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Infrastructure vote: Senate advances bipartisan bill

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The Senate voted Wednesday to advance a bipartisan infrastructure plan, a critical step toward Democrats passing their sweeping economic agenda.

Senators voted 67-32 to push the bill forward; 17 Republicans and all 50 Democrats voted yes.

The vote opens the process to debate and amend the proposal, which would put $550 billion into transportation, broadband and utilities. While senators who backed the procedural motion could oppose a final package, Wednesday’s vote bodes well for its chances of passage.

The deal came together earlier in the day after Democratic and Republican negotiators resolved disputes over transit and broadband funding, among other issues. The plan was trimmed from the $579 billion in new spending senators and the White House agreed to last month — a sum many Democrats considered paltry.

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Supporters of the bill have hailed it as a needed investment that will boost the economy as the U.S. tries to emerge from the coronavirus pandemic. Democrats still face a range of pitfalls as they try to get the bipartisan bill and their separate $3.5 trillion spending package to President Joe Biden‘s desk in the coming months.

Senate Majority Leader Chuck Schumer (D-NY) speaks briefly to reporters after a meeting with Senate Democrats at the U.S. Capitol on July 28, 2021 in Washington, DC.

Drew Angerer | Getty Images

Senate Majority Leader Chuck Schumer, D-N.Y., will have to keep all 50 members of his caucus and at least 10 Republicans on board to ensure the infrastructure plan passes. House Speaker Nancy Pelosi, D-Calif., will need to win progressive support for the smaller-than-desired bill in a narrowly divided chamber.

A second, separate $3.5 trillion plan to invest in child care, paid leave, education and measures to curb climate change could pose more problems. Every Democrat in the Senate will need to support the package to pass it without Republican votes.

Some Democrats, such as Kyrsten Sinema of Arizona, have signaled they want a smaller final budget reconciliation bill. Sinema was the lead Democratic negotiator on the bipartisan bill.

U.S. Sens. Kyrsten Sinema (D-AZ) (L) and Mitt Romney (R-UT) arrive for a bipartisan meeting on infrastructure after original talks fell through with the White House on June 08, 2021 in Washington, DC.

Kevin Dietsch | Getty Images

Attempts to appease centrists could alienate liberals who worry the bipartisan infrastructure bill fails to do enough to address climate change or strengthen the social safety net.

Schumer aims to pass both the bipartisan bill and the budget resolution that sets up the reconciliation process before the Senate leaves for its recess next month. The Senate will have to rush to pass both measures on Schumer’s timeline in an institution not known for speed.

Pelosi has insisted she will not bring the infrastructure bill or budget measure to the House floor until the Senate passes both of them.

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All-electric aircraft from Rolls-Royce completes maiden flight

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Matt Cardy | Getty Images News | Getty Images

Rolls-Royce’s first all-electric aircraft has completed its maiden flight, soaring across skies in the U.K. for around 15 minutes this week.

In a statement, the company said the aircraft’s trip on Wednesday marked “the beginning of an intense flight-testing phase” that would involve the collection of performance data on its electrical power and propulsion system.

According to Rolls-Royce, the airplane — dubbed the “Spirit of Innovation” — utilized a 400 kilowatt electric powertrain “with the most power-dense battery pack ever assembled for an aircraft.” Eventually, the firm wants the aircraft’s speed to exceed 300 miles per hour.

The Spirit of Innovation is the result of a program called ACCEL, or Accelerating the Electrification of Flight. Partners in the initiative include electric motor and controller specialist YASA and Electroflight, which Rolls-Royce described as an “aviation start-up.” YASA is a wholly-owned subsidiary of Mercedes-Benz.

In terms of funding, 50% has come from the Aerospace Technology Institute in partnership with the U.K. government’s Department for Business, Energy & Industrial Strategy and Innovate U.K.

In a statement issued alongside Rolls-Royce’s announcement, U.K. Business Secretary Kwasi Kwarteng said the aircraft’s flight was “a huge step forward in the global transition to cleaner forms of flight.”

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The environmental footprint of aviation is significant. According to the International Energy Agency, carbon dioxide emissions from aviation “have risen rapidly over the past two decades,” hitting almost 1 metric gigaton in 2019. This, it notes, equates to “about 2.8% of global CO2 emissions from fossil fuel combustion.”

Elsewhere, the World Wildlife Fund describes aviation as “one of the fastest-growing sources of the greenhouse gas emissions driving global climate change.” It adds that air travel is “currently the most carbon intensive activity an individual can make.”

Looking ahead, Rolls-Royce — not to be confused with Rolls-Royce Motor Cars, which is owned by BMW —said it would use and apply tech from ACCEL in products connected to the commuter aircraft and electric vertical takeoff and landing markets.

Alongside aircraft manufacturer Tecnam, Rolls-Royce is also working with Norway-headquartered airline Wideroe on the delivery of “an all-electric passenger aircraft for the commuter market.”

The last few years have seen a number of companies attempt to develop plans and concepts related to low and zero-emission aviation.

Last September, for instance, a hydrogen fuel-cell plane capable of carrying passengers took to the skies over England for its first flight.

The same month also saw Airbus release details of three hydrogen-fueled concept planes, with the European aerospace giant claiming they could enter service by 2035.

Back in 2016, the Solar Impulse 2, a manned aircraft powered by the sun, managed to circumnavigate the globe without using fuel. The trip was completed in 17 separate legs.

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Retail sales post surprise gain as consumers show strength despite delta fears

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Retail sales posted a surprise gain in August despite fears that escalating Covid cases and supply chain issues would hold back consumers, the Census Bureau reported Thursday.

Sales increased 0.7% for the month against the Dow Jones estimate of a decline of 0.8%.

A separate economic report showed that weekly jobless claims increased to 332,000 for the week ended Sept. 11, according to the Labor Department. The Dow Jones estimate was for 320,000.

Economists had expected that consumers cut back their activity as the delta variant continued its tear through the U.S. Persistent supply chain bottlenecks also were expected to hold back spending as in-demand goods were hard to find.

The pandemic’s impact did show up in sales at bars and restaurants, which were flat for the month though still 31.9% ahead of where they were a year ago.

However, sales were strong for most areas during the month, when back-to-school shopping generally results in a pickup in activity, especially so this year as schools prepared to welcome back students after a year of remote learning.

The headline number would have been even better without a 3.6% monthly drop in auto-related activity; excluding the sector, sales rose 1.8%, also well above the 0.1% expected gain.

With fears rising over the pandemic, shoppers turned online, with nonstore sales jumping 5.3%. Furniture and home furnishing also saw a healthy 3.7% increase, while general merchandise sales increased 3.5%.

Electronics and appliances stores saw a 3.1% drop, while sporting goods and music stores fell 2.7%.

The numbers overall reflected a more resilient consumer, with sales up 15.1% from the same period a year ago.

The retail upside surprise was tempered slightly with a disappointing read on jobless claims.

Initial filings increased 20,000 from a week ago after posting a fresh pandemic-era low. Still, the four-week moving average, which accounts for weekly volatility, declined to 335,750, a drop of 4,250 that brought the figure to its lowest point since March 14, 2020, at the pandemic’s onset.

The claims total came under heavy seasonal adjustments, as the unadjusted figure showed a drop in filings of 23,331 to 262,619.

Continuing claims also declined, falling by 187,000 to 2.66 million, also a new low since Covid hit. The four-week moving average nudged lower to about 2.81 million.

However, those receiving compensation under all programs actually increased just ahead of the expiration of enhanced federal jobless benefits. That total, though Aug. 28 and thus before the expiration, rose by 178,937 to 12.1 million.

In a separate economic report, the Philadelphia Federal Reserve reported that its manufacturing activity index rose 11 points to 30.7, representing the percentage difference between firms reporting expanding activity against those seeing contraction. That number was well ahead of the Dow Jones estimate of 18.7.

This is breaking news. Please check back here for updates.

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StanChart chairman still sees opportunity in China as regulations tighten

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Tourists visit the Bund waterfront area on May 10, 2021 in Shanghai, China.

Wang Gang | Visual China Group | Getty Images

But overall, I think China continues to be a tremendous source of opportunity for the private sector.

Jose Vinals

Chairman of Standard Chartered

“There’ve been some articles in the media about — is China becoming uninvestable? I don’t think so,” Jose Vinals told CNBC’s Hadley Gamble on Wednesday.

A number of sectors may be “a little bit more challenged now” and investors need to look more carefully at what investments they are making, he said.

“But overall, I think China continues to be a tremendous source of opportunity for the private sector,” he said, pointing out Beijing has slowly opened up its financial sector, granting some international firms access.

The regulatory crackdown in China has been interpreted differently by big names in the financial world, including Ray Dalio, George Soros and David Roche.

Inflation expectations

Separately, Vinals said he doesn’t expect inflation to be a big problem.

“I still subscribe to the view that inflation that we’re seeing in the United States and in other Western countries in particular … has an important transitory component,” he said.

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Fed Chair Jerome Powell similarly believes that inflation will soon subside and has said he wants to see more strong employment reports before the central bank starts paring back its bond purchases.

Vinals said many Western countries are operating below their maximum economic potential, adding the Federal Reserve is likely to hike rates early next year.

“My baseline is that inflation will not be a big problem. But there is a risk that it may become more of a problem than we think,” he said, acknowledging that it would “complicate things” for the world.

“But I see [inflation] more as a downside risk to the global economic recovery, than as the base case for the economic outlook,” he said.

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