Consumer confidence soars under Trump

Consumers are suddenly a lot more confident about the economic future of the United States. That’s a good thing. But it’s also worth noting that consumers don’t always have a great track record when it comes to predicting the financial future.

The Conference Board, an economic research firm, said Tuesday that its latest monthly of consumer sentiment surged in March to the highest level since December 2000.

Note that date. December 2000. At that point in time, the stock market, particularly techs on the Nasdaq, were in the midst of a massive plunge.

The dot-com bubble’s bursting was one factor that led to a recession that started in March 2001 and lasted through November of that year. (That period, of course, included the immediate aftermath of the 9/11 terrorist attacks.)

And another closely watched measure of consumer confidence, The University of Michigan’s Consumer Sentiment Index, hit its highest level since 2000 earlier this month as well.

It’s also worth pointing out that the Conference Board’s consumer confidence index surged right after last November’s election as well — to the highest level since July 2007. The Great Recession began in December of that year and lasted until June 2009.

All this is not to say that the economy is about to enter another downturn just because the notoriously late to the party consumer is suddenly feeling giddy.

It’s understandable why there is suddenly more hope on Main Street these days.

While the Conference Board didn’t mention President Trump by name, it would appear that average Americans — much like small business owners and CEOs — are excited about the possibility of tax reform and stimulus.

“Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects,” said Lynn Franco, director of economic indicators at The Conference Board, in a release.

“Consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months,” Franco added.

Some economists argue that the U.S. is due for a recession soon because we haven’t had one in nearly eight years. This has been a relatively long, albeit shallow, recovery.

Interestingly, and perhaps not surprisingly, the economy is also increasingly being viewed through partisan lenses.

The University of Michigan addresses politics more directly in its consumer confidence reports.

And it noted earlier this month that based on its gauge of economic expectations, Democrats “signaled that a deep recession was imminent” while Republicans felt that “a new era of robust economic growth was ahead.”

What’s more, the most recent political infighting over health care appears to have dented confidence in the economy among Republicans and Democrats.

Polling company Gallup said earlier this week that its latest U.S. Economic Confidence Index hit its lowest level since the election — largely due to the stock market’s recent slide and the failure to repeal and replace Obamacare.

Gallup noted that Republicans still have a healthier view of the economy than Democrats, but added that “rank-and-file Republicans became significantly less confident in the economy last week.”

If that trend continues, it will be interesting to see whether or not Republicans and Democrats alike decide to actually pull back on plans to buy more things over the next few months. At the end of the day, confidence doesn’t power the economy. Shopping does.

If Trump is able to rebound from the collapse of his plan to repeal and replace the ACA and still get financial reform, a reduction in corporate and individual taxes and some level of infrastructure spending though Congress, that could boost the economy.

It may be difficult for the economy to grow at the 4% annualized rate that Trump has promised. But several experts think that 3% — which would be an improvement from the sub-2% levels the U.S. has experienced lately, is doable.

That would feel great for consumers and investors. And their confidence would likely be reflected through more spending.

–CNNMoney’s Matt Egan contributed to this story.

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Tesla’s new China backer: A tech giant with hundreds of millions of users

Elon Musk has a new friend in China.

Tech and gaming giant Tencent just ponied up $1.8 billion for a 5% stake in Tesla.

Led by its media shy CEO, “Pony” Ma Huateng, Tencent is huge. It has a market value of more than $275 billion, eclipsing that of Chinese e-commerce giant Alibaba.

Tencent owns messaging app WeChat, which boasts 889 million active users and is used for texting, paying bills, gaming and even booking karaoke sessions.

Tencent is also China’s largest video game developer and publisher, holding a big piece of the global market. It acquired Finnish company Supercell last year, the maker of popular mobile games Clash of Clans and Clash Royale. Tencent’s online game revenues topped $10 billion in 2016.

So what’s a company known for games and messaging apps doing investing in a popular electric vehicle start up?

Tech companies always want to get in on the next big thing. Right now, that means artificial intelligence and the so-called internet of things, which will play huge roles in the development of driverless and connected cars.

“The gaming industry is really advanced in terms of artificial intelligence,” said Kitty Fok, a Beijing-based analyst with research firm IDC.

“Having Tencent invest in Tesla can help it integrate artificial intelligence and behavior,” she said.

Connected cars will be the next big innovation in the auto industry, said Ka Leong Lo, an auto analyst at Maybank.

In the near future, “there will be many connections between vehicles, infrastructure and people,” Lo said. “This is why Tencent is interested in Tesla.”

The Chinese tech giant is also seeking a bigger global presence.

“There are a lot more people in the United States who know Alibaba,” said Fok. Tencent’s investment in Tesla “is good for their global brand.”

