The daily business briefing: August 12, 2022
South Korea's president pardons Samsung leader Jay Y. Lee, California's governor unveils a plan to deal with decreasing water supply, and more
South Korean president pardons Samsung leader
South Korean President Yoon Suk-yeol pardoned de facto Samsung head Lee Jae-yong, who was released on parole last August after serving prison time for bribing one of Yoon's predecessors. The justice ministry said Lee, also known as Jay Y. Lee, was needed to confront a "national economic crisis." The decision ends a five-year ban on Lee's participation in management of the South Korean conglomerate, and clears him to run the company. Samsung is a leader among a small group of family-owned conglomerates that have helped South Korea become an export powerhouse. One unit, Samsung Electronics, accounts for one-sixth of South Korea's exports. Lee, also known as Jay Y. Lee, was one of nearly 1,700 people pardoned ahead of South Korea's National Liberation Day holiday on Monday.
Newsom unveils plan to store more water as California gets drier
California Gov. Gavin Newsom (D) on Thursday released a plan to capture and store more water as the state faces a hotter, drier future. With California expecting an estimated 10 percent decrease in its water supply by 2040 due to rising temperatures and decreasing runoff, the plan calls for accelerating infrastructure, including recycling more wastewater and desalinating seawater and brackish groundwater, as well as conserving to contain demand by an estimated 8.4 million households. "The hots are getting a lot hotter. The dries are getting a lot drier," Newsom said. "We have to adapt to that new reality and we have to change our approach." The plan calls for expanding below-ground storage capacity by four million acre-feet to help prepare for the expected loss of up to nine million acre-feet per year.
Stock futures rise, heading for weekly gains
Stock futures rose early on Friday after a better-than-expected inflation reading, putting Wall Street on track to finish the week with gains. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.4 percent at 7 a.m. ET. Nasdaq futures were up 0.5 percent. The Dow and the S&P 500 fell 0.1 percent on Thursday, while the tech-heavy Nasdaq dropped 0.6 percent a day after surging back into bull market territory. "I think there's profit taking today," said Sanctuary Wealth chief investment officer Jeff Kilburg. "We didn't really have a pullback or didn't erase any of the gains off of CPI."
Several China state-owned companies delist from NYSE
China Life Insurance, oil giant Sinopec, and several other Chinese state-owned companies announced Friday that they would delist from the U.S. stock market, Reuters reported. The companies, which also include Aluminum Corporation of China and PetroChina, plan to keep their listings in Hong Kong and mainland China markets, but will apply to pull their American Depositary Shares from the New York Stock Exchange. China and the United States have been negotiating to end a dispute over auditing rules that could get Chinese companies booted from American exchanges, but the China Securities Regulatory Commission said these companies were compliant with U.S. rules and decided to delist due to their own business interests.
Argentina's inflation rate rises to 7.4 percent … in one month
Argentina on Thursday reported that its monthly inflation rate rose to 7.4 percent in July, the highest level in two decades. Over the past year, consumer prices have risen 71 percent in the South American nation, the INDEC national statistics agency said. Argentina has a poverty rate of 40 percent, and the crisis has increased the reliance of some of the country's 47 million residents on bartering to make ends meet, according to The Associated Press. Some analysts have warned inflation could rise over 90 percent this year, with triple-digit inflation possible if President Alberto Fernández's government fails to contain price increases.