The daily business briefing: July 15, 2022
China reports slowest economic growth in 2 years, Amazon reportedly plans to cut some private-label products due to poor sales, and more
China reports slowest economic growth in 2 years
China reported Friday that its economic growth slowed to 0.4 percent in the second quarter compared to the same period a year earlier, its worst performance in two years. Independent economists say the world's second largest economy might even have contracted. China last year led major economies in its comeback from the coronavirus pandemic, but this year its "zero covid" approach has brought new shutdowns as the United States and other countries stayed open. "It wasn't easy to maintain positive economic growth" over the spring, said Fu Linghui, spokesman for China's National Bureau of Statistics. "Looking at the next stage, the risk of stagflation in the global economy is rising." Stagflation is a mix of rising prices and slowing economic growth or high unemployment.
Report: Amazon slashing private-label offerings
Amazon is drastically cutting its private-label offerings after facing pressure from lawmakers and regulators who have accused the company of giving its own brands advantages over similar products from other vendors on its site, The Wall Street Journal reported Thursday, citing people familiar with the situation. Amazon's private-label business had 243,000 products across 45 different house brands as of 2020, but over the past six months the online retail giant's leaders have told their private-label team to slash their offerings and stop reordering some items. The scaling back resulted partly from disappointing sales, the Journal's sources said, and executives have talked about reducing Amazon-branded products by more than half.
Fed chair, former vice chair cleared in trading investigation
Federal Reserve Inspector General Mark Bialek says his investigation has determined that Fed Chair Jerome Powell and then–vice chair Richard Clarida did not violate any laws or ethics rules in financial trades they made in the spring of 2020, during the market turmoil of the early coronavirus pandemic. "We did not find evidence to substantiate the allegations that former Vice Chair Clarida or you violated laws, rules, regulations, or policies related to trading activities as investigated by our office," Bialek told Powell in a July 11 letter released Thursday. The inspector general said an investigation is continuing into trades by the presidents of two regional Federal Reserve banks who stepped down after their financial moves were revealed.
Stock futures inch up ahead of more bank earnings
U.S. stock futures edged higher early Friday ahead of more earnings reports from major banks. Futures tied to the Dow Jones Industrial Average were up 0.3 percent at 6:45 a.m. ET. S&P 500 and Nasdaq futures were up 0.2 percent. The Dow and the S&P 500 fell 0.5 percent and 0.3 percent, respectively, on Thursday, while the tech-heavy Nasdaq inched up less than 0.1 percent. The market's struggles came as JPMorgan Chase and Morgan Stanley kicked off major bank earnings with troubling reports. JPMorgan Chase shares fell 3.5 percent after the company said it suspended share buybacks and increased reserves for bad loans. Morgan Stanley reported weaker-than-expected investment banking revenue, and its shares edged 0.4 percent lower.
Crypto lender Celsius files for bankruptcy protection
Cryptocurrency loan company Celsius filed for Chapter 11 bankruptcy protection on Thursday, a month after suspending withdrawals. The company said it will continue suspending withdrawals and argued the bankruptcy filing will give it "the best opportunity to stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and emerge from Chapter 11 positioned for success in the cryptocurrency industry." Celsius said as part of the bankruptcy process it would submit a plan "that restores activity across the platform," although it didn't provide a timeline. Celsius revealed it had a $1.2 billion shortfall, which CEO Alex Mashinsky blamed on "poor" investments and other "unanticipated" losses.