Business briefing

The daily business briefing: December 29, 2022

Exxon sues EU over windfall tax, China to begin re-issuing passports, and more

1

Exxon sues EU over energy windfall tax

ExxonMobil is suing the European Union in an attempt to get the bloc to scrap its windfall tax on oil companies. Fossil-fuel companies such as Exxon have "raked in multibillion-dollar profits" in the months since Russia invaded Ukraine, disrupting the global energy market and sending household bills soaring, The New York Times explained. The EU's windfall tax, which is supposed to take effect Saturday, aims to "shield consumers from high energy prices" by applying a levy that kicks in when an oil company's profits go 20 percent above those averaged between 2018 and 2021, the Financial Times said. Exxon, which reported global profits of $20 billion for this year, argues the levy is "counterproductive." Its lawsuit is "the most significant response yet against the tax from the oil industry," the FT added.

2

China to begin re-issuing passports, prompting surge in travel demand

Chinese officials said the country will resume issuing passports and visas in another step toward winding down the country's "zero COVID" policy. The move could potentially mean a massive wave of Chinese tourists will go abroad for the first time in more than a year, especially ahead of the upcoming Chinese New Year in January, which The Associated Press noted is normally the country's biggest traveling season. Searches for New Year travel packages climbed 600 percent, Bloomberg reported. The announcement marks a rapid change in the government's handling of overseas travel, as China has largely isolated itself from the rest of the world since the pandemic began. But as COVID cases in China soar, some countries, including the United States, Italy, and Japan, have all issued decrees requiring negative COVID tests for any visitors from China. 

3

Stock futures edge higher after Wednesday dip

Stock futures rose slightly before the opening bell Thursday. Futures for the S&P 500 gained 0.4 percent. Those tied to the Dow Jones Industrial Average rose 0.2 percent, and Nasdaq futures gained 0.6 percent. Investors were awaiting Thursday's data on jobless claims. The markets fell Wednesday "as recession fears weighed on investor sentiment," CNBC said. The Dow, S&P 500, and Nasdaq are all headed for their worst year since 2008. "Investors are anticipating an economic recession to materialize early in 2023," Sam Stovall, chief investment strategist at CFRA Research, wrote in a Wednesday note.

4

Goldman Sachs expected to fire 8 percent of staff

Goldman Sachs, the world's second-largest investment bank, plans to cut up to 8 percent of its workforce, or about 4,000 jobs. The firm's chief executive David Solomon made the announcement in a year-end message to staff, Bloomberg reported. Remaining employees could see their bonuses cut by 40 percent. The "bleak" message "underscores how far the bank's fortunes have sunk," the Financial Times added: The firm saw record results in 2021. "Wall Street is in retrenchment mode," Bloomberg said. Morgan Stanley, Credit Suisse, Group AG, and Barclays Plc are also facing major cuts as a recession looms and revenue from investment banking falls. "Wall Street executives aren't sure how bad the economy will get, and are proactively pulling back on lines of business to get ready," Bloomberg said.

5

Twitter outages plague users worldwide

Twitter users across the world reported outages and glitches on the social media platform Wednesday, "one of the more significant disruptions" since Elon Musk took over the site, Bloomberg reported. At one point more than 9,000 users were reporting problems, but most of them seemed to be resolved by early Thursday morning. "The disruption, while short-lived, could stoke critics of Musk and the way he's handled the takeover and its aftermath," Bloomberg said. Musk paid $44 billion for Twitter and subsequently fired half of the site's workforce, including many of its engineers. He has since announced he will step down as CEO once he finds a suitable replacement. When users complained about the wave of glitches, Musk tweeted: "Works for me." 

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