BUSINESS NEWS APRIL 15TH, 2016
Stocks dropped slightly Friday after a three-day rally. It was a quiet end to a winning week as Wall Street digested quarterly data that show China's economy grew at its slowest pace since 2009. After a three-day rally that saw the Dow Jones industrial average jump nearly 350 points, or 2%, the blue chip stock gauge ended down 0.2%. The broader Standard & Poor's 500 stock index slipped 0.1% and the technology-dominated Nasdaq composite finished down 0.2%. Overnight, Beijing reported that first-quarter growth came in at 6.7%, which was inline with expectations but marked the world's second-largest economy's slowest pace of growth in seven years. Still, stocks in mainland China's Shanghai composite shrugged off the weaker growth, with shares falling just 0.13%. The major reason for the ho-hum response to more signs of softness in China is the fact that the numbers came in line with investor expectations and still fell between China's full-year estimate range of 6.5% to 7%.
Reports from the FBI indicate a disturbing upward trend in the number of cyber-extortion cases. In the first three months of 2016, a massive $209 million was extorted from businesses. Should the “industry” continue at this rate, the aptly named ransomware will become a $1 billion per year business. Cyber criminals lock up the servers to a particular institution and demand a ransom in order for the servers to be unlocked. One school district in South Carolina was victim to an attack, paying out $10,000 after their servers were locked up.
OPTIMISM IN CRUZ-ONOMICS
Presidential hopeful Ted Cruz made the bold claim on Friday that he could push U.S. GDP growth, currently at 2%, to 5%. While Jeb Bush, former Cruz opponent in the Republican presidential race, was criticized for his claim that he could create 4% growth, Ted Cruz has been lauded for his plan by former Reagan advisor Arthur Laffer. In order to achieve his goal, Cruz says that a flat tax of 10% would need to be implemented. While experts say this would create massive national debt, Cruz counters that the growth would be such that spending cuts would be unnecessary.