The daily business briefing: October 17, 2022
Parisians protest France's rising living costs, The Wall Street Journal reports that Goldman Sachs is planning its biggest reorganization ever, and more
Parisians protest France's soaring living costs
Tens of thousands of people marched in Paris on Sunday to protest the rising cost of living. France has been rocked by expanding strikes at oil refineries and other businesses. The march intensified pressure on French President Emmanuel Macron, who is facing a crisis in the National Assembly, the lower house of France's Parliament. Opposition parties plan to try to bring down Macron's government this week in a fight over a budget bill, hoping for a boost from the labor disputes and public anger over gas shortages. Inflation in France has risen above 6 percent, lower than in the rest of Europe but high enough to anger French citizens, despite an inflation relief package lawmakers approved this summer.
Report: Goldman Sachs planning major reorganization
Goldman Sachs is planning the biggest reorganization in the Wall Street giant's history, The Wall Street Journal reported Sunday. The investment bank will reportedly shuffle its biggest businesses into three divisions. Goldman's flagship investment-banking and trading businesses will make up one unit. Asset and wealth management will go into another unit that also will house Marcus, the company's consumer banking arm, the Journal said, citing people familiar with the matter. The third division will include transaction banking, Goldman's financial-technology platforms, specialty lender GreenSky, and the firm's ventures with Apple Inc. and General Motors Co., the Journal reported. The newspaper's sources said the company could announce the plan within days.
U.K. finance minister to reverse prime minister's tax plans to calm markets
Britain's new finance minister, Jeremy Hunt, announced Monday that he will "reverse almost all" of his predecessor's tax proposals, sending the British pound rising. Hunt promised Sunday to restore public confidence in the tax and spending plans of Prime Minister Liz Truss' government. Truss appointed Hunt on Friday after an uproar over her proposed unfunded tax cuts resulted in the departure of Hunt's predecessor, Kwasi Kwarteng. Those policies, developed by Truss and Kwarteng, had sent the value of the British currency plummeting, and forced the Bank of England to take emergency action to protect pension funds. The crisis also drove mortgage costs higher, worsening household financial troubles, and sent Truss' approval rating sinking to single digits.
Stock futures rise to start week of major earnings reports
U.S. stock futures rose early on Monday ahead of a week that will include some major third-quarter earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 1.0 percent and 1.2 percent, respectively, at 7 a.m. ET. Nasdaq futures were up 1.4 percent. The S&P 500 fell 1.6 percent last week, its fourth negative week out of the last five. Stocks had a volatile week as investors reacted to hotter-than-expected inflation data, fueling concerns that the Federal Reserve's aggressive interest-rate hikes will tip the economy into a recession. Goldman Sachs, Netflix, Tesla, and IBM are among the companies that will report quarterly earnings this week. Before the bell, Bank of America reported better-than-expected earnings.
Hearing aid sales without prescriptions begin
Over-the-counter hearing aid sales begin Monday, after a regulatory shift designed to decrease consumer costs and encourage innovation. The Food and Drug Administration changed a rule in August to let people with mild hearing loss buy the devices without a prescription. Traditional prescription hearing aids cost on average $2,000 per ear, an expense that has been prohibitive for some patients. Only about 16 percent of the tens of millions of people with hearing loss use a hearing aid, according to the National Institute on Deafness and Other Communication Disorders. FDA Commissioner Dr. Robert Califf said in August that the change would help patients "gain access to more affordable and innovative production options," and encourage improvements in the technology.