The daily business briefing: August 16, 2023

1. Intel drops $5.4 billion Tower Semiconductor deal

Intel said Wednesday it is scrapping its $5.4 billion acquisition of Israeli chip manufacturer Tower Semiconductor. The two companies "mutually agreed" to end the deal after Chinese antitrust regulators failed to announce a ruling on the merger plan before a deadline the companies had set. Intel has long operated in China, and its decision to drop the Tower acquisition could add to concerns of U.S. companies deeply involved in China as tensions escalate between Washington and Beijing. The planned Intel-Tower merger was announced in February 2022 and had already withstood antitrust scrutiny in the U.S. and Europe.

The New York Times

2. US retail spending surged in July

Americans increased retail spending last month despite the Federal Reserve's aggressive interest rate hikes intended to cool the economy and reduce inflation. Spending at stores, online and in restaurants rose by a seasonally adjusted 0.7% in July compared to June, the Commerce Department reported Tuesday. That was up from a 0.3% gain in June and the fastest pace since the beginning of 2023. The gain exceeded the 0.2% increase in consumer prices last month, indicating that spending is rising faster than prices. Spending could slow after a summer splurge on travel and entertainment, experts said. Target on Wednesday reported quarterly sales that fell short of expectations. The big-box retailer cut its full-year forecast as it struggled to get customers to buy non-essential goods.

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The Wall Street Journal CNBC

3. Tesla shares fall after latest cuts in EV price wars

Tesla shares fell 2.8% on Tuesday after the electric-vehicle maker unveiled its latest price cuts in its 2023 EV price war. Shares of luxury EV startups Rivian and Lucid also fell. Tesla introduced new, shorter-range versions of its Model S and Model X vehicles late Monday with base prices reduced by $10,000. Tesla's new standard Model S is now listed at $78,490. It has a range of 320 miles on a charge. The new standard Model X is priced starting at $88,490. Its range is 269 miles per charge. Tesla's stock price has retreated as Cathie Wood and her Ark Invest firm sold nearly 120,000 shares in the last three sessions.

Investor's Business Daily

4. Stock futures flat after Tuesday losses

U.S. stock futures were little changed early Wednesday following Tuesday's losses. Futures tied to the Dow Jones Industrial Average and the S&P 500 were flat at 6:30 a.m. ET. Nasdaq futures were up 0.1%. All three of the major indexes fell more than 1% on Tuesday. Financial stocks fell on Tuesday after Fitch downgraded the credit ratings of numerous banks, adding to concerns following Moody's downgrades of 10 banks last week. More disappointing economic news from China also hurt investor sentiment. The MCSI China Index fell by as much as 1.3% on Wednesday after Beijing released disappointing economic data that fueled concerns about what Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore, described as China's "recession-like conditions."

CNBC Bloomberg

5. Vietnamese EV maker VinFast's shares skyrocket in debut

Vietnamese electric-vehicle maker VinFast's shares more than doubled Tuesday as trading opened in the startup's $23 billion backdoor listing. The stock opened at $22 after its special purpose acquisition company (SPAC) partner Black Spade Acquisition agreed to a $10 per share price that valued the company at $23 billion. The price rose still higher during the day, closing at $37.06. That valued the EV maker at $85 billion — far above the $48 billion and $46 billion market caps of Ford and General Motors, respectively — even though it hasn't posted a profit yet. VinFast has shipped nearly 3,000 vehicles to North America but sales have started slowly.

Reuters