The daily business briefing: October 12, 2022
The Nasdaq and S&P 500 hit fresh bear-market lows, The Wall Street Journal finds federal officials traded stocks affected by their agencies' decisions, and more
Nasdaq, S&P 500 hit new bear-market lows
The Nasdaq fell 1.1 percent Tuesday, dropping into bear market territory, and the S&P 500 hit a fresh bear-market low on growing concerns that Federal Reserve interest rate hikes to fight high inflation could tip the economy into a recession. The S&P 500 fell 0.7 percent. The Dow Jones Industrial Average edged up 0.1 percent. Futures connected to the Dow were up 0.4 percent at 6:45 a.m. ET on Wednesday ahead of fresh inflation data. S&P 500 and Nasdaq futures were up 0.5 percent and 0.7 percent, respectively. Later Wednesday, the Labor Department will release the producer price index, with the new consumer price index coming on Thursday. Minutes from the Fed's September policy meeting are due out Wednesday afternoon.
WSJ: Federal officials traded stocks affected by their agencies' decisions
More than 2,600 officials at federal agencies have owned or traded stocks affected by their agencies' decisions over the past six years, The Wall Street Journal reported Tuesday. The trading took place in the executive branches of both Republican and Democratic administrations alike. The Journal reviewed financial-disclosure forms for about 12,000 senior career employees and political appointees from 2016 through 2021. The documents included data on more than 315,000 stock, bond, and fund trades by the officials or close family members. The review found that more than five dozen officials at five agencies traded stock in companies shortly before their departments hit the firms with enforcement actions, and that one in three senior Environmental Protection Agency officials had investments in companies lobbying the EPA.
Biden tells CNN 'slight recession' possible but unlikely
President Biden said Tuesday in an interview with CNN's Jake Tapper that the U.S. economy could face at worst a "slight recession" as the Federal Reserve and central banks around the world raise interest rates to cool economic growth and bring down the highest inflation in decades. "I don't think there will be a recession," Biden said. "If it is, it will be a very slight recession. That is, we'll move down slightly." Economists and banks have been predicting the economy will likely to slip into a recession within months. The latest warning came from JPMorgan Chase CEO Jamie Dimon, who said the U.S. will probably enter a recession within six to nine months. Seventy-two percent of economists polled by the National Association for Business Economics last month said they anticipate a U.S. recession by mid-2023.
Leak reported in pipeline carrying oil from Russia to Germany
The Polish operator of the Druzhba pipeline carrying crude oil from Russia to Germany said Wednesday that it had detected a leak in central Poland. The operator, PERN, said it did not know what had caused the leak. Firefighters said they were working in cornfields near the village of Zurawice to pinpoint the precise location of the problem. A firefighter spokesperson, Brig. Karol Kierzkowski, told state all-news broadcaster TVP Info that crews had pumped out about 400 cubic meters of spilled crude, and the flow through the line had been blocked. The incident came after explosions caused major leaks in the Nord Stream 1 and 2 natural gas pipelines running under the Baltic Sea from Russia to Europe.
Uber, Lyft, DoorDash shares plunge after Labor Department unveils gig-worker proposal
Shares of Uber, Lyft, and DoorDash fell Tuesday after the Labor Department unveiled a proposed rule that could make it easier for gig workers to get classified as employees instead of independent contractors. The proposed rule change would help millions of people, from home-care workers to gig drivers, qualify for benefits and protections that companies are required to provide for employees but not independent contractors. Shares of the high-profile gig-economy employers plunged as soon as proposed rule was announced. Uber shares dropped by more than 10 percent. Lyft and DoorDash fell about 12 percent and 5 percent, respectively.