The daily business briefing: July 10, 2018

1. U.K. Foreign Secretary Boris Johnson quits over 'soft' Brexit plan

British Foreign Secretary Boris Johnson resigned on Monday in protest of Prime Minister Theresa May's approach to leading the U.K. out of the European Union. Johnson's departure came within 24 hours of the resignation of May's Brexit secretary, David Davis, who said May was tying Britain more closely to the EU than hardline conservatives want. "We are truly headed for the status of colony," Johnson said in his resignation letter. Britons voted two years ago to leave the trading bloc, but the negotiations on the terms of the change have proven more complicated than anticipated. Last week, May appeared to have brought her divided ministers in line behind her plan to keep the U.K. closely linked with the EU, but the resignations have thrown her government into disarray.

The New York Times

2. Trump's pick expected to make Supreme Court more business-friendly

President Trump's selection of Brett Kavanaugh, a conservative appeals court judge, to replace retiring Supreme Court Justice Anthony Kennedy could create the most business-friendly Supreme Court in decades, analysts said. The high court already has issued a string of pro-business rulings in recent years, and Kavanaugh has criticized the expansion of federal agencies' power to issue new regulations, a common target of complaints by business leaders. Kavanaugh also has questioned the constitutionality of the Consumer Financial Protection Bureau, a watchdog created under former President Barack Obama over Republicans' objections. If the Senate confirms Kavanaugh, "then it is possible the entire CFPB could be eliminated," said analyst Brian Gardner of Keefe Bruyette & Woods.

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MarketWatch

3. Global stocks rise on expectations of strong U.S. earnings

U.S. stock futures edged higher early Tuesday, pointing to a stronger open following Monday's big gains as expectations of strong U.S. corporate earnings lifted world shares. The Dow Jones Industrial Average jumped by 1.3 percent on Monday, while the S&P 500 and Nasdaq Composite rose by 0.9 percent, led by banking stocks ahead of earnings reports by JPMorgan Chase, Wells Fargo, and Citigroup on Friday. "We're on the eve of what's going to be a dynamite earnings season" for the S&P 500, said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama. Global shares also got support from broadening expectations that economic growth can hold up despite rising trade tensions.

Reuters

4. Tesla hikes prices in China in first automaker response to trade tensions

Tesla has raised prices on its Model X and S cars in China by about 20 percent in response to the U.S.-China trade war. The U.S. electric car maker was the first company to make such a move in China, the world's largest automotive market, since President Trump hit China with tariffs on $34 billion worth of Chinese goods, and Beijing retaliated with similar levies. Analysts said Tesla's move was the first in what could be a series of signs of the direct impact of the trade tensions in automotive showrooms, with other companies likely to follow suit. "It's only chapter one of this story," said James Chao, a Shanghai-based analyst at consultancy IHS Markit. China is crucial to Tesla's effort to turn a profit, as it accounted for 17 percent of company revenue last year.

Reuters

5. Starbucks to phase out plastic straws by 2020

Starbucks announced Monday that it would phase out plastic straws and replace them with lids resembling sippy-cups by 2020 in an effort to reduce waste and protect the environment. The move comes after Starbucks' birthplace of Seattle officially banned plastic straws, and the company says this will save more than 1 billion straws from landfills. Starbucks first unveiled the new lids in 2016, using them on foam-topped drinks in just one Seattle store. By 2020, every iced drink except Frappuccinos will be served strawless, while Frappucinos will come with either paper or composted plastic straws made from plant material. Also, any customer will be able to request a sustainable straw for any drink. Starbucks is currently testing the new paper straws in the U.K.

USA Today