The daily business briefing: August 31, 2022
France accuses Russia of using energy supply as "weapon of war," restaurant owners urge Newsom not to sign California fast-food wage bill, and more
France slams Russia as it pauses gas flow again
France on Tuesday accused Russia of using energy supplies as a "weapon of war" after Russian energy giant Gazprom slashed deliveries to a big French customer and temporarily shut down its main natural-gas pipeline to Germany for three days of maintenance. European nations have said Russia appears to be intentionally driving up their fuel prices in response to their support of Ukraine's resistance against Russia's invasion. Ukrainian President Volodymyr Zelensky on Monday called Russia's actions "economic terrorism." Russia denies it is using energy supplies as leverage to discourage customers from supporting Ukraine. Kremlin spokesman Dmitry Peskov claimed Tuesday that the Nord Stream 1 pipeline's latest temporary shutdown was due to technological problems caused by Western sanctions against Russia over the war.
Restaurant operators urge Newsom to veto California fast-food wage law
Restaurant franchise owners and business advocates on Tuesday launched a concerted effort to pressure California Gov. Gavin Newsom (D) to veto a bill that would raise wages for fast-food workers. The legislation calls for creating a government-run council that would set wages for fast-food workers to as high as $22 per hour starting next year. "Every resource at our disposal will be used to ensure our entire membership is asking the governor to veto this bill," said Jot Condie, president of the California Restaurant Association. Before the legislature gave the bill final approval on Monday, more than 100 union members rallied outside the state capitol chanting, "Sign the bill!" A Newsom spokesperson declined to comment on whether he will sign it.
Oil prices fall on expectations of weakening demand
Oil prices plunged nearly $6 per barrel Tuesday and another $3 early Wednesday due to concerns that fuel demand could weaken as central banks aggressively raise interest rates to fight inflation, potentially hurting economic growth. Brent crude futures dropped 5.5 percent to $99.31 a barrel on Tuesday, after falling as low as $97.55 a barrel, and dropped below $96 a barrel early Wednesday. U.S. benchmark West Texas Intermediate fell 5.5 percent, to $91.64, on Tuesday, and dropped to $88.75 early Wednesday. Tuesday's declines were the steepest in a month. Central banks in the U.S. and other Western countries have been increasing interest rates sharply to bring down high inflation. Inflation in Germany recently jumped to its highest level in nearly 50 years.
Musk, Twitter trade new allegations over acquisition deal
Tesla CEO Elon Musk and Twitter traded new allegations Tuesday over Musk's effort to back out of his $44 billion deal to buy the social media platform. In a filing with the Securities and Exchange Commission, Musk cited a whistleblower complaint from Twitter's former security chief as additional evidence to support his claim the company couldn't say how many of its user accounts were fake. Twitter said in a separate filing that Musk's attempt to scrap the deal was "invalid and wrongful," and "based solely on statements made by a third party that, as Twitter has previously stated, are riddled with inconsistencies and inaccuracies and lack important context."
Stock futures mixed after 3rd day of losses
U.S. stock futures were mixed early Wednesday after three straight trading days of losses. Futures tied to the Dow Jones Industrial Average were down 0.1 percent at 6:30 a.m. ET. S&P and Nasdaq futures were up 0.1 percent and 0.5 percent, respectively. The Dow dropped 1 percent on Tuesday. The S&P 500 and the tech-heavy Nasdaq fell 1.1 percent, continuing a selloff that started Friday after Federal Reserve Chair Jerome Powell warned that the central bank will continue aggressively raising interest rates to bring down high inflation, even if hurts economic growth. Some investors remained hopeful despite Powell's hawkish remarks that the Fed is getting close to ending its cycle of rate hikes.