The daily business briefing: October 26, 2022
Prime Minister Rishi Sunak promises to lead U.K. through "profound economic crisis," Google's slowing sales growth drags down stock, and more
Rishi Sunak vows to lead U.K. through 'profound economic crisis'
Britain's new prime minister, Rishi Sunak, vowed Tuesday to guide the country through "a profound economic crisis," but warned it could take some "difficult decisions." Sunak said in his first speech as prime minister that he would restore confidence in the Conservative government, which has been shaken by ousted Prime Minister Boris Johnson's scandals and his successor Liz Truss' controversial tax-cut plan, which rattled markets and sent the British pound plummeting, forcing her to resign after just six weeks. Jeremy Hunt, picked by Truss earlier this month as she tried to calm markets, will stay on as finance minister. Sunak said Truss' government had made mistakes in a "noble" effort to boost economic growth, and he was elected "in part to fix them."
Google quarterly sales growth slows, again
Google reported Tuesday that its sales growth had slowed for the fifth straight quarter as economic headwinds hurt online ad sales. Some of Google's most reliable core properties, such as YouTube and Google search, showed unexpected weakness, after long making up for slower-growth units. Quarterly revenue came in at $69.1 billion, up 6.1 percent over the same period a year earlier but less than expected. Shares of Alphabet, Google's parent company, fell 6 percent in pre-market trading as investors digested the results.
Small study suggests bivalent boosters no more effective than original ones
Updated bivalent booster shots made by Moderna and Pfizer didn't raise protection against dominant Omicron coronavirus strains better than another dose of the original vaccines, according to a small, independent study. Researchers at Columbia University and the University of Michigan looked at levels of neutralizing antibodies in blood samples from 21 people who got a bivalent booster as their fourth shot, and compared them to the levels of 19 people who received four doses of the original versions of the vaccines. The levels were similar three to five weeks after the boosters. The results contrasted with a statement from Pfizer and its partner, BioNTech, three weeks ago saying "positive early data" indicated that the bivalent shots were "anticipated to provide better protection."
Stock futures fall on concerns about tech earnings
U.S. stock futures fell early Wednesday, as disappointing Alphabet and Microsoft earnings stoked concerns about the impact of an economic slowdown on Big Tech. Dow Jones Industrial Average and the S&P 500 futures were down 0.1 percent and 0.7 percent, respectively, at 6:45 a.m. ET, but futures tied to the tech-heavy Nasdaq were down 1.6 percent. Shares of Google parent company Alphabet and Microsoft were down about 6 percent in pre-market trading. Meta Platforms and Amazon fell 4.1 percent and 2 percent, respectively. "I think we have to take a big picture perspective and recognize that no one's really immune in this market, there is a slowdown in digital ad spend," Sand Hill Global Advisors' Brenda Vingiello said on CNBC's Closing Bell: Overtime.
Microsoft cloud computing growth slows, shares fall
Microsoft on Tuesday reported better-than-expected quarterly results, but said growth of its Azure cloud computing business suddenly slowed. Azure grew by 35 percent in the latest quarter, down from 40 percent in the previous quarter and 50 percent in the same period last year. The software giant also released December quarter guidance that fell short of expectations. Chief Financial Officer Amy Hood said the company could face more cost-cutting measures after laying off fewer than 1,000 workers earlier this month. "While we continue to help our customers do more with less, we will do the same internally," Hood said. Microsoft shares fell 5.8 percent in pre-market trading Wednesday.