The Chinese yuan renminbi has gained the backing from the International Monetary Fund. Fox Business Network generated big ratings following the 2016 Republican presidential debate. New York State workers will receive a minimum wage boost thanks to Governor Andrew Cuomo. BlackBerry is "on a comeback", says T-Mobile CEO John Legere. And a new report from the International Energy Agency (IEA) suggests oil won’t return to $80 until 2020.
These are the five global business headlines from last week.
1. Fox Business Network Draws Record Ratings
The 2016 Republican presidential candidates were at it again this past week. This time, the likes of Donald Trump, Ben Carson, Carly Fiorina, Governor John Kasich and Senator Marco Rubio were debating on the Fox Business Network (FBN) stage. And, once again, the GOP field proved to be valuable in the ratings. Simply put: another primary debate meant another network ratings record.
The latest GOP debate generated an average of 13.5 million views during the primetime hours of 9 p.m. to 11 p.m. The primary debate became the most-watched program for the eight-year-old business news network - the network averages around 102,000 views per business day throughout October and November.
The earlier debate, which featured the lesser-known candidates like Lindsey Graham and Rick Santorum, scored 4.7 million viewers
Moreover, FBN was in first place among all cable networks. The debate’s average audience was in second place (CBS "NCIS" was No. 1) and in the key 25-to-54 demographic FBN was third behind "NCIS" and "The Voice."
What made this even more tremendous for FBN is the fact that it’s available in fewer households across the U.S. than CNN and CNBC.
Thus far, the Fox News Channel debate on Aug. 6 is the most-watched primary debate of 2015 with 24 million viewers. This is followed by CNN’s GOP debate of 23.06 million and Democratic debate with 15.79 million viewers. CNBC set its own record rating with 14 million viewers.
2. Yuan Gains Historic Backing From IMF
It is expected that by the end of the year, the International Monetary Fund (IMF) will formally introduce the Chinese yuan renminbi into the special drawing rights (SDR) basket of reserve currencies. This means the yuan will join the likes of the United States dollar, the euro, the British pound and the Japanese yen in international trade.
The news comes after about a year of China urging the IMF to include the yuan into the SDR. The IMF had been apprehensive for a long time because it believed the People’s Bank of China (PBOC) had too much control over the fate of the yuan - this was apparent this past summer when the yuan devalued and sent stock markets tumbling. Something changed.
IMF chief Christine Lagarde said in a statement that the yuan now meets the criteria of a "freely usable currency." Moreover, Lagarde believes this will generate greater stability in the global economy and help complement the four aforementioned currencies. The PBOC concurred with Lagarde and called it a "win-win benefit for both China and the world."
Reuters columnist Peter Thai Larsen believes that this further strengthens Beijing’s financial reforms, and with this move it makes them even harder to reverse. Here is what he wrote in an op-ed piece:
"The symbolic step is nonetheless a significant boost for Chinese financial reform. Central bank officials have used the promise of international recognition to overcome opposition to opening China’s capital account and liberalising its domestic financial system. Though those reforms are far from complete, joining the SDR makes them harder to reverse. The main benefit from admitting the yuan to the global currency club may be that China is more willing to play by international rules."
Despite the historic nature of this move, the yuan has barely moved upwards on the currency market. Since the announcement over the weekend, the yuan has either stagnated or fallen. For instance, the yuan has fallen below the midpoint rate of 6.375. Ostensibly, the announcement didn’t garner enough buying interest from investors or even produce buzz.
Whatever the case, the news may not please either the Federal Reserve or 2016 Republican presidential candidate Donald Trump, who has been an ardent critic of the PBOC and its monetary policy.
3. New York State Workers Receive a Minimum Wage Boost
Despite having one of the largest state debts in the country and maintaining a budget deficit, New York Governor Andrew Cuomo announced that the Empire State will raise the minimum wage for all New York state workers. How much will they receive? $15 per hour.
The move, which was called "groundbreaking" because no other state has implemented a $15 public sector minimum wage, will benefit about 10,000 state employees. The higher pay will be incrementally phased-in throughout the year 2021.
The governor refrained from using any sort of legislative action to impose this. Instead, the New York wage board, a group that was appointed by the Democratic governor, previously proposed a number of recommendations to raise the minimum wage, including for thousands of fast-food workers. Many are now observing the powerful nature of wage board laws and governors, and showcases how influential labor advocates are in creating momentum for a higher minimum wage. Essentially, minimum wage proponents are honing in on a particular industry and concentrating their battles in certain cities and states.
The increase came as thousands of fast-food workers across the state protested, demanding a $15 minimum wage. Although polls indicate widespread support for hiking the minimum wage, International Franchise Association said in a statement that doing so discriminates against the fast-food industry.
"Applying a new mandatory minimum wage increase to a narrow group of businesses creates an un-level playing field for owners that provide important entry-level jobs and valuable experience for millions of workers across the state of New York,"
said Steve Caldeira, the group’s president and chief executive, in a statement.
Hundreds of pizza parlors in the state have warned that raising the minimum wage to $15 per hour would force them to shut down.
4. Oil Won't Return to $80 Until 2020: IEA
The price of oil has stabilized over the past couple of months. After the fresh supply of oil caused a complete collapse of the oil market since August of 2015, the price of oil per barrel has hovered around the $45 mark. Is there any expectation that oil will ever hit above $100 a barrel again? Not likely anytime soon.
Last week, the International Energy Agency (IEA) released a report that projected the price of oil won’t return to $80 until the year 2020. This isn’t good news for the likes of Canada, Venezuela, Saudi Arabia and Russia, nations that have staked their budgets and economies on the commodity.
Report authors say that demand growth remains under one million barrels per day, investments are still declining and production cutbacks continue. The IEA’s World Energy Outlook report discovered that demand growth will go up each year by about 900,000 barrels per day until 2020. By the year 2040, it will finally hit 103.5 million barrels per day.
"Our expectation is to see prices gradually rising to $80 around 2020,” the IEA said. “We estimate this year investments in oil will decline more than 20 percent. But, perhaps even more importantly, this decline will continue next year as well.”
The IEA added that in the last 25 years there has never been two straight years where investments crumbled, and this could have a serious effect on the immediate future of the world’s oil market.
In the meantime, except Saudi Arabia and Venezuela, oil-dependent countries are looking to diversify their economies. Canadian Prime Minister Justin Trudeau wants to grow the country’s economy "from the heart outwards" and Russia is buying up gold left, right and center. Venezuela is sinking faster than the Titanic and Saudi Arabia is just biding its time.
5. BlackBerry "on a Comeback" Says T-Mobile CEO
BlackBerry hasn’t been able to set the world on fire since it stocked collapsed from around $100 per share into single digits. But after CEO John Chen took over the reins and began to transform the business, some observers believe the Waterloo, Ontario-based tech company is "on a comeback."
Speaking in an interview with CNET, John Legere, CEO of T-Mobile, participated in a word-association game. When given BlackBerry, Legere responded "on a comeback."
Many were surprised by his comments considering that the two engaged in a public breakup a couple of years ago, and Legere even encouraged his subscribers to exchange their old BlackBerry devices for a brand new smartphone.
Meanwhile, T-Mobile does not carry BlackBerry’s latest "Priv," though a spokesperson noted that "we are definitely talking with BlackBerry." If this means a Priv being showcased in their stores, we shall have to wait.
What does BlackBerry think of Legere’s remarks?
"I’m energized about our renewed relationship with T-Mobile and I’m excited about what 2016 will bring we continue to move forward together," Chen said in a brief statement.
On the New York Stock Exchange, BlackBerry hasn’t been able to hit the $10 mark since the springtime, even with the plethora of good news coming out of company headquarters. The company has started to shift its focus on its enterprise security software and large number of patents.
It seems that the Chinese government’s financial reforms are proving to be working. Once more, the Fox Business Network reported record-high ratings following the latest GOP presidential debate. The New York Governor declares that New York state workers will see the minimum wage go up to $15 over the next couple of years. One telecommunications CEO thinks BlackBerry is "one a comeback." And oil investors may not see $80 oil for another four years, according to the IEA.
What do you think were the biggest business headlines from the past week? Let us know in the comments section...