The daily business briefing: August 15, 2022

Oil prices fall as China's economy weakens, Wells Fargo to reduce once-dominant mortgage business, and more

A Wells Fargo Bank branch
A Wells Fargo Bank branch
(Image credit: John Smith/VIEWpress)

1. Oil prices fall as China's economy weakens

Oil prices fell Monday as weak China economic data intensified concerns about lower demand from the world's largest crude importer, and Saudi Aramco said it was ready to increase oil output. International benchmark Brent crude fell 1.2 percent to $97.01 per barrel following a 1.5 percent drop on Friday. U.S. benchmark West Texas Intermediate fell $1.06, or 1.2 percent, to $91.03, after falling 2.4 percent on Friday. Government data in China showed that the country's economy unexpectedly slowed in July and refinery output dropped to its lowest since March 2020, suggesting oil demand was falling after high fuel prices forced consumers to cut back. China's central bank cut a key interest rate Monday to boost growth.

Reuters The Associated Press

2. Wells Fargo to reduce once-dominant mortgage business

Wells Fargo shares fell slightly in pre-market trading Monday after Bloomberg News reported that the bank was sharply cutting back its once-dominant mortgage business. Bloomberg, citing people with knowledge of the situation, said Wells Fargo, which once provided a third of U.S. home loans, would probably start the retreat by changing its ties to outside mortgage firms that generated about a third of its $205 billion in new home loans last year. The strategy change came as the bank continued to contend with regulators and restore its reputation after a series of scandals. In the past year, the problems included a $250 million fine for "lapses that hurt borrowers in distress," Bloomberg reported.

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Bloomberg The Street

3. Saudi Arabia's Kingdom Holding unveils bet on Russian energy firms

Saudi Arabia's Kingdom Holding said via Twitter on Sunday that it invested in Russian energy giants Gazprom, Rosneft, and Lukoil between Feb. 22 and March 22, a period straddling the launch of Russia's invasion of Ukraine. The United States and other Western nations imposed sanctions on Russian energy companies over the invasion, which started Feb. 24. Kingdom Holding, which is mostly owned by Saudi Prince Alwaleed Bin Talal, said it invested a total of a little more than $500 million in the three Russian energy firms. Saudi Arabia and Russia lead the OPEC+ alliance of oil producers.


4. Rakesh Jhunjhunwala, 'India's Warren Buffett,' dies at 62

Rakesh Jhunjhunwala, a billionaire investor often called "India's Warren Buffett," died Sunday "surrounded by his family and close aides," a relative told Reuters. He was 62. The cause of death was not immediately released. Jhunjhunwala, a chartered accountant, started trading stocks at age 25 and later created the Rare Enterprises asset management firm. He built a reputation with successful stock market bets that led Forbes to call him "an investor with a Midas touch." His latest venture was a low-cost airline, Akasa Air, that launched in India last week. He had an estimated net worth of $5.8 billion.

The Washington Post

5. Stock futures fall after China releases weak economic data

U.S. stock futures fell early Monday as weak China economic data fueled concerns about global economic growth. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.5 percent and 0.6 percent, respectively, at 6:30 a.m. ET. Nasdaq futures were down 0.4 percent. The S&P 500 gained 3.3 percent last week, capping a four-week winning streak, its longest since 2021. The Nasdaq rose 3.1 percent on the week, also its fourth straight positive week. The Dow rose 2.9 percent. The gains came after fresh government data indicated inflation pressures could be easing.


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