The daily business briefing: September 15, 2022
Biden announces tentative deal to prevent freight-rail strike, Patagonia founder gives company away to fight climate change, and more
Biden says railways, freight workers reach deal to avert strike
President Biden said Thursday that a tentative railway labor deal has been hammered out to avert a freight-rail strike that threatened to disrupt commuter and passenger train service and worsen supply-chain delays. Biden said the tentative agreement would "keep our critical rail system working and avoid disruption of our economy," with rail workers getting better pay, working conditions, and health-care-cost "peace of mind," while railway companies would win by being able to "retain and recruit more workers." The agreement came after Amtrak said it was canceling long-distance passenger trains starting Thursday, ahead of a 12:01 a.m. Friday deadline for an agreement. Industry groups already have halted some grain shipments.
Patagonia founder gives company away to fight climate change
Patagonia founder Yvon Chouinard, 83, announced Wednesday that he is transferring ownership of the $3 billion outdoor-apparel company to a trust and a nonprofit organization to fight climate change and protect unspoiled land. The trust was designed to protect Patagonia's independence, values, and mission as part of an arrangement to use all of its profits to protect the environment. Chouinard and his family are giving 100 percent of the company's voting stock to the Patagonia Purpose Trust, and 100 percent of its nonvoting stock to the Holdfast Collective, a nonprofit dedicated to "fighting the environmental crisis and defending nature." "Earth is now our only shareholder," the unconventional entrepreneur wrote in a letter posted on the company's website.
Mortgage demand falls as interest rates hit 6 percent
Mortgage applications dropped 1.2 percent last week, falling to the lowest level in 22 years, according to the Mortgage Banker's Association index released Wednesday. The weakening demand came as the popular 30-year fixed-rate mortgage rose above 6 percent for the first time since 2008. Applications for home loans have fallen steadily as the Federal Reserve has raised its benchmark short-term interest rate aggressively to fight high inflation, increasing borrowing costs across the economy. The central bank is expected to raise rates sharply again later this month, possibly by more than previously expected due to hotter-than-expected August inflation reported this week. A lead driver of inflation is high housing prices.
Paramount considering moving Showtime content to Paramount+
Paramount is considering shutting down Showtime's streaming service and moving its content to Paramount+, The Wall Street Journal reported Wednesday. The shift would mark the latest in a series of consolidation moves in the increasingly competitive streaming market. Paramount+ offers content from Paramount brands including CBS, Comedy Central, and Nickelodeon, along with original content, including The Good Fight and numerous Star Trek shows. Folding in additional fare from Showtime, which currently can be bought as part of a cable package or as a stand-alone service, would be intended to make Paramount+ more competitive with larger rivals like Netflix, which has 220 million subscribers, and Disney+, which has 152 million. Paramount+ has 43 million subscribers globally.
Stock futures rise slightly ahead of economic data
U.S. stock futures edged higher early Thursday as investors awaited fresh economic data. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were up about 0.1 percent at 6:30 a.m. ET. Data on retail sales, import prices, and applications for jobless benefits are scheduled to be released at 8:30 a.m. The Philadelphia Fed manufacturing survey and the Empire State manufacturing survey will give investors more to consider this morning. The three main U.S. indexes rose on Wednesday after plummeting Tuesday in their worst day since 2020 as a hotter-than-expected inflation report fueled concerns that the Federal Reserve will raise rates even more aggressively to fight inflation, increasing the chances of a recession.