The daily business briefing: March 31, 2022
Biden is expected to release oil to fight high pump prices, Meta reportedly paid consultants to turn people against TikTok, and more
Biden to order massive oil-reserve release
President Biden is preparing to announce the release of up to 1 million barrels of oil per day from the nation's Strategic Petroleum Reserve for up to 180 days to help bring down high gasoline prices. The order could come as soon as Thursday when Biden addresses his plans to fight high pump prices, The Washington Post reported. Oil and gasoline prices have jumped since Russia invaded Ukraine in late February, and the United States and its allies hit Moscow with harsh sanctions. Crude oil traded at nearly $105 per barrel on Wednesday, up from $60 a year ago, but fell 4 percent after the plan was reported. The average U.S. price of a gallon of regular gasoline was $4.24 on Wednesday, according to AAA, up from $3.60 last month and $2.90 last year.
Meta reportedly paying consultants to turn public against TikTok
Meta, the parent company of Facebook, is paying one of the "biggest Republican consulting firms" in the U.S. to try and "turn the public against" online video app TikTok, The Washington Post reported Wednesday. The firm Targeted Victory has been working to "undermine" TikTok by implementing a national media and lobbying campaign that places "op-eds and letters to the editor in major regional news outlets, promoting dubious stories about alleged TikTok trends that actually originated on Facebook," according to the Post. The firm has also been pushing political reporters and local politicians to move against TikTok, Facebook's biggest competitor. Operatives were "encouraged to use TikTok's prominence as a way to deflect from Meta's own privacy and antitrust concerns," the Post reported.
Germany launches emergency measures in case Russia cuts energy supplies
Germany activated a national gas emergency plan on Wednesday to start preparing for possible shortages due to the possibility that Moscow could halt deliveries unless the country pays for Russian natural gas in rubles. Under the "early warning stage," Germany is warning of possible rationing and setting up a crisis team with federal and state officials, as well as regulators and corporate executives, said Robert Habeck, the economy minister and vice chancellor. The emergency efforts highlight the risk European countries face due to their reliance on Russian oil and gas as Russia's invasion of Ukraine escalates tensions between Moscow and the West. Group of 7 energy ministers on Monday rejected Russia's demand for payment in rubles, although Moscow said a workaround would let Germany and other European countries continue paying in euros for now.
Stock futures little changed after snapping 4-day winning streak
U.S. stock futures edged higher early Thursday ahead of the last trading day of the first quarter. Futures tied to the Dow Jones Industrial Average were up by less than 0.1 percent at 6:30 a.m. ET. S&P 500 and Nasdaq futures were up 0.1 percent and 0.4 percent, respectively. The three main U.S. indexes fell on Wednesday as Russia's invasion of Ukraine and high oil prices continued to put pressure on equities. The Dow and the S&P 500 fell 0.2 percent and 0.6 percent, respectively, snapping four-day winning streaks. The tech-heavy Nasdaq dropped 1.2 percent. "We're going to be bouncing around between good news and bad news, unfortunately," said George Mateyo, Key Private Bank chief investment officer. "That's going to create some volatility."
China's manufacturing, service sectors contract
China manufacturing data released Thursday suggested that lockdowns in areas affected by the country's latest coronavirus outbreaks had put a dent in factory activity. China's official purchasing managers index for the manufacturing sector fell to 49.5 in March from 50.2 in February, according to the National Statistics Bureau. The result was in line with the expectations of economists polled by The Wall Street Journal. The service sector took a similar hit as people avoided malls and restaurants. China's jump in COVID-19 cases due to the highly transmissible Omicron variant has prompted restrictions in industrial districts, including Changchun in northeastern China and the southern technology hub of Shenzhen, as well as lockdowns in Shanghai, China's most populous city.