Business briefing

The daily business briefing: September 3, 2021

Renaissance hedge fund leaders to pay billions in back taxes, GM halts most North America production due to chip shortage, and more

1

Renaissance hedge fund executives to pay billions in back taxes

A group of current and former executives at pioneering hedge fund Renaissance Technologies have agreed to pay up to $7 billion in back taxes, interest, and penalties, the company told investors Thursday. The tax settlement, possibly the largest in U.S. history, ends a long dispute with the Internal Revenue Service over how Renaissance's key Medallion fund booked short-term gains for tax purposes. Among those paying the IRS are Renaissance founder and quantitative-investing pioneer James Simons, a mathematician who used algorithms to exploit lucrative short-term patterns in financial markets, and former co-CEO Robert Mercer. Simons, 83, is a longtime Democratic donor. Mercer, 75, was former President Donald Trump's largest financial backer in 2016, and helped found Cambridge Analytica, the consulting firm embroiled in scandal for harvesting Facebook data to aid Trump's campaign.

2

GM to halt production at most North American plants due to chip shortage

General Motors announced Thursday that it would halt production at most of its North American plants due to a global shortage of semiconductor chips caused by the coronavirus pandemic. The automaker said the only factories that would continue production after Monday would be an Arlington, Texas, plant that makes its highly profitable full-size SUVs, a Flint, Michigan, facility that assembles its heavy-duty pickups, the Bowling Green, Kentucky, facility that makes its Corvette, and part of its Lansing Grand River Assembly in Michigan. All other plants in the region will be idled. Ford said it would stop making pickups at a Kansas City plant for the next two weeks, and cut shifts at two other factories.

3

Millions to lose extra jobless aid as Delta variant threatens recovery

Millions of jobless Americans will lose extra pandemic-era jobless benefits on Monday, just as the Delta variant of the coronavirus threatens to hamper the economic recovery. Oxford Economics estimates that 8.9 million people will lose benefits from two jobless-aid programs — one for self-employed and gig workers, the other for people unemployed for more than six months. Another 2.1 million will lose a $300-a-week federal supplemental unemployment payment, although they can continue to receive state unemployment benefits. The programs are ending as hiring increases and layoffs ease. New applications for unemployment benefits fell by 14,000 last week to 340,000, the lowest level since the pandemic hit in March 2020.

4

Stock futures edge higher ahead of August jobs report

U.S. stock index futures rose slightly early Friday ahead of the August jobs report. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.2 percent. Futures for the tech-heavy Nasdaq gained about 0.1 percent. All three of the three main U.S. averages gained Thursday with a boost from better-than-expected jobless claims data. The S&P 500 and the Nasdaq closed at record highs, rising 0.3 percent and 0.1 percent, respectively. The Dow closed up by 0.4 percent. Economists polled by Dow Jones expect the August nonfarm payrolls report to show a gain of 720,000 jobs in August, down from 943,000 in July. The unemployment rate is expected to fall from 5.4 percent to 5.2 percent.

5

EPA report warns people of color face disproportionate harm from climate change

People of color will face disproportionate harm from climate change, including disproportionate deaths from extreme heat and property loss from flooding, the Environmental Protection Agency said Thursday in a new analysis. Joe Goffman, acting head of the EPA Office of Air and Radiation, said the comprehensive review was the "first of its kind." The report looked at the possible impacts of a global temperature rise of 2 degrees Celsius (3.6 degrees Fahrenheit) compared to preindustrial levels. American Indians and Alaska Natives are 48 percent more likely than other groups to live in areas that would face flooding from sea level rise. Latinos are 43 percent more likely to live in areas where intense heat would reduce work hours. Black people would have elevated death rates.

Recommended

Stock market rallies after rough start Monday
Wall Street
afternoon delight

Stock market rallies after rough start Monday

America the brittle
A FEMA worker.
Picture of Joel MathisJoel Mathis

America the brittle

Peloton again responds to TV character's exercise bike-related heart attack
Peloton
it is happening again

Peloton again responds to TV character's exercise bike-related heart attack

The daily business briefing: January 24, 2022
Kyiv, Ukraine, pictured on Jan. 23, 2022
Business briefing

The daily business briefing: January 24, 2022

Most Popular

Anti-mandate protest reportedly set for D.C. on Sunday
'Stop the Mandate' Vaccination protest sign.
mandates shmandates

Anti-mandate protest reportedly set for D.C. on Sunday

Florida advances ban on making white people feel 'discomfort' over past racism
Ron DeSantis
Fragility

Florida advances ban on making white people feel 'discomfort' over past racism

California deputy DA opposed to vaccine mandates dies of COVID-19
Kelly Ernby.
covid-19

California deputy DA opposed to vaccine mandates dies of COVID-19