The daily business briefing: October 4, 2022
The Biden administration prepares more chip restrictions on Chinese firms, Kim Kardashian to pay $1.26 million crypto settlement, and more
Reports: U.S. preparing new limits on China access to advanced chips
The Biden administration is considering more export controls to restrict Chinese companies' access to high-performance semiconductors, Reuters and The New York Times reported Monday, citing three people briefed on the matter. The Times said the administration could announce the measures as soon as this week. In recent weeks, the Biden administration has placed restrictions on exporting U.S. chips used for artificial intelligence applications, as well as equipment used to make them. The new rules would target high-end memory-chip manufacturing capabilities and advanced quantum computing, the latest moves "aimed at hobbling Beijing's ambitions to craft next-generation weapons and automate large-scale surveillance systems," according to the Times.
Kim Kardashian to pay $1.26 million to settle crypto charges
The Securities and Exchange Commission announced Monday that reality TV star Kim Kardashian would pay $1.26 million to settle charges that she recommended her 330 million Instagram followers buy a crypto security without revealing she was paid to pitch it. The penalty includes a $1 million fine and the forfeiture of $250,000, plus interest, that Kardashian was paid to make the post about Ethereum Max tokens. Kardashian is the latest celebrity penalized for failing to abide by regulations requiring full disclosure from people promoting financial products. As part of the settlement, Kardashian is barred from promoting financial products for three years. Actor Steven Seagal agreed to a similar ban and a $300,000 payment as part of an SEC settlement in 2020.
Trump sues CNN for defamation
Former President Donald Trump on Monday filed a defamation lawsuit against CNN, accusing the network of conducting a "campaign of libel and slander" against him and seeking $475 million in damages. The lawsuit, filed in federal court in Fort Lauderdale, Florida, focuses largely on CNN's use of the term "The Big Lie" to refer to Trump's false claims that the 2020 election was stolen from him through widespread fraud benefiting President Biden. Trump claims CNN used the phrase, which has Nazi connotations, to "aggravate, scare, and trigger people." He alleges that the network has tried to "tilt the political balance to the left," and to "taint" Trump with "a series of ever-more scandalous, false, and defamatory labels of 'racist,' 'Russian lackey,' 'insurrectionist,' and ultimately 'Hitler.'" CNN did not immediately comment.
Futures rise after Monday's relief rally
Stock futures jumped early Tuesday after the Dow Jones Industrial Average kicked off October trading with a gain of 768 points, or 2.7 percent, on Monday. Futures tied to the Dow were up were up 1.6 percent at 6:45 a.m. ET. Futures tied to the S&P 500 and the Nasdaq were up 1.9 percent and 2.3 percent, respectively. Monday's rally followed big losses in September, the worst month since March 2020 for the Dow and the S&P 500. Stocks have struggled in recent weeks due to concerns that the Federal Reserve's aggressive interest rate hikes, designed to fight high inflation, could tip the economy into a recession. "There was a relief rally," said Jon Maier, chief investment officer at Global X ETFs. "I don't think one day of relief changes the story."
Credit Suisse shares rattled by concerns over turnaround prospects
Credit Suisse shares dropped by as much as 11.5 percent on Monday before recovering some of the losses. Rumors among traders that the firm might not have enough cash to deal with a crisis sent Credit Suisse's credit default swaps — a key measure of a company's perceived financial health — surging to a record high. Credit Suisse said in a talking point given to executives that "speculating that we have a liquidity issue simply would be completely false." Some analysts said the turmoil stemmed partly from investor concerns that the bank might not be able to pull off its turnaround strategy, which it is scheduled to reveal on Oct. 27.