The daily business briefing: October 28, 2021
Democrats expected to cut paid family leave from social safety net bill, Ford profits fall due to chip shortage but smash expectations, and more
Democrats expected to cut paid family leave from bill
Democrats are likely to drop paid family and medical leave from their social safety net bill, several people familiar with the matter told NBC News and The Washington Post. The party needs every member of its caucus to pass the bill, and centrist Sen. Joe Manchin (D-W.Va.) has objected to guaranteed paid leave. Many Democratic lawmakers considered this a top priority, and Sen. Kirsten Gillibrand (D-N.Y.) said she would continue to push for paid leave in the Build Back Better plan "until the bill is printed." President Biden initially proposed the bill include 12 weeks, which was then cut down to four weeks amid early negotiations. White House Press Secretary Jen Psaki said "from the beginning, we have said the president was open to compromise."
Ford, GM profits fall due to chip shortage, but beat expectations
Ford and General Motors on Wednesday reported a drop in profit of 5 percent and 25 percent, respectively, as a computer-chip shortage continued to hurt sales. Still, Ford's earnings smashed analysts' expectations, nearly doubling them thanks to strong demand and pricing. Ford reported adjusted earnings of 51 cents per share, compared to Refinitiv's average analyst estimate of 27 cents per share. Automotive revenue came in at $33.21 billion, just above the $32.54 billion expected. The automaker also raised its annual guidance for the second time in 2021, and said it would reinstate its regular dividend soon after suspending it more than a year and a half ago at the start of the coronavirus crisis. GM's earnings and revenue also exceeded expectations, with adjusted earnings of $1.52 per share compared to an average estimate of 96 cents per share.
Hertz partners with Uber on Teslas
Hertz announced Wednesday that it would partner with Uber to make 50,000 Tesla electric cars available in Uber's ride-sharing network by 2023. Just days ago, Hertz placed an initial order to buy 100,000 Teslas by the end of 2022. It also said it was investing in EV-charging infrastructure. Hertz exited Chapter 11 bankruptcy protection in June, and has adopted a postbankruptcy strategy based on the modernization of its rental car fleet and operations. "One of the biggest benefits of a restructuring like ours is it gives us a fresh perspective," Mark Fields, Hertz's interim chief executive, told The Wall Street Journal. "It allows us to take the approach of instead of saying 'why?' — 'why not?'"
France seizes British trawler in post-Brexit fishing rights dispute
France seized a British fishing trawler on Thursday in a dispute over fishing grounds access following Britain's exit from the European Union. The British boat was in France's territorial waters without a license. France also warned a second boat. The French government says the U.K. has not granted enough licenses to French fishermen to operate in British waters, and on Wednesday it threatened to retaliate unless there was progress in talks. France said it would impose extra customs checks on British goods starting Nov. 2, threatening to sting a British economy also facing labor shortages and spiking energy costs. "It's not war, but it is a fight," France's Seas Minister Annick Girardin said on RTL radio. A British official called France's reaction "disappointing and disproportionate."
Stock futures edge up after Dow, S&P 500 retreat from records
U.S. stock futures rose slightly early Thursday after the S&P 500 and the Dow Jones Industrial Average edged back from record highs on Wednesday. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by about 0.1 percent several hours before the opening bell. Nasdaq futures rose by 0.4 percent. Ford shares spiked by 9 percent after the automaker smashed expectations and raised its guidance. Twilio shares plunged by 13 percent in after-hours trading after the cloud computing platform beat earnings expectations but projected a fourth-quarter loss. Investors are awaiting more big corporate earnings reports. Apple and Amazon report after the closing bell. The Commerce Department is due to release its first estimate for third-quarter economic growth, which economists polled by Dow Jones expect to show a 2.8 percent increase.