Business briefing

The daily business briefing: October 25, 2022

Rishi Sunak takes over as U.K. prime minister as country faces cost-of-living crisis, Adidas cuts ties with Ye over antisemitic remarks, and more

1

New U.K. prime minister takes over amid cost-of-living crisis

Former U.K. finance minister Rishi Sunak became Britain's new prime minister Tuesday, inheriting the task of restoring confidence in the government's handling of the U.K.'s cost-of-living crisis. Sunak, who is of Indian descent, will be the first person of color to lead a British government. He breezed to victory in the Conservative Party's leadership contest Monday after his last remaining rival, Penny Mordaunt, dropped out. Sunak, 42, will be the United Kingdom's third prime minister in seven weeks. He will have to unite a party still reeling from the scandals that forced Boris Johnson to resign just over two months ago and the bungled tax plan that undid Liz Truss' government after just six weeks.

2

Adidas cuts ties with Kanye West

Adidas announced Monday that it is ending its partnership with Ye, formerly Kanye West, over the rapper and designer's recent behavior, including remarks widely criticized as antisemitic. "Ye's recent comments and actions have been unacceptable, hateful, and dangerous, and they violate the company's values of diversity and inclusion, mutual respect, and fairness," the German sportswear and shoe company said. "Adidas will stop the Adidas Yeezy business with immediate effect." Adidas plans to halt production of Yeezy branded products and stop payments to Ye and his businesses. Gap and Kering's Balenciaga fashion label earlier cut ties with Ye after his widely criticized recent social media posts and interviews.

3

China data shows economy picked up but growth remained weak

China released data Monday showing that its economy grew by 3.9 percent in the latest quarter compared to a year earlier. The growth was better than the previous quarter's 0.4 percent figure, which came as China enforced "zero COVID" controls that shut down factories, and cracked down on irresponsible borrowing in the real estate industry. Still, the latest data was among the weakest growth China has seen in decades. The release of the data, initially scheduled for last week, was delayed during a Communist Party congress in which President Xi Jinping was awarded a third term. Chinese stocks fell as investors worried that the cementing of Xi's power could mean China is in for more policies unfriendly to private business.

4

WhatsApp service restored after global outage

WhatsApp users around the world reported problems sending and receiving messages early Tuesday. A WhatsApp spokesperson said the company was aware of the outage and was working to restore full service. Normal service appeared to be back around 5 a.m. ET, about two hours after the first problems emerged, according to Downdetector.com, which monitors outages affecting internet services. WhatsApp Web, the messaging service's internet browser version, also briefly failed to load but quickly came back online. WhatsApp, which is wildly popular in countries such as India and Brazil, is owned by Facebook's parent company, Meta, which bought the app in 2014. Facebook also had a glitch recently. Users in August reported that their feed was spammed with unwanted messages.

5

Stock futures fall ahead of big tech earnings

U.S. stock futures fell early Tuesday ahead of a flurry of big tech earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 0.4 percent and 0.3 percent, respectively, at 7 a.m. ET. Nasdaq futures were flat. Google parent company Alphabet and Microsoft report earnings on Tuesday, Facebook's Meta Platforms reports Wednesday, and Amazon and Apple go on Thursday. Amazon shares fell slightly in pre-market trading after reports the online retail giant was freezing hiring. Wall Street added to Friday's gains on Monday. The Dow and the S&P 500 rose 1.3 percent and 1.2 percent, respectively. The Dow closed at its highest level in six weeks. The tech-heavy Nasdaq rose 0.9 percent.

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