Stocks jump, the temperamental peso, and other election aftermath indicators

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0:11This is The Indicator from Planet Money. I'm Waylon Wong here with Darian Woods. Howdy. Hello. And visiting us today from the Planet Money orbit, Amanda Aronchik. I have just landed here from Planet Money. I hope you come in peace. I do. I always come in peace. Amanda, you are here at a pivotal time. What are you talking about? Well, let me tell you. What happened this week? Anything? Some stuff has happened this week, Amanda. I wasn't aware. Not only are you joining us in the aftermath of the election, You're also joining us for Indicators of the Week. Yay. So you've woken up from your cryo sleep just in time, Amanda.

0:52Today on the show, we've got stocks jumping. Yes, the peso dropped down into the dumps. And we've got some more jumping, this time in the minimum wage. That's all after the break. This message comes from NPR sponsor, HP. Easily search through personal files, gain valuable insights, and make smarter, more informed business decisions. Unlock the future of work today with the HP AI PC. With the right tools, work doesn't have to feel like work. To learn more, go to hp.com slash AI PC. This message comes from LinkedIn ads. One of the hardest parts about B2B marketing is reaching the right audience.

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2:16Indicators of the week. Darian Woods, you are up first. My indicator is 2.5%. And that's how much the S &P 500 index of stocks jumped the day after the election. It is the biggest post-election day spike ever, according to Bloomberg. Two and a half doesn't sell like that much. Amanda doesn't impress me much. Yeah, whatever. Happens all the time. Better than Bush. Oh, no, wait, it doesn't. Better than Clinton. Better than Obama. Look, Donald Trump has promised lower corporate tax rates than Kamala Harris. So it makes sense that this would have boosted share prices. But, you know, some industries have done especially well, like banking.

2:55You got investors thinking that Trump would be looser on financial regulations, making banks more profitable, at least in the short run before any crisis. Right, right, right. The prospect of deregulation seems to be driving share prices in all sorts of sectors. Yeah, across the board, Trump has promised to remove 10 old regulations for every new one. Less regulation is generally good for profits if you don't have to be as careful with the environment or labor or consumer safety. That is going to be a big shift from the Biden administration that was putting up a lot of barriers. The Department of Justice, the Federal Trade Commission under Lena Kahn.

3:31I mean, they were really taking on big businesses a lot. Yeah. And now Wall Street is salivating over which companies they might be able to merge or acquire. And again, that is good for profits, whether it's through economies of scale, you know, where it's cheaper to make stuff because you're bigger, or by using market power to raise prices, as in keeping prices high because there's less competition. You know, it is interesting that the stock market has gone up so much, given all of the warnings that we heard from economists about the potential costs of huge sweeping tariffs and deportations under Trump administration.

4:07Yeah, that's right. But, you know, not every company did well. The share price of some retail companies did poorly on Wednesday, like smaller discount outlets that really depend on China for cheap goods. Companies like Dollar General and Five Below, they saw their share prices sink. You know, it's also a reminder that this share market bump was just one day and the real proof will be what actually happens over the next four years. It has been a wild week to watch what went up, what went down. It actually is a perfect segue into my indicator of the week, which is 20.8. For a brief moment, the day after the election, that was how many Mexican pesos you could buy with one U.S.

4:48dollar. And it was the weakest the peso had been against the dollar in more than two years. Of course, this is during a time when the dollar rose against a lot of currencies, around 1.65 % overall. So is a weak peso good or bad? Now, of course, that depends on who you are and whatever your relationship is to the border. So let us say you are a company that exports laptops from the U.S. to Mexico. Then this is bad for you. Those laptops will be more expensive in Mexico. You're probably going to sell less of them. But if you are importing, let's say you import raspberries from Mexico, when the Mexican peso weakens, those raspberries are cheaper for you.

5:26So you're going to be able to turn around and sell them, and you're probably going to sell more raspberries. And this isn't just an issue for a few companies. We do a lot of trade with Mexico. Yes, we do a lot of trade over the past year. Mexico beat out Canada and China, became the U.S.'s largest trading partner. Trump has said that he is considering tacking on a 25 percent tariff on all goods imported from Mexico. I mean, Trump says a lot of things. At various times, he's also said he was going to add a 100 percent tariff. Or he said something like 200 to 2 ,000 percent tariff on cars coming from Mexico.

6:02It deserves a new word. Some kind of jumbo tariff, maybe. Mega tariff? Like a terrific tariff. Super tariff. Mega tariff. Mega tariff. Mega tariff. American tariff is not bad. Anyway, there's actually no firm percentage that has been set yet, but large tariffs will mean that. Car parts, computers, electrical equipment, food, booze, all the stuff that Mexico exports to the U.S. would have a tax on them. This would be partly paid for by American consumers. Mexican goods would become more expensive in the U.S. and that is going to be bad for American consumers and very bad for Mexico. Does it seem like the value of the peso then will just continue to fall?

6:41No, no. This didn't actually last very long. It recovered quickly. But it just was like for a moment there, the peso went, and then it kind of like balanced itself out and went back to what it was before the election. So the Mexican peso had a very emotional week. Yeah, it was a long week. It was a long week. What is your indicator of the week, Waylon? My indicator is$15. That is the new minimum wage in two states, Alaska and Missouri. Voters in both states approved ballot measures to raise their minimum wages. And you might know this, but the federal minimum wage has been stuck at$7.25 since 2009.

7:19So since then, dozens of states have taken their own action. And that group of states includes Alaska and Missouri. Oh, so wait, does that mean that every minimum wage worker in those states is going to get 15 bucks an hour starting tomorrow? Not quite. So take Alaska. The current minimum wage there is$11.73 an hour. It's going to go up gradually over the next few years and get to$15 in 2027. And then in Missouri, their current minimum wage is$12.30. That will also go up in increments. They're going to get to$15 in 2026. And how many workers will this affect? For Alaska, I saw one estimate from the Economic Policy Institute that says the increase will affect about 10 percent of workers.

8:03And more than half that group is women. In Missouri, it's about 12 percent. And one estimate from a group called the Missouri Budget Project says workers will get an extra thousand bucks every year. That's not bad. That is a hopeful prediction. Yeah, I mean, who's going to turn down an extra thousand bucks a year? Certainly not me. So low-wage workers in Missouri and Alaska are probably feeling pretty good about this. And these ballot measures actually passed with quite a bit of support in both states. And California had a vote on raising its minimum wage too, right, from$16 an hour? Yes, they are voting on whether to take their minimum wage to$18 an hour by 2025.

8:41But as of this recording, that vote is still too close to call. OK, Californian minimum wage workers glued to the TV screens. They haven't left the couch since Tuesday. So that was the knife-edge election we were waiting for all along. Yeah, a single ballot measure.

9:00This episode was produced by Angel Correras with engineering by Sina Lafredo. It was fact-checked by Sierra Juarez and edited by Patty Hirsch. Kicking Cannon is our show's editor, and The Indicator is a production of NPR.

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