The daily business briefing: July 13, 2022
Twitter sues Elon Musk over effort to drop acquisition deal, Google parent Alphabet plans to slow hiring, and more
Twitter sues Elon Musk to force completion of purchase
Twitter on Tuesday filed a lawsuit seeking to force Tesla CEO Elon Musk to go through with his $44 billion deal to buy the social media company. The suit came in response to Musk's effort to back out of the agreement because he isn't satisfied with the information Twitter has provided to show what percentage of its accounts are fake. "Having mounted a public spectacle to put Twitter in play, and having proposed and then signed a seller-friendly merger agreement, Musk apparently believes that he — unlike every other party subject to Delaware contract law — is free to change his mind, trash the company, disrupt its operations, destroy stockholder value, and walk away," the company wrote in the legal complaint.
Google CEO says internet giant to slow hiring through 2023
Google parent Alphabet plans to slow hiring and investments through next year, the company's CEO, Sundar Pichai, told employees in a Tuesday email viewed by CNBC. "Like all companies, we're not immune to economic headwinds," Pichai wrote in the memo. "We need to be more entrepreneurial working with greater urgency, sharper focus, and more hunger than we've shown on sunnier days." Alphabet shares have fallen 21 percent in 2022 as rising borrowing costs dragged down technology and other companies focused on growth. Alphabet's growth slowed to 23 percent in the first quarter, down from 34 percent in the same period last year as the company reopened following broad coronavirus pandemic closures. A Google spokesperson declined to comment.
U.S., allies work to cap Russian oil price
The United States and its allies are working on capping the price of Russian oil to deprive Moscow of revenue it needs to finance its invasion of Ukraine, The Associated Press reported Tuesday. The allies have imposed waves of sanctions to damage Russia's economy, but Moscow's main revenue-maker, oil, is helping the country withstand the bans. European allies are following the U.S. in a move to stop using Russian oil by the end of this year, which could reduce the supply of oil and push prices as high as $200 per barrel. The U.S. and other powerful nations plan to establish a buyer's cartel to control the price and limit it.
IEA: Oil crisis showing signs of easing
The oil supply crisis is starting to ease as slowing economic growth decreases demand, and sanctions against Russia over its war in Ukraine dent production less than anticipated, the Paris-based International Energy Agency said Wednesday. The IEA reduced its demand forecast for the rest of 2022 and for 2023. The news came after historically high crude prices hurt economic growth and burdened consumers, fueling inflation. At the same time, U.S. and Canadian producers led an increase in global output. These factors contributed to a decline in oil prices. International benchmark Brent crude fell 7.1 percent on Tuesday to $99.49 per barrel, a low point since Russia invaded Ukraine in February. The price increased early Wednesday by 1.1 percent to $100.54 a barrel.
Stock futures rise slightly ahead of June inflation data
U.S. stock futures edged higher early Wednesday ahead of key inflation data. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up by 0.2 percent at 6:30 a.m. ET. Nasdaq futures were up 0.3 percent. The latest consumer price index is expected to show a new high of an 8.8 percent increase in June, compared to a year earlier, according to economists surveyed by Dow Jones. The May figure of 8.6 percent was the biggest increase since 1981. A high reading is expected to boost expectations that the Federal Reserve will raise interest rates another 75 basis points at its meeting later this month to curb high inflation.