The daily business briefing: March 8, 2023

1. Adidas projects 1st annual loss in decades due to unsold Yeezy shoes

Adidas on Wednesday reported a fourth-quarter operating loss of $763 million and said it would cut its dividend as it struggles to figure out what to do with $1.3 billion worth of unsold Yeezy gear it was stuck with when it cut ties with rapper and fashion designer Kanye West, who now goes by Ye, over his antisemitic statements. The German sportswear giant projected a full-year operating loss of more than $730 million for 2023, its first annual loss in 31 years. New Adidas CEO Bjørn Gulden, who took over this year, said 2023 would be a "transition year" as Adidas reduces inventories and cuts discounts to restore profitability and "put our focus back on our core: product, consumers, retail partners, and athletes."

Bloomberg CNBC

2. Fed chair tells senators interest rates could rise higher than anticipated

Federal Reserve Chair Jerome Powell said in a Senate hearing Tuesday that the central bank would probably have to raise interest rates higher than previously expected to bring down inflation because the economy has remained strong despite a string of aggressive hikes. "The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated," Powell told the Senate Banking Committee. The Fed last month raised its benchmark federal funds rate a quarter percent, marking a slowdown after a string of bigger increases. Powell testifies to House lawmakers on Wednesday.

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The Wall Street Journal

3. French unions extend strikes against pension reform

France's nationwide strike against the government's pension reform plan continued Wednesday with rolling strikes unions said could last for days. Tuesday's nationwide strike, the sixth in two months, halted trains and forced most Paris schools to close. Workers blockaded oil refineries, disrupting fuel deliveries in what organizers said was a push to bring France to a standstill. The interior ministry said about 1.3 million people participated in street demonstrations across France, making the protest the biggest yet this year. Hardline unions said the TotalEnergies oil refineries would be among the places targeted in the rolling strikes. French President Emmanuel Macron is pushing lawmakers to adopt his proposal to raise the pension age to 64 from 62 by April.

Reuters

4. U.S. to relax COVID testing mandate for China travelers

The Biden administration plans to relax COVID-19 testing requirements for travelers from China as soon as Friday, The Associated Press reported Tuesday, citing two people familiar with the decision. The move comes as COVID hospitalizations and deaths are falling in China and the United States. When the restrictions were imposed on Dec. 28 and enforced starting Jan. 5, China was fighting a surge of infections after Beijing abruptly lifted its "zero-COVID" policy. At the time, U.S. officials said China didn't appear to be giving the world a truthful account of its infections and deaths from the coronavirus, so the travel restrictions were necessary to protect Americans.

The Associated Press

5. Wall Street struggles to rebound after Fed-fueled selloff

U.S. stock futures edged higher early Wednesday as Wall Street struggled to bounce back from a selloff triggered by Federal Reserve Chairman Jerome Powell's warning to senators that the central bank might have to raise interest rates higher and longer than previously anticipated to bring down inflation. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.1 percent at 6:45 a.m. ET. Nasdaq futures were up 0.2 percent. The Dow and the S&P 500 plunged 1.7 percent and 1.5 percent, respectively, on Tuesday after Powell told the Senate Banking Committee that strong economic data suggested more rate hikes could be necessary to cool the economy enough to tame inflation. The tech-heavy Nasdaq fell 1.3 percent.

CNBC