The daily business briefing: September 30, 2022
GOP-led states sue to block Biden's student-loan forgiveness plan, soaring energy prices push Europe's inflation above 10 percent, and more
GOP-led states sue to block Biden student-loan forgiveness
Six Republican-led states filed a lawsuit Thursday seeking to block President Biden from canceling up to $20,000 in student loan debt for millions of borrowers. The suit came two days after a conservative attorney in Indiana filed a separate lawsuit asking a court to overturn the policy. Biden wants to cancel up to $10,000 in federal student loan debt for people earning less than $125,000 per year. He plans to excuse another $10,000 in debt for recipients of federal Pell Grants. The Biden administration says the president can cancel the debts under a 2003 law giving the executive branch authority to overhaul student loan programs. Conservatives argue Biden is overreaching.
Europe inflation rises at record pace as energy prices soar
Euro zone inflation jumped to a record high of 10 percent in September, up from an annual rate of 9.1 percent in August, Eurostat data showed Friday. Economists had predicted a rate of 9.7 percent. Energy prices soared by 40.8 percent year-on-year, up from August's 38.6 percent rate. Food, alcohol, and tobacco prices rose 11.8 percent, compared to 10.6 percent the previous month. Core inflation, removing volatile food and energy prices, increased by 4.8 percent compared to a year earlier, slightly more than August's 4.3 percent increase. Germany released official data Thursday showing that energy and food costs pushed its consumer prices up at a 10.9 percent annual pace in September, up from 8.8 percent in August.
Senate approves bill to avert shutdown, sending it to House
The Senate on Thursday voted 72-25 to approve legislation to prevent a federal government shutdown at midnight Friday, sending it to the House. The "no" votes all came from Republicans. The stopgap legislation will keep the government funded through mid-December. It passed after Sen. Joe Manchin (D-W.Va.) agreed to drop a provision, opposed by some progressives and many Republicans, to speed up energy-project permitting. The House will take up the legislation Friday. The bill includes $12 billion in military and economic aid for Ukraine, as well as $1 billion in heating and utility assistance for low-income families.
Stock futures rise after Thursday's losses
U.S. stock futures rose early Friday following a Thursday sell-off that left the S&P 500 at a new 2022 low. Futures tied to the S&P 500 and the Nasdaq were up 0.6 percent at 7 a.m. ET. Dow Jones Industrial Average futures were up 0.5 percent. Apple shares fell 4.9 percent on Thursday on reports of declining iPhone 14 sales. Stocks have struggled recently as the Federal Reserve's aggressive inflation-fighting interest rate hikes stoke fears of a recession. The S&P 500 ended the day down 2.1 percent on the week. "The market stinks," said Jamie Cox, managing partner of Harris Financial Group. "But that's basically what the Fed wants: tighten financial conditions, and they believe that that will help bring down inflation."
Porsche shares close flat in blockbuster debut
Porsche shares closed flat Thursday after rising 2 percent early in their first day of trading on the Frankfurt Stock Exchange, in one of Europe's largest-ever initial public offerings. The 91-year-old German maker of iconic sports cars defied the decline of European market indexes, including Germany's DAX. The IPO marked Porsche's return to public trading for the first time in a decade. Volkswagen acquired the company after Porsche made an unsuccessful attempt to buy its much larger German rival in 2008. VW priced the shares at the top of its range. The public portion of the stock sale raised about $9.6 billion for VW, and valued Porsche at $73.7 billion, just under VW's valuation of $78.2 billion.