The daily business briefing: October 3, 2022

1. U.K. abandons Truss' tax cut on high earners after uproar

The British government has dropped Prime Minister Liz Truss' controversial plan to cut the country's highest income tax rate, finance minister Kwasi Kwarteng confirmed Monday. Truss proposed slashing taxes on high earners just 10 days ago, saying it would stimulate growth. But the plan sparked a growing rebellion in her ruling Conservative Party and rattled global financial markets. "We listened to people, I get it," Kwarteng told BBC News before announcing the reversal. Kwarteng said the uproar over the policy had become "a massive distraction" that was "drowning out a strong package" that includes support for energy bills and cuts to basic income and corporate tax rates. Britain's currency rose to touch a one-week high after the BBC first reported the reversal.

BBC News Reuters

2. Tesla shares drop after deliveries fall short of expectations

Tesla reported Sunday that it delivered 343,830 electric vehicles in the third quarter, up 42 percent from a year earlier but below analysts' expectations. The total was 35 percent higher than the second quarter's 254,695 cars delivered, and better than the first quarter's 310,048, which was a record. But the consensus forecast by analysts was just above 360,000. Tesla production had to bounce back after a long COVID-19 shutdown at its Shanghai plant. The company is ramping up an expansion, after opening Tesla Berlin in March and an Austin, Texas, plant in April. The Shanghai plant suspended most operations in July to make upgrades. Tesla shares fell more than 5 percent in pre-market trading on Monday.

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3. OPEC+ to consider production cut to prop up oil prices

OPEC+ delegates say the group of oil producing countries on Wednesday will discuss cutting production by more than a million barrels per day to boost prices, which have been falling due to expectations of weakening economic growth, The Wall Street Journal reported Sunday. OPEC+ is made up of the Organization of Petroleum Exporting Countries and allies led by Russia. The exporters benefited from a surge in oil prices, which stayed above $100 per barrel for months after Russia invaded Ukraine. But growing concerns of a global economic slowdown have dragged prices down at the fastest pace since the coronavirus pandemic hit in early 2020. Anything to reverse oil's decline could hurt Western nations struggling to contain the highest inflation in decades, and help Russia fund its war effort.

The Wall Street Journal

4. Dow, S&P 500 futures edge higher after tough September

U.S. stock futures were mixed early Monday ahead of a new month of trading after a rough September. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.4 percent and 0.2 percent, respectively, at 6:45 a.m. ET. Nasdaq futures were down 0.2 percent. The Dow and the S&P 500 finished September with their biggest monthly losses since March 2020, when the coronavirus crisis hit the United States. The Dow closed under 29,000 on Friday for the first time since November 2020 after dropping 8.8 percent in September. The S&P 500 and the tech-heavy Nasdaq fell 9.3 percent and 10.5 percent, respectively, last month. The market has been dragged down by investor concerns about the Federal Reserve's plan to continue aggressively hiking interest rates, even if it hurts the economy.

CNBC

5. Report: Russia smuggles stolen grain out of Ukraine

Russia has been stealing and smuggling Ukrainian grain overseas, according to an investigation by The Associated Press and Frontline. The news outlets reported that the bulk cargo ship Laodicea, owned by Syria, is part of a Russian-run smuggling operation that has used phony manifests to steal at least $530 million worth of Ukrainian grains, with the proceeds helping to finance Russian President Vladimir Putin's unprovoked invasion of Ukraine. Ukrainian diplomats asked Lebanon to impound the Laodicea when it docked in the country last summer, saying it carried 10,000 tons of stolen barley and wheat flour. Russia called the claim "false and baseless," and Lebanese officials allowed the ship to unload.

The Associated Press