The daily business briefing: July 22, 2021
Drug distributors, J&J agree to $26 billion opioid settlement, economists predict recovery to withstand Delta variant surge, and more
Opioid distributors, J&J agree to $26 billion settlement
Three major drug distributors — Cardinal Health, AmerisourceBergen, and McKesson — and pharmaceutical giant Johnson & Johnson on Wednesday reached a $26 billion settlement with states, counties, and cities over the firms' role in the opioid epidemic, a bipartisan group of state attorneys general announced. The deal came after two years of negotiations stemming from allegations that the distributors ignored evidence that painkillers were being diverted to the black market, fueling addictions and deadly overdoses. Every state and municipality next will have the opportunity to approve the agreement. If enough support it, the companies could start releasing the money to help affected communities cover epidemic costs, including addiction treatment and prevention services.
Economists predict recovery to withstand Delta variant surge
The highly contagious Delta variant of the coronavirus is unlikely to trigger an economic downturn in the United States, according to economists cited in a Wednesday report by The Wall Street Journal. Many economists are forecasting robust growth in the second half of 2021 with strong hiring and heavy consumer spending, despite surging Delta variant infections. "The variant is a significant downside risk for the economy, but that risk is more than offset by what are still very strong fundamentals," said Oren Klachkin, lead U.S. economist at Oxford Economics. "Consumers have a lot of cash and seem eager to spend on activities they couldn't do for 18 months. And, for now, it seems like the vaccines should be able to keep the spike in cases fairly low."
Stock futures inch up after 2 days of gains erase Monday's losses
U.S. stock index futures edged higher early Thursday, continuing Wall Street's rebound from Monday's plunge. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq were up by about 0.2 percent several hours before the opening bell. The Dow rose by 0.8 percent on Wednesday, with a lift from better-than-expected earnings reports from Dow components Coca-Cola and Johnson & Johnson. Along with Tuesday's gain of nearly 550 points, or 1.6 percent, the gains wiped out Monday's loss of 725 points or 2.1 percent, the 30-stock index's worst day in eight months. The volatility reflected concerns that the rapid spread of highly infectious coronavirus variants could disrupt the economic recovery.
Uber, Lyft drivers strike for better pay, working conditions
Some Uber and Lyft drivers on Wednesday joined a 24-hour strike called by a California-based lobbying group to demand better pay and working conditions. The organizers asked riders and drivers nationwide to join the boycott, which it said was the first since California voters overwhelmingly passed Proposition 22, which enshrined into law many gig workers' status as contract workers rather than employees entitled to benefits and protections. "App-based workers are fed up with exploitation from big tech companies," Eve Aruguete, a Rideshare Drivers United organizer and driver, said in a statement. "Misclassification is like concrete, keeping us underground." It was not immediately clear how many drivers participated in the strike.
Ethereum price rises after Musk cryptocurrency comments
Ethereum's price rose Wednesday after Tesla and SpaceX CEO Elon Musk revealed that he owned the cryptocurrency. Ethereum, which was already having a good day, gained as much as 12 percent. Musk also repeated his support for cryptocurrency in general, although he renewed his concerns that the so-called mining of bitcoin used "energy that's a bit too much and not necessarily good for the environment." Musk also said his electric-car company, Tesla, would probably start accepting bitcoin again for purchases, telling participants at the B-Word conference, which is hosted by the Crypto Council for Innovation, that the change would come as soon as he could "do a little more due diligence to confirm that the percentage of renewable energy usage" for bitcoin mining was "at or above 50 percent."