The daily business briefing: August 1, 2019

1. Fed cuts interest rates for first time in a decade

The Federal Reserve announced its first interest rate cut in a decade on Wednesday at the close of a two-day policy meeting. The quarter-point rate reduction was widely expected, because Fed Chair Jerome Powell and other central bank leaders had signaled that they would do what was necessary to keep the record-long U.S. economic expansion going. Stocks plunged, however, after Powell called the reduction a "midcycle adjustment," suggesting that more rate cuts were not guaranteed. "Let me be clear — it's not the beginning of a long series of rate cuts," Powell said in a news conference after the Fed announcement. Still, he added, "I didn't say it's just one rate cut." The Dow Jones Industrial Average and the S&P 500 posted their biggest one-day drops since May.

Reuters CNBC

2. Trump administration plans to let patients import cheaper drugs

Health and Human Services Secretary Alex Azar announced on Wednesday morning that the Trump administration will set up a system allowing Americans to legally access prescription drugs from Canada. The decision seeks to allow U.S. patients to access their prescriptions at a lower cost, while doing so with oversight from the Food and Drug Administration. States, drug wholesalers, and pharmacists would reportedly act as intermediaries for consumers. "The landscape and the opportunities for safe linkage between drug supply chains has changed," Azar said. "That is part of why, for the first time in HHS's history, we are open to importation." It's not clear when consumers will see results, as Azar said the regulatory process could potentially take "weeks and months."

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The Associated Press

3. White House calls latest China trade talks 'constructive'

Negotiators from the U.S. and China wrapped up "constructive" trade talks on Wednesday, the White House said. Neither side made statements to reporters after the meeting in Shanghai broke up 40 minutes ahead of schedule. White House spokeswoman Stephanie Grisham said in a statement that the talks on ending the tariff war between the world's two biggest economies were expected to resume in September. During the talks, President Trump accused Beijing of trying to stall a deal in hopes that a Democrat would win the White House in 2020 and prove a weaker negotiator. The comments dimmed expectations of progress and dragged down stocks.

The Associated Press

4. Stock futures rebound after plunge sparked by Fed statement

U.S. stock index futures bounced back early Thursday after plunging Wednesday when Federal Reserve Chair Jerome Powell dampened hopes of multiple interest rate cuts. Futures for the Dow Jones Industrial Average and the S&P 500 were up by about 0.2 percent, while those of the Nasdaq gained 0.3 percent. Investors on Thursday will be monitoring corporate earnings. DuPont and Verizon reported quarterly profits that beat expectations before the bell. General Motors also reports Thursday morning. Petrobras, Western Union, and Pinterest post results after trading closes. Economic data coming in will include weekly jobless claims, manufacturing numbers, June construction spending, and fresh data on light vehicle sales.

CNBC

5. LSE to buy financial information service Refinitiv for $27 billion

The London Stock Exchange agreed Thursday to buy financial information service Refinitiv for $27 billion. If regulators and LSE shareholders approve the deal, it will give the British exchange a foothold in the lucrative market data business, helping it compete with Bloomberg and other information services. "With the acquisition of Refinitiv, we will transform our position as a leading global financial markets infrastructure group," David Schwimmer, the chief executive of the London Stock Exchange Group, said in a statement. Refinitiv used to be an arm of Thomson Reuters, but currently is controlled by private equity giant Blackstone and others.

The New York Times