The daily business briefing: June 11, 2018
Foxconn investigates report of poor conditions at China factory, stocks hold steady ahead of North Korea summit, and more
Foxconn investigates report of harsh conditions at Chinese factory
Foxconn said Sunday that it was investigating a plant that makes Amazon devices in China after the New York-based China Labor Watch issued a report detailing allegedly harsh working conditions at the plant. The watchdog group said employees at the Hengyang Foxconn plant in Hunan province are made to work excessive hours for low wages, and that they often have inadequate training. The report also said that plant supervisors rely excessively on temporary workers in violation of Chinese law. "If found to be true, immediate actions will be taken to bring the operations into compliance with our Code of Conduct," Taiwan-based Foxconn said in a statement. Foxconn is one of the world's largest contract manufacturers, employing more than a million people.
Stocks steady despite G-7 tensions as North Korea summit looms
U.S. stock futures held steady early Monday despite trade tensions between President Trump and America's key allies at the Group of Seven meeting in Canada, and as investors shift attention to the North Korea summit and policy tightening expected this week by the Federal Reserve and the European Central Bank. Futures for the Dow Jones Industrial Average rose by 0.2 percent, while those of the S&P 500 and Nasdaq-100 were steady, up less than 0.1 percent. European stocks edged higher despite the friction at the G-7 meeting. "Though the latest headlines are definitely not positive for global trade, risk appetite is broadly firm across the board as investors are of the view it might force the ECB and the Fed to take a cautious approach," said Neil Mellor, a senior currency strategist at BNY Mellon in London.
Italian minister says new government won't leave euro
Italy's new economy minister, Giovanni Tria, told the Corriere della Sera newspaper on Sunday that the country's new populist government had no plans to leave the euro. The first choice for finance minister proposed by the anti-establishment Five Star and the anti-immigrant League was rejected by Italian President Sergio Mattarella over his Eurosceptic views, and fears over the new government's commitment to the single currency's rules have cast doubt over a possible deal on eurozone reforms ahead of a pivotal EU summit this month. In his first interview since taking office a week ago, Tria said the government's goal is to lift growth and employment through structural reform, "but we do not plan on reviving growth through deficit spending."
KKR near deal to buy Envision Healthcare
Private equity giant KKR is close to a deal to buy Envision Healthcare, The New York Times reported Sunday, citing a person briefed on the matter. The deal reportedly would value Envision, one of the nation's largest doctor-staffing companies, at $5 billion, but the acquisition of its debt would raise the deal's value to $10 billion. Envision put itself up for sale months ago as it faced mounting questions over its hospital billing practices. It lost $228 million last year, although it had $7.8 billion in revenue. A Yale study found evidence that hospitals where Envision's Emcare unit operated charged more out-of-network bills for at least one insurer.
Swiss voters reject proposal to launch Winter Olympics bid
Voters in the Swiss region of Valais on Sunday rejected a pledge of financial support for a bid to host the 2026 Winter Olympics in the town of Sion. Opponents of the proposal objected to expected high costs, and 54 percent voted against it. The mayor of Sion, Philippe Varone, said the vote marked the end of the campaign to host the games. "There is no Plan B," he said. It is the third time in five years that the public has rejected an effort by the Swiss national Olympic body to try to lure the Winter Olympics to Switzerland. Proponents had insisted that the Olympics would be affordable because athletes would be competing in existing venues with no need for expensive new construction projects.