The daily business briefing: December 30, 2022
Mortgage rates recorded their largest calendar-year increase ever, Amazon stock tumbled by half this year, and more
Mortgage rates recorded their largest calendar-year increase ever
Mortgage rates logged their largest-ever increase in a calendar year in 2022, rising once again in the last week of the year to 6.42 percent from 6.27 last week. The average rate was 3.11 percent at the same time last year. Soaring rates on standard 30-year fixed mortgages "brought 2021's pandemic-fueled housing boom to a halt," writes The Wall Street Journal, and came as the Federal Reserve sought to reign in spiking inflation. The record year of climbing rates included a brief period when rates topped 7 percent for the first time in two decades.
Amazon stock tumbled by half in 2022
Amazon stock plummeted by 51 percent in 2022, the worst year for the e-commerce giant since 2000, when it tumbled 80 percent. "It was a brutal year for mega-cap tech stocks across the board," writes CNBC, noting Tesla is down 68 percent and Meta is down 66 percent. Amazon's market cap shrunk to $834 billion from $1.7 trillion at the start of the year, which was surprising compared to other highly-valued tech companies because at the height of pandemic lockdowns, investors predicted the boosted sales would sustain even after the economy reopened. Amazon CEO Andy Jassy admitted the company hired too many workers and overbuilt its warehouse network as it raced to keep up with pandemic-era demand, writes CNBC.
Southwest says it will restore flight schedule Friday
After a disastrous week of cancelations, Southwest Airlines said it expected to resume its normal flight schedule on Friday "with minimal disruptions." Every airline was affected by winter storms across the U.S. last week, but Southwest was particularly hard-hit due to its specific operational organization. More than 2,500 Southwest flights were canceled on Tuesday alone, making up 87 percent of all domestic cancelations that day. "We know even our deepest apologies — to our customers, to our employees, and to all affected through this disruption — only go so far," the company said Thursday. It expects only 39 canceled flights on Friday.
China's Huawei says it's back to 'business as usual'
Huawei Technologies, the Chinese tech giant, said on Friday that it is "back to business as usual" after a significant sales decline due to U.S. sanctions. The company said its 2022 revenue remained flat, increasing just 0.02 percent, which chairman Eric Xu described as a positive sign for the telecom giant after the Trump administration imposed a trade ban in 2019, citing national security concerns. "U.S. restrictions are now our new normal, and we're back to business as usual," Xu said. The sanctions barred the company from using Android for its new smartphones, a major blow to device sales for the second-largest maker of smartphones in the world. Xu on Friday pointed to growth in Huawei's other divisions, such as its investments in the electric vehicle sector.
Justice Department files suit against major drug distributor
The Justice Department filed a lawsuit on Thursday alleging that AmerisourceBergen Corp. failed to report "at least hundreds of thousands" suspicious opioid orders to the Drug Enforcement Agency. The pharmaceutical distributor, one of the largest in the U.S., is required to flag any orders deemed suspicious. The suit alleges the company was aware drugs sent to two pharmacies "were likely being sold in parking lots for cash," among other "red flags" it should have identified. "For years AmerisourceBergen prioritized profits over its legal obligations and over Americans' well-being," said Associate Attorney General Vanita Gupta. The company says it "conducted extensive due diligence into these customers" and reported all suspicious orders. If found liable, AmerisourceBergen could face penalties "potentially totaling billions of dollars," Gupta said.