The daily business briefing: September 6, 2022
CVS reaches $8 billion deal to acquire Signify Health, Newsom signs California law on improving fast-food worker conditions, and more
CVS Health to buy Signify Health
Drugstore giant CVS Health announced Monday that it would buy in-home health care company Signify Health in a deal worth about $8 billion. CVS beat out Amazon in securing the deal, marking a step forward in CVS's push into health care services as it seeks ways to remain connected to customers increasingly shopping online. Signify offers a network of 10,000 doctors the analytics and technology to provide in-home health care to 2.5 million U.S. patients. "Signify Health will play a critical role in advancing our health care services strategy and gives us a platform to accelerate our growth in value-based care," said CVS Health chief executive Karen Lynch.
Newsom signs California law on improving fast-food worker conditions
California Gov. Gavin Newsom (D) on Monday signed a bill creating a 10-member Fast Food Council with the power to set minimum wages and standards for working conditions in the state. The new law will provide more powers and protections for more than a half-million fast food workers. Newsom said he was proud to sign the measure, which other states are expected to follow, on Labor Day. "California is committed to ensuring that the men and women who have helped build our world-class economy are able to share in the state's prosperity," he said. Restaurant owners and franchisers opposed the bill, citing an analysis they commissioned saying it would increase prices for consumers.
OPEC+ agrees to slight oil production cut
OPEC+, an alliance of the Organization of Petroleum Exporting Countries and other oil producers led by Russia, announced Monday that it has agreed to trim output by 100,000 barrels per day in September in response to a drop in crude-oil prices. The minor cut is the first since early in the coronavirus crisis. It comes amid expectations that increasing economic trouble will reduce global demand and drive down prices. International benchmark Brent crude futures gained 3.6 percent on Monday, but fell slightly early Tuesday. Global oil prices have dropped more than 20 percent since early June. U.S. oil prices fell 7 percent last week. U.S. gasoline prices have dropped from just over $5 per gallon in mid-June to $3.79 per gallon on Monday.
Europe hit by gas-price surge as Russia shuts off Nord Stream 1 pipeline
European leaders scrambled to prevent an energy disaster on Monday as natural gas prices shot up by 35 percent following Russia's decision to indefinitely shut down its main gas pipeline to German, Nord Stream 1. Stocks fell and the euro dropped to its lowest level in two decades as leaders across the continent looked for ways to reduce demand ahead of winter. Germany appears unlikely to meet its goal of filling 95 percent of its natural gas storage capacity by the beginning of November, Bloomberg reported. Russia's state energy provider Gazprom said Friday it was shutting down the pipeline to repair an oil leak. European leaders have accused Moscow of squeezing gas supplies in retaliation for sanctions imposed over Russia's invasion of Ukraine.
Stock futures rise ahead of holiday-shortened trading week
U.S. stock futures rose early Tuesday following Wall Street's third straight week of losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.6 percent at 6:30 a.m. ET. Nasdaq futures were up 0.7 percent. All three of the main U.S. indexes fell by more than 1 percent on Friday to close out a losing week. In a week shortened by Monday's Labor Day holiday, investors will be watching speeches from Federal Reserve regional presidents for indications of the central bank's time frame for easing back on aggressive interest rate hikes it is using to fight inflation. "There's still a lot of pessimism here that we could continue to see inflation rear its ugly head and that should warrant more aggressive rate hikes by the Fed," said Ed Moya, senior market analyst at Oanda.