This isn’t Tencent’s first bet on a big U.S. tech name. It quietly invested in Snapchat years ago, according to TechCrunch. Snapchat co-founder Evan Spiegel has even praised Tencent as a role model.

Tencent didn’t say much about the thinking behind its Tesla investment.

“We share Tesla’s vision in creating a better future for the planet,” tweeted Tencent President Martin Lau, saying the Chinese company was “looking forward to working together as a supportive shareholder.”

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Trump can’t bring back coal, mining jobs

President Donald Trump took aim Tuesday at one of President Barack Obama’s signature efforts on climate change: rules designed to make power plants cleaner.

Trump signed an executive order to start undoing Obama’s Clean Power Plan, which seeks to cut carbon emissions by power utilities, one of the largest sources of greenhouse gases.

The administration says Trump is delivering on a key campaign promise: to restore coal mining jobs by eliminating regulations.

But the reality is that the demand for coal in the United States has been declining for years due to capitalism, not government regulations.

The falling price of natural gas is the primary reason for the plunge in use of coal by utilities. Renewable energy sources, such as wind and solar, are also becoming more competitive.

“There are a lot of market forces already driving the utility industry towards cleaner energy,” said Kevin Rennert, visiting fellow with Resources for the Future, a Washington Think Tank concentrating on energy issues. “Getting rid of the [Obama rules] doesn’t change that.”

The environmentalists and other experts say scrapping the rules won’t mean a jobs boom at coal mines. Especially since overseas markets, such as China, are cutting their consumption of American coal and consumers are using more efficient appliances and light bulbs that limit the pace of increased electrical consumption at home.

“The saddest part of this whole thing is Trump is raising false hopes in coal country for a revival that will never happen,” said David Doniger, director of climate and clean air at the Natural Resource Defense Council.

The amount of coal used to produce electricity in the United States has dropped by about 35% since the high point in 2007, according to the Energy Department figures. Most of that decline is attributable to the increased use of natural gas, with renewable energy becoming more of a factor in recent years.

The rules Trump is aiming at were unveiled by Obama in August 2015. The plan set targets for deep cuts in overall carbon emissions by power utilities between 2005 and 2030. But the rules never went into effect, as the U.S. Supreme Court put them on hold while lower courts heard legal challenges which are ongoing.

Still even without the rules being in effect, 2016 was the first year in which natural gas produced more electricity than did coal, according to Energy Department figures. About 35% of electricity came from burning natural gas, while coal, which used to produce half the nation’s electricity, only produced 30% last year. Another 19% came from nuclear power while 15% came from renewable sources.

“The market forces may get us to Clean Power Plan [emission reduction] goals on their own,” said Doniger.

The Energy Department estimates that even without Obama’s rules, the use of coal by power plants through 2050 will remain essentially flat, even while the need for electricity will increase by 35%. Even the head of the coal industry’s trade group isn’t disputing that forecast.

“There is going to be continuing competition between coal, natural and renewable for the power generation market,” said Betsy Monseu, CEO of the Amercian Coal Council. She said the industry’s big concern is that the Obama rules would cause an even sharper drop in demand for coal as states and utilities moved to phase out remaining coal-fired power plants to meet the tougher emissions targets.

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Congress just killed your Internet privacy protections

The future of online privacy is now in President Donald Trump’s hands.

The House of Representatives voted Tuesday to repeal Internet privacy protections that were approved by the Federal Communications Commission in the final days of the Obama administration.

The Senate voted along party lines to undo the rules last week. The resolution now goes to Trump’s desk. The White House said Tuesday it “strongly supports” the repeal.

The rules, which had not yet gone into effect, would have required Internet service providers to get your permission before collecting and sharing your data. The providers have data on your web browsing history, app usage and geo-location.

Providers would also have been required to notify customers about the types of information collected and shared.

The privacy rules were intended to give consumers extra control over their personal data online at a time when everything from smartphones to refrigerators can be connected to the Internet.

Opponents of the privacy rules argued it would place an undue burden on broadband providers while leaving large Internet companies like Facebook and Google free to collect user data without asking permission.

Representative Michael Burgess, a Republican, described the rules as “duplicative regulation” on the House floor and said the repeal would “level the playing field for an increasingly anti-competitive market.”

But rather than apply similar protections to more businesses, the Republican-controlled Congress voted to scrap the rules entirely.

Democrats and privacy advocates have argued this approach effectively hands over the customer’s personal information to the highest bidder.

“It totally wipes out privacy protections for consumers on the Internet,” Democratic Representative Anna Eshoo said on the floor. “I don’t want anyone to take my information and sell it to someone and make a ton of money off of it just because they can get their mitts on it.”

Michael Capuano, a Democratic Representative, took it one step further. “Just last week, I bought underwear on the internet,” he said. “Why should you know what size I take, or the color, or any of that information?

Many broadband providers already share some of their customers’ browsing behavior with advertisers. Providers typically offer the choice to opt out, but consumers may not even be aware of this data collection — let alone how to get out of it.

With Facebook and Google, weary users may choose to limit their activity on the sites or switch to rival services. But switching providers is often difficult, as is hiding your Internet activity from your Internet provider.

“Most people can’t simply walk away from their Internet service provider,” says Neema Singh Guliani, legislative counsel at the ACLU. “They need the Internet and they may not have another option.”

A virtual private network, or VPN, is one option to protect your online activity. One service, NordVPN, says it has seen a “sharp increase” in consumer interest in the days since the Senate vote.

The repeal is a big win for large providers like AT&T and Verizon. They have bet billions on content, including AT&T’s pending acquisition of Time Warner, the parent company of CNN.

This content can potentially be paired with subscriber data to build up lucrative targeted advertising businesses that compete with Google and Facebook.

“I don’t think of it as game over,” says Guliani, who predicts Republicans will face pushback from their constituents for the privacy vote. “I think of it as a setback.”

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Ex-Fox News CFO offered immunity in Roger Ailes investigation

The federal investigation stemming from sexual harassment allegations made against former Fox News chief Roger Ailes took a dramatic turn on Tuesday with a report that prosecutors have offered a former network executive immunity.

Mark Kranz, Fox News’ chief financial officer until his retirement last August, has been offered immunity from prosecution in exchange for his cooperation with the investigation, two sources with knowledge of the matter confirmed to CNNMoney.

The investigation centers on questions about whether 21st Century Fox misled investors by hiding payments to Fox News employees who alleged that they were sexually harassed by Ailes. As CFO, Kranz was directly involved in preparing the company’s financial statements and is thus potentially a key witness in the investigation, the sources said.

Kranz’s lawyer declined to comment on the matter. Spokespeople for the Department of Justice and the U.S. Attorney’s Office for the Southern District of New York, which is handling the investigation, also declined to comment.

Fox News, which has acknowledged that it is in communication with the U.S. Attorney’s office, but says it has not been subpoenaed, referred CNNMoney to 21st Century Fox, which declined to provide additional comment.

The immunity offer was first reported by the Financial Times.

Ailes resigned from Fox News last July amid an internal investigation into multiple sexual harassment allegations against him, including those detailed in a lawsuit brought by former anchor Gretchen Carlson. Anchor Megyn Kelly, who has since decamped to NBC, also told investigators that Ailes harassed her a decade ago.

As CFO from 2004 to 2016, Kranz oversaw financial statements for Fox News and might therefore have been aware of any company payments made to women who accused Ailes of sexual harassment.

Laurie Luhn, a former Fox News guest booker, said last year that she received a $3.1 million settlement in 2011 after accusing Ailes of sexual harassment. That payment, which has not been confirmed by Fox News, was not disclosed to 21st Century Fox investors.

The investigation first came to light last month when attorney Judd Burstein, who represents clients who have brought sexual harassment charges against Ailes, announced in a court hearing that one of his clients had received a subpoena relating to “alleged violations of criminal law by Fox.”

“I was told by the U.S. attorney’s office there is an ongoing criminal investigation, relating to these allegations, all of these allegations,” Burstein said.

At the time, the office leading the investigation was run by then-U.S. Attorney Preet Bharara. Bharara was fired from that office earlier this month after refusing to resign at the request of President Donald Trump.

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Layoffs begin at Rexnord plant, down the road from Carrier in Indiana

Rexnord has issued the first layoff notices for workers at its Indiana plant.

The plant, which makes metal bearings, is less than 2 miles from the Carrier center where President Trump took credit for saving hundreds of manufacturing jobs last year. That claim was inflated, and automation will ultimately replace some of the jobs that were saved.

Rexnord is closing the Indiana plant in June and cutting 300 jobs in all. Twenty-three assembly line workers will lose their jobs in the first round of cuts, said Chuck Jones, the president of the union local.

Most of the 300 jobs will be moved to Mexico. The first round of cuts is to make room for jobs at an assembly plant in Texas, Jones said.

Jones said the plant is offering a week’s pay for every year of service, along with $1,500 and several months of health coverage. But employees can lose those benefits if they accept a new job before their position at Rexnord officially ends.

The Rexnord announcement came a day before President Trump touted a “big announcement” by Ford about jobs in Michigan.

Jones, the union president, said he’s been paying attention to Trump’s proclamations.

“I just want to see some results,” he said. “If he’s sincere about what he’s campaigned on, or what he’s said since he’s been elected, labor would most certainly sit at the table with him and see what we can do to keep jobs here.”

— CNNMoney’s Patrick Gillespie contributed to this story.

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