that immigration officials to give him notice of three business days if they initiate removal proceedings.

The Trump administration, Xinis wrote, has “done little to assure the court that, absent intervention, Abrego Garcia’s due process rights will be protected”.

Xinis also ordered the government to restore the legal status that Abrego Garcia had previously been under, which allowed him to live and work in Maryland.

Abrego Garcia was deported to El Salvador in March, in violation of an immigration judge’s 2019 order barring him from being sent back to his home country.

His lawyers have maintained that Abrego Garcia fled El Salvador as a teenager to avoid gang threats.

The government acknowledged that Abrego Garcia’s removal to El Salvador had been the result of an “administrative error”.

Judge Xinis — and later the US Supreme Court — ultimately ruled that the Trump administration had a responsibility to “facilitate” his return to the US.

But the Trump administration doubled down, arguing that Abrego Garcia’s removal was lawful and painting him as a member of MS-13.

Trump even posted a picture of himself to social media holding a photo of Abrego Garcia’s knuckles, with the letters and numbers for “MS-13” digitally superimposed on each finger, next to real tattoos of a smiley face and marijuana leaf.

“He’s got MS-13 tattooed onto his knuckles,” Trump wrote, falsely, on April 18.

Judge Xinis had threatened to find the Trump administration in contempt of court for failing to adequately facilitate Abrego Garcia’s release, or provide meaningful updates. Officials had argued that they had little power to bring him back, given that he was held in El Salvador.

But in early June, the Trump administration abruptly announced Abrego Garcia’s return to the US. At the same time, the Justice Department revealed it had obtained an indictment to criminally charge Abrego Garcia.

At the centre of the government’s case is a video from a November 2022 traffic stop, showing Abrego Garcia driving a Chevrolet Suburban SUV with three rows of seats. A police officer heard in the footage speculates that the nine passengers could be involved in human smuggling, but no charges were brought at that time.

His lawyers have dismissed the government’s case as “preposterous”.

Still, before Xinis’s ruling, the lawyers had requested Abrego Garcia remain in custody as he awaits trial, for fear that he might be immediately deported if released.

While Abrego Garcia cannot be sent to El Salvador again, the Trump administration has maintained he can be legally deported to a third country, even one where he has no personal ties.

Last month, the US Supreme Court ruled that the Trump administration could, at least in the short term, continue to deport individuals to such third-party countries while legal challenges proceed against the practice.

Some of those third-party countries have included South Sudan and Eswatini, formerly known as Swaziland, both of which have faced accusations of human rights abuses in their prisons.

A spokeswoman for the Department of Homeland Security took to the social media platform X on Wednesday to criticise Xinis’s latest ruling.

“The fact this unhinged judge is trying to tell ICE [Immigration and Customs Enforcement] they can’t arrest an MS-13 gang member, indicted by a grand jury for human trafficking, and subject to immigration arrest under federal law is LAWLESS AND INSANE,” spokesperson Tricia McLaughlin wrote, reiterating unproven claims.

Abrego Garcia’s lawyers, however, applauded Wednesday’s court decisions.

“These rulings are a powerful rebuke of the government’s lawless conduct and a critical safeguard for Kilmar’s due process rights,” lawyer Simon Sandoval-Moshenberg said in a statement.

Spending decisions have been made “harder” by the government’s U-turn on welfare changes, the education secretary has said, as she did not commit to scrapping the two-child benefit cap.

Bridget Phillipson told BBC One’s Sunday With Laura Kuenssberg programme that ministers were “looking at every lever” to lift children out of poverty.

But she said removing the cap would “come at a cost” and insisted the government was supporting families with the cost of living in other ways.

It comes after a rebellion of Labour MPs forced the government to significantly water down a package of welfare reforms that would have saved £5bn a year by 2030.

The climbdown means the savings will now be delayed or lost entirely, which puts pressure on Chancellor Rachel Reeves ahead of the autumn Budget.

Before its retreat on benefits, the Labour government was considering lifting the two-child benefit cap, a policy that restricts means-tested benefits to a maximum of two children per family for those born after April 2017.

When asked if the chances of getting rid of the cap had diminished, Phillipson said: “The decisions that have been taken in the last week do make decisions, future decisions harder.

“But all of that said, we will look at this collectively in terms of all of the ways that we can lift children out of poverty.”