The daily business briefing: October 11, 2022

Iranian oil workers join anti-government protests, retailers start holiday discounts early as inventory piles up, and more

Iran protest in Syria
(Image credit: Delil Souleiman/AFP via Getty Images)

1. Iranian oil workers join anti-government protests

Iran intensified its crackdown on anti-government protesters on Monday as oil workers reportedly started striking in support of the demonstrations. University students have played a key role in protests that erupted on Sept. 16, when 22-year-old Mahsa Amini died after being detained by Iran's morality police for "inappropriate attire." Dozens of workers at the Bushehr Petrochemical Project in southern Iran went on strike Monday, chanting "Do not fear, we stand together," and "Death to the dictator," according to social media posts. The demonstration at the Bushehr project and the Abadan and Kangan oil refineries marked the first time the unrest has spread to Iran's crucial oil industry. Previously, only stores and other small businesses had closed in support of the protesters.

Reuters The Wall Street Journal

2. Retailers offer discounts as inventory builds

Retailers that struggled to get enough goods during most of the coronavirus pandemic now have a glut of unsold merchandise, The Washington Post reports. U.S. retailers had a record $732 billion of inventory in July, up 21 from a year earlier, according to Census Bureau data. To lure reluctant shoppers into stores, major retailers, including Walmart and Target, are starting Black Friday sales, even with the traditional start of the crucial holiday shopping season still six weeks away. Amazon is holding a second Prime Day promotion less than three months after the last one. "There is an increasing smell of desperation in the air because retailers are saddled with a ton of excess," said Elaine Kwon, managing partner at retail consulting firm Kwontified.

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The Washington Post The Wall Street Journal

3. Fed's Brainard says more rate hikes needed

Federal Reserve Vice Chair Lael Brainard said in a Monday speech that inflation might soon ease, but that the central bank will have to keep raising interest rates to cool the economy until price increases have fallen much farther. "It will take time for the cumulative effect of tighter monetary policy to work through the economy and to bring inflation down," Brainard said. The Fed has hiked interest rates five times this year to fight the highest inflation in decades. Brainard said the interest rate hikes are necessary to get inflation back to the target rate of 2 percent even if it tips the economy into a recession, arguing that "a failure to restore price stability would mean far greater pain."

The New York Times Fox Business

4. Rivian shares drop after big recall

Rivian Automotive shares dropped about 9 percent on Monday after the electric-vehicle maker recalled about 13,000 vehicles, nearly all of its vehicles, due to a possible loose fastener that could cause drivers to lose control. Rivian just started selling its electric vehicles last year. It has delivered a total of 13,198 EVs. Wedbush Securities said in a note that the recall probably wouldn't hurt Rivian's production goals for this year, although the brand's image could take a hit. In March, Rivian cut its 2022 production goal in half, lowering it to 25,000 due to supply-chain problems. Wall Street analysts now expect the automaker to produce 23,590 vehicles in 2022.

Reuters

5. Stock futures fall after Nasdaq hits lowest point in 2 years

U.S. stock futures dropped early Tuesday after Monday's losses left the tech-heavy Nasdaq at its lowest point in two years. Futures tied to the Nasdaq and the S&P 500 were down 0.9 percent at 6:30 a.m. ET. Dow Jones Industrial Average futures were down 0.7 percent. The Nasdaq fell 1 percent on Monday as shares of computer-chip makers dropped. The S&P 500 and the Dow fell 0.8 percent and 0.3 percent, respectively. The losses came after JPMorgan CEO Jamie Dimon warned that the economy could slip into a recession within nine months as the Federal Reserve raises interest rates to reduce high inflation, with another 20 percent drop for the S&P 500 possible depending on whether the Fed can guide the economy to a soft landing.

CNBC

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