The daily business briefing: August 31, 2021
Ida pushes oil and gasoline prices up slightly, Zoom shares dive despite strong earnings, and more
Ida nudges oil, gasoline prices higher
Oil and gasoline futures prices edged higher Monday after Hurricane Ida slammed into Louisiana and forced the temporary shutdown of a big part of U.S. oil production and refining operations. Nearly all oil production in the Gulf of Mexico was halted. Ida quickly weakened into a tropical depression after hitting as a powerful Category 4 hurricane, causing flooding and knocking out power to more than 1 million Louisiana utility customers. Energy companies were working to determine how quickly Louisiana refineries and Gulf of Mexico oil and gas production could be restarted. Oil prices rose slightly after surging by 10 percent last week. "The reaction is mixed because we avoided the worst-case scenario," Again Capital founding partner John Kilduff said. "But supplies are tight, and that could impact prices."
Zoom shares plunge as reopenings threaten growth
Zoom shares plunged by 10 percent in after-hours trading Monday after the video communications giant reported earnings that beat analysts' expectations, but acknowledged that its growth had slowed as schools and businesses reopened. Revenue came in at $1.02 billion, compared to $990 million forecast by analysts polled by Refinitiv. The company reported earnings per share of $1.36, beating the $1.16 expected. Zoom's user growth shot up last year as the coronavirus shut offices, schools, and gathering places, forcing people to use video conferencing for work, education, and socializing. Zoom's growth prospects have dimmed as the economy reopened and companies built out their own video chat solutions.
EU recommends banning non-essential travel by unvaccinated Americans
The European Union on Monday removed the United States from its list of safe countries for non-essential travel due to rising coronavirus infections fueled by the highly contagious Delta variant. The European Council recommended reinstating travel restrictions against unvaccinated U.S. tourists, but did not call for its 27 member nations to turn away fully vaccinated travelers from the U.S. In June, ahead of the summer travel season, the trading bloc recommended lifting restrictions on U.S. travelers. The EU guidance is not binding, so member countries are expected to adopt a mix of policies that could complicate European travel plans for Americans. The new restrictions threaten to cost European businesses billions in lost revenue.
Stock futures rise as Wall Street ends month with gains
U.S. stock index futures rose slightly early Tuesday, putting the S&P 500 on track to end August at a record high, following seven straight months of gains. Futures tied to the S&P 500 and the Dow Jones Industrial Average were up by 0.2 percent several hours before the opening bell. Nasdaq futures gained 0.3 percent. The S&P 500, which rose by 0.4 percent on Monday, has risen by 3 percent in August. The Dow fell by nearly 0.2 percent on Monday, but is up 3 percent this month. The tech-heavy Nasdaq Composite surged by 0.9 percent on Monday to put it up by 4 percent in August despite concerns a coronavirus surge could disrupt the economic recovery as the Federal Reserve moves toward tapering its economy-boosting asset purchases.
Buffalo Starbucks workers push for union vote
Starbucks workers filed petitions on behalf of employees at three Buffalo-area stores on Monday asking the National Labor Relations Board to hold elections on union representation. Starbucks employees in New York City last week announced that they were creating a union called Starbucks Workers United. The move followed years of complaints about understaffing, erratic hours, and other alleged labor practices at the coffee chain. "They could fix this or that issue, but there are always new things coming up," said Brian Murray, a barista at a Starbucks in Buffalo. "The only way to have those resolved in the future is having a union, having democracy in the workplace." A Starbucks spokesman said the company provides workers with forums aimed at "establishing and maintaining a great work environment